Lyon: Lowering the target price of Goldworld Holdings (03918) to HK$4.8 and reducing earnings is still deeply valuable

According to the Zhitong Finance App, Lyon released a research report saying that after releasing the operating data for the third quarter of this year, the bank lowered its forecast for 2026 to 28. As headwinds such as code purchases and transcoding volume seem to continue, the net profit forecast for this year, next year and next year was lowered by 16%, 30% and 30%, respectively, and the target price was lowered from HK$6.7 to HK$4.8. Considering the deep value, the bank maintained a “outperforming the market” rating.

The bank now expects that next year's midfield table and electronic gaming machine purchases will remain flat year over year, while transcoding volume will plummet by 34% year over year. It also assumes that the average daily transcoding volume and code purchases for next year are similar to those predicted for the fourth quarter of this year, with only a moderate recovery in subsequent years. Inflation in Cambodia has been easing since May this year, which may help the midmarket buy rate to pick up in the future. A debt-free balance sheet helps to withstand challenges. The high-profit midfield business generally maintains resilience and cash creativity. The NagaWorld 3 plan, finalized by the second half of next year, can be a catalyst, and there is room for an increase in dividend ratios thereafter.

According to the bank's adjusted forecast, the current price of Jinjie Holdings is equivalent to 2.8 times next year's EV/EBITDA, a dividend rate of 4.9%, and an expected net cash of 283 million US dollars next year. The bank rolled the valuation benchmark to net asset value at the end of next year and lowered the target EV/EBITDA ratio to 5.8 times (0.5 standard deviations lower than the long-term average) due to poor growth prospects.