Equity Long-Short

Mo Aziz

Equity Bottom-Up

Melco Resorts & Entertainment / Equity Bottom-Up

<ul>
<li>Macau EBITDA grew 25% in FY2025 — fastest in our six-name coverage — while Manila, Cyprus and Sri Lanka add noise, complexity and a suspended dividend; masking Macau's good performance. </li>
<li>Management refinanced HK$21.7bn of credit facilities to 2031 and tendered near-term maturities ahead of schedule — proactive stewardship that contrasts sharply with the distressed-balance-sheet narrative the stock price implies.</li>
<li>Bullish, Fair Value US$7.60. At 4.5x FY2027E EV/EBITDA, the stock prices all the complexity and none of the Macau strength. Dividend resumption targeted year-end 2026 is the identifiable single-name catalyst.</li>
</ul>


Macau EBITDA grew 25% in FY2025 — fastest in our six-name coverage — while Manila, Cyprus and Sri Lanka add noise, complexity and a suspended dividend; masking Macau's good performance. 
Management refinanced HK$21.7bn of credit facilities to 2031 and tendered near-term maturities ahead of schedule — proactive stewardship that contrasts sharply with the distressed-balance-sheet narrative the stock price implies.
Bullish, Fair Value US$7.60. At 4.5x FY2027E EV/EBITDA, the stock prices all the complexity and none of the Macau strength. Dividend resumption targeted year-end 2026 is the identifiable single-name catalyst.


Melco Resorts & Entertainment (MLCO US): An Excellent Macau Business Hiding Behind a Complicated Map

Thematic (Sector/Industry)

<ul>
<li>FY2025 GGR reached a record MOP247.4bn (+9.1% YoY), yet Macau casinos trade at just ~6.8x FY2027E EV/EBITDA, well below pre-COVID levels. The recovery is real; the re-rating has not happened.</li>
<li>The cheapest share price is not the cheapest company. SJM is the sector's most expensive stock at 9.1x FY2027E EV/EBITDA, while MGM is among the cheapest at 4.6x.</li>
<li>Bullish on MGM China (top pick), Melco, Sands China and Galaxy. Neutral on Wynn Macau and SJM, where balance-sheet constraints limit upside potential.</li>
</ul>


FY2025 GGR reached a record MOP247.4bn (+9.1% YoY), yet Macau casinos trade at just ~6.8x FY2027E EV/EBITDA, well below pre-COVID levels. The recovery is real; the re-rating has not happened.
The cheapest share price is not the cheapest company. SJM is the sector's most expensive stock at 9.1x FY2027E EV/EBITDA, while MGM is among the cheapest at 4.6x.
Bullish on MGM China (top pick), Melco, Sands China and Galaxy. Neutral on Wynn Macau and SJM, where balance-sheet constraints limit upside potential.


Macau Gaming Handbook 2026: One Market, Six Concessionaires, One Yardstick

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Giant Network Group Co Ltd / Technical Analysis

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $119-$121.</li>
<li>We remain overweight/continue to have a major focus on China (Shanghai Composite). It continues to offer the most attractive opportunities, with a significant number of today's recommendations coming from China.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $119-$121.
We remain overweight/continue to have a major focus on China (Shanghai Composite). It continues to offer the most attractive opportunities, with a significant number of today's recommendations coming from China.


Sticking With China; Bullish Outlook Intact. Buys in Consumer Discretionary, Materials, and Tech

<ul>
<li>Outlook remains bullish following the SPX multi-month base breakout above 5670-5783, alongside constructive market dynamics. The market is quite clearly telling us that the path of least resistance is higher.</li>
<li>We would treat any pre-election pullback (if it comes) as a buying opportunity, and we expect to see support on the SPX at 5760 and 5655-5670.</li>
<li>We believe there will be a strong end-of-year rally that will extend into the early part of 2025 due to bullish end-of-year seasonal tendencies during up years (SPX +22.1% YTD).</li>
</ul>


Outlook remains bullish following the SPX multi-month base breakout above 5670-5783, alongside constructive market dynamics. The market is quite clearly telling us that the path of least resistance is higher.
We would treat any pre-election pullback (if it comes) as a buying opportunity, and we expect to see support on the SPX at 5760 and 5655-5670.
We believe there will be a strong end-of-year rally that will extend into the early part of 2025 due to bullish end-of-year seasonal tendencies during up years (SPX +22.1% YTD).


Downgrading Health Care $XLV to Underweight; Bullish Outlook Intact $SPX; Bitcoin Breaking Out

<ul>
<li>We still recommend a tactical overweight to defensives (Staples, Utilities, Healthcare, and gold miners) as the SPX tests our 4165-4200 resistance range, and also resistance from the prior 1.5-month uptrend.</li>
<li>As we await Wednesdays FOMC announcement, the DJIA and Nasdaq Composite are testing 1-year resistances at 34,280 and 12,300, the DXY appears to be inflecting higher, and breadth remains weak.</li>
<li>While we still see a reach to 4300-4325 as possible, we believe playing for more upside is akin to picking up pennies in front of a steamroller.</li>
</ul>


We still recommend a tactical overweight to defensives (Staples, Utilities, Healthcare, and gold miners) as the SPX tests our 4165-4200 resistance range, and also resistance from the prior 1.5-month uptrend.
As we await Wednesdays FOMC announcement, the DJIA and Nasdaq Composite are testing 1-year resistances at 34,280 and 12,300, the DXY appears to be inflecting higher, and breadth remains weak.
While we still see a reach to 4300-4325 as possible, we believe playing for more upside is akin to picking up pennies in front of a steamroller.


S&P 500 Testing 4165-4200, DJIA Testing 34,280, Nasdaq Composite Testing 12,300; Stay Defensive

Hong Kong

Melco Resorts & Entertainment Limited is a developer, owner, and operator of integrated resorts with entertainment and casino gaming facilities across Asia and Europe. The company's portfolio includes properties such as City of Dreams Macau, Altira Macau, Studio City Macau, City of Dreams Manila, and City of Dreams Mediterranean, as well as the Mocha Clubs slot machine brand. Incorporated in 2004, the company is headquartered in Hong Kong.

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Melco Resorts & Entertainment (MLCO US)