Maybank Securities has cut its revenue forecasts for Solaire operator Bloomberry Resorts Corp by 12% for both 2024 and for 2025, citing general softness in gross gaming revenues across Entertainment City’s integrated resorts.
Considered the home of the Philippines gaming industry, Entertainment City is home to four IRs in Solaire Resort Entertainment City, Okada Manila, City of Dreams Manila and Newport World Resorts – the latter being located alongside Manila’s Ninoy Aquino International Airport. A fifth IR known as LET X – operated by Hong Kong’s LET Group and part of the Westside City development – is due to open early next year.
In a Monday note, Maybank Securities analyst Raffy Mendoza pointed out that although the Philippines gaming industry enjoyed a 25% year-on-year growth in GGR in the first six months of 2024, this was mainly driven by the e-Games sector with GGR from the Entertainment City IRs actually down 13% in 1H24.
As such, he has cut his forecast for Bloomberry by 12% for 2024 and 12% for 2025, mainly due to this Entertainment City weakness.
Bloomberry also operates Solaire Resort North, opened in May.
“We attribute this [weakness at Entertainment City] to fewer fly-in Chinese VIP players,” Mendoza wrote. “We see short-term weakness in Solaire Resort Entertainment City but view Bloomberry’s focus on its mass segment through Solaire Resort North boding well by next year.”
Maybank Securities has also reduced its target price on Bloomberry shares by 25% to Php10.50 but said negative sentiment around the company’s shares are overdone.
“Since reaching its peak of Php12.00 in March 2024, Bloomberry’s share price has fallen by as much as 40% to Php7.16,” he said. “Overall weakness among licensed casinos in the Philippines has weighed on the stock price. However, we view this as a buying opportunity as Bloomberry is trading at 6.2x FY25E EV/EBITDA, below its historical average of 13.5x.”
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