Citibank: Lowering the target price of Goldworld Holdings (03918) to HK$4.1, third quarter gaming revenue falls short of expectations

The Zhitong Finance App learned that Citi released a research report saying that Jinjie Holdings (03918) recently announced key operating indicators for the third quarter of this year. Total gaming revenue fell 43% year on year to US$114.2 million, about 15% lower than the bank's expectations. The bank believes that security concerns such as the Thai-Cambodia border conflict and telecom fraud, as well as external factors such as a reduction in direct flights to Cambodia, are still suppressing demand for NagaWorld gaming.

The bank pointed out that it is not surprising that the VIP room continues to weaken, but midfield betting volume fell 18% from quarter to quarter, prompting the bank to expect a recovery in real demand until the beginning of fiscal year 2027. The sharp year-on-year decline in gaming bets may also depress the year-on-year expansion of EBITDA profit margins in the second half of the year (EBITDA profit margin increased 3.8 percentage points year-on-year in the first half of the year).

Considering the indicators already announced for the third quarter, Citi lowered the profit forecast for the 2026-28 financial year by 8% to 12%, and the target price was lowered from HK$5 to HK$4.1, maintaining a “buy” rating. The current share price is equivalent to about 3.2 times the EV/EBITDA forecast for the 2027 fiscal year, close to two standard deviations below the historical average, and the valuation is not high.