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Equity Bottom-Up

<ul>
  <li>
<a href="https://smartkarma.com/entities/sjm-holdings-limited">SJM Holdings</a> is navigating a significant strategic realignment, marked by the closure of its satellite casinos, which has led to a near-term decline in market share and revenue. The company is now focusing on its self-promoted flagship properties, particularly the ramp-up of the Grand Lisboa Palace in Cotai.</li>
  <li>The company faces considerable financial pressure due to the highest leverage in the Macau gaming sector. Deleveraging through operating cash flow and demonstrating sustained profitability at its core assets are critical for its future outlook and a potential reinstatement of dividends.</li>
  <li>While the legacy Lisboa brand provides strong recognition, SJM faces intense competition from more modern resorts on the Cotai Strip. The company's future success hinges on its ability to enhance its non-gaming offerings and capture a larger share of the valuable mass and premium-mass market segments.</li>
</ul><p><em>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.</em></p>


  
SJM Holdings is navigating a significant strategic realignment, marked by the closure of its satellite casinos, which has led to a near-term decline in market share and revenue. The company is now focusing on its self-promoted flagship properties, particularly the ramp-up of the Grand Lisboa Palace in Cotai.
  The company faces considerable financial pressure due to the highest leverage in the Macau gaming sector. Deleveraging through operating cash flow and demonstrating sustained profitability at its core assets are critical for its future outlook and a potential reinstatement of dividends.
  While the legacy Lisboa brand provides strong recognition, SJM faces intense competition from more modern resorts on the Cotai Strip. The company's future success hinges on its ability to enhance its non-gaming offerings and capture a larger share of the valuable mass and premium-mass market segments.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Equity Long-Short

Mo Aziz

<ul>
<li>HK$1.52 buys HK$25.85bn of net debt alongside HK$11.1bn of equity. At ~8.1x FY2025 EBITDA — the highest leverage in our coverage — something to be very aware of.</li>
<li>Q1 2026 EBITDA margin recovered to 15.5% from FY2025's 11.4% as Grand Lisboa Palace gained traction — the first genuine operating signal. One quarter. Not yet a trend. </li>
<li>Neutral, Fair Value HK$1.45. At 9.1x FY2027E EV/EBITDA, SJM is the most expensive stock in our Macau coverage on a leverage-adjusted basis.</li>
</ul>


HK$1.52 buys HK$25.85bn of net debt alongside HK$11.1bn of equity. At ~8.1x FY2025 EBITDA — the highest leverage in our coverage — something to be very aware of.
Q1 2026 EBITDA margin recovered to 15.5% from FY2025's 11.4% as Grand Lisboa Palace gained traction — the first genuine operating signal. One quarter. Not yet a trend. 
Neutral, Fair Value HK$1.45. At 9.1x FY2027E EV/EBITDA, SJM is the most expensive stock in our Macau coverage on a leverage-adjusted basis.


SJM Holdings (880 HK): The Cheapest Price Is Not the Most Valuable Company

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>SJM Holdings' Q4 and FY 2025 results were weak, as the company's market share declined and profitability worsened.</li>
<li>This was owing to a combination of: [1] disruption arising from the transition of gaming tables from the satellite casinos to its self-promoted properties; [2] intensified competition from peers amid the disruption; [3] lower win rates; and [4] one-off costs for smart tables, events, as well as expenses associated with the government's concession requirements.</li>
<li>Looking ahead, SJM’s market share should stabilise and gradually recover from the low level in Q4/25, supported by enhanced marketing efforts for its self-promoted casinos.</li>
</ul>


SJM Holdings' Q4 and FY 2025 results were weak, as the company's market share declined and profitability worsened.
This was owing to a combination of: [1] disruption arising from the transition of gaming tables from the satellite casinos to its self-promoted properties; [2] intensified competition from peers amid the disruption; [3] lower win rates; and [4] one-off costs for smart tables, events, as well as expenses associated with the government's concession requirements.
Looking ahead, SJM’s market share should stabilise and gradually recover from the low level in Q4/25, supported by enhanced marketing efforts for its self-promoted casinos.


SJM Holdings - Earnings Flash - FY 2025 Results - Lucror Analytics

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: SJM Holdings, Nissan Motor</li>
<li>UST yields rose 1-2 bps across the curve yesterday led by the front-end, following better than expected December Challenger job cuts and weekly jobless claims data. The yield on the 2Y and 10Y UST grew 2 bps each to 3.49% and 4.17%, respectively. Equities ended mixed, as investors rotated out of tech stocks into other segments including defence, energy producers and small caps. The S&amp;P 500 was flat at 6,921, while the Nasdaq fell 0.4% to 23,480.</li>
<li>The Indian government has forecast that the country’s real GDP will grow 7.4% in FY 2025-26 (ending March), according to advance estimates by the Ministry of Statistics and Programme Implementation. This is slightly above the 7.3% projected by the Reserve Bank of India, and represents an acceleration from 6.5% in FY 2024-25. Nominal GDP is estimated to expand 8.0% in FY 2025-26.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: SJM Holdings, Nissan Motor
UST yields rose 1-2 bps across the curve yesterday led by the front-end, following better than expected December Challenger job cuts and weekly jobless claims data. The yield on the 2Y and 10Y UST grew 2 bps each to 3.49% and 4.17%, respectively. Equities ended mixed, as investors rotated out of tech stocks into other segments including defence, energy producers and small caps. The S&amp;P 500 was flat at 6,921, while the Nasdaq fell 0.4% to 23,480.
The Indian government has forecast that the country’s real GDP will grow 7.4% in FY 2025-26 (ending March), according to advance estimates by the Ministry of Statistics and Programme Implementation. This is slightly above the 7.3% projected by the Reserve Bank of India, and represents an acceleration from 6.5% in FY 2024-25. Nominal GDP is estimated to expand 8.0% in FY 2025-26.


<ul>
<li>UST yields fell meaningfully yesterday, with the curve bull steepening as market expectations for Fed rate cuts climbed.</li>
<li>This followed an uptick in the September unemployment rate, despite payrolls data coming in above estimates.</li>
<li>The yield on the 2Y UST decreased 6 bps to 3.53%, while that on the 10Y UST declined 5 bps to 4.09%. </li>
</ul>


UST yields fell meaningfully yesterday, with the curve bull steepening as market expectations for Fed rate cuts climbed.
This followed an uptick in the September unemployment rate, despite payrolls data coming in above estimates.
The yield on the 2Y UST decreased 6 bps to 3.53%, while that on the 10Y UST declined 5 bps to 4.09%. 


Hong Kong

SJM Holdings is a leading owner, operator, and developer of casinos and integrated entertainment resorts in Macau. The company's operations encompass casino gaming, hotels, dining, shopping, and wellness facilities. SJM Holdings was incorporated in Hong Kong in 2006 and is headquartered in Central, Hong Kong.

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SJM Holdings (880 HK)

Primer: SJM Holdings (880 HK) - Aug 2026

SJM Holdings is navigating a significant strategic realignment, marked by the closure of its satellite casinos, which has led to a near-term...

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