Bank of America Securities: Downgrading Gold World Holdings (03918) to “inferior to the market”, the improved visibility of gaming revenue is limited

The Zhitong Finance App learned that Bank of America Securities released a research report stating that it downgraded the rating of Gold World Holdings (03918) from “neutral” to “lower than the market” and lowered the target price by 30% to HK$3.1; the bank believes that the improvement in its gaming revenue is limited. The growth in gaming revenue has slowed from 2.1% in the first quarter to a 20% drop in the second quarter and a 43% decline in the third quarter.

The bank believes that the slowdown in revenue is mainly due to two factors. First, Chinese customer growth is weak. The bank estimates that about 50% of gambling customers in the gold industry are Chinese citizens, and gaming consumption may remain weak in the short term. Second, the number of inbound tourists decreased. The number of visitors entering Cambodia fell 44% year on year in the first eight months of this year. The bank believes that continuing security concerns surrounding Cambodia may limit the pace of recovery of inbound tourists.

Based on the decline in gaming revenue in the third quarter of the Golden World, the bank estimated EBITDA for the third quarter to be US$58 million, lower than the forecast for the first quarter and the second quarter of US$115 million and US$80 million. Based on disappointing gaming revenue, the 2026 and 2027 EBITDA forecasts were lowered by 27% and 38%, respectively, to $312 million and US$269 million.