MGM China on Thursday declared a final dividend of HK$0.353 per share for FY25, representing a total payout of HK$1.34 billion (US$171 million) and comprising 26.4% of group profit for the year after printing all-time record Adjusted EBITDA.
However, J.P. Morgan said in a follow-up note that the dividend payout was lower than anticipated after earnings per share came in “unexpectedly soft” on higher costs and increased D&A (depreciation and amortization).
Releasing its final results for 2025, MGM China reported a 10.8% year-on-year increase in HK$34.8 billion (US$4.44 billion) in operating revenues including an 11.7% rise in casino revenues to HK$30.5 billion (US$3.89 billion). On the gaming floor, main floor gross table win grew 10.2% to HK$31.5 billion (US$4.02 billion), VIP gross table win by 19.5% to HK$4.84 billion (US$618 million) and slot machine gross win by 3.3% to HK$2.30 billion (US$294 million).
Adjusted EBITDA was up 10.4% to a record HK$10.0 million (US$1.28 billion) while profit attributable to owners of the company was up 10.2% to HK$5.07 billion (US$647 million).
In announcing its final dividend of HK$0.353 per share – increased from the HK$0.313 per share declared in August – MGM said it had considered the group’s latest general financial position, existing cash flow, capital requirements going forward and other factors that the Board considered relevant. As such it had determined that the group has sufficient resources after payment of the final dividend to finance its operations, development of its business and investment commitments made by MGM Grand Paradise S.A. to the Macao SAR Government under its Macau gaming concession.
In a note, J.P. Morgan said the final dividend, when combined with the interim dividend declared last year, implied a 50% payout but observed that it still missed consensus by around 10% because the bar had been “set for a positive surprise”.
“While management had never hinted at changing the [50% payout] policy, the disappointment is real,” said analysts DS Kim, Selina Li and Lindsey Qian, pointing to the 70% payout ratio adopted by some other concessionaires.
They added that earnings per share could also slip by around 11% in 2026 due to the recent annual license fee hike agreed with parent company MGM Resorts.
With higher costs tied to the recent opening of the Alpha Suites and Alpha Club at MGM Macau on the peninsula, alongside finance and non-operating costs, appearing to have directly eaten into the dividend per share under MGM’s fixed payout policy, J.P. Morgan has downgraded MGM China to neutral on certain headwinds facing the stock.
“Make no mistake – we like this company,” the analysts wrote. “Execution since the reopening has been great, with its 4Q25 EBITDA at +177% of pre-COVID levels, nearly doubling the industry’s ~90%.
“But liking the company and liking the stock are two different things right now. The license fee hike (three months ago), today’s dividend disappointment and a likely mediocre 1Q26E result in May (off a high 4Q25 bar and vs some peers) stack up to a tough near-term setup for the stock.
“We struggle to see the stock outperforming from here and are tactically downgrading to Neutral, even with valuation still looking cheap.”
