SJM Resorts appears to be taking some market share in the base mass segment as rival concessionaires focus their energies on the lucrative premium mass segment, according to an overnight note from Seaport Research Partners.
However, the slow ramp of Cotai resort Grand Lisboa Palace and overhang from satellite casino uncertainty is negatively impacting more meaningful market share gain in the long-term.
The update follows SJM’s 1Q25 earnings call on Tuesday, with the company having reported a net profit of HK$31 million for the quarter, down from HK$64 million in 4Q24. Adjusted EBITDA also came in below expectations at HK$958 million despite SJM showing considerable improvement compared with the same period in 2024.
A key concern for SJM is the incredibly slow ramp of GLP, which recorded Macau-wide market share of 2.8% in Q1 – up from 2.7% in 4Q24 and 2.6% in 3Q24.
“We expect the ramp up at GLP to remain slow and the long-term ROI on the GLP investment is likely to be suboptimal weight on valuation,” said Seaport’s senior analyst Vitaly Umansky.
“SJM seems to be taking some market share in the lower end of base mass (especially the day tripper market) as other operators have been overly focused on premium play. In the short term this may benefit SJM, but we see other operators looking to expand base mass positioning in the next few quarters.”
SJM’s overall market share in Q1 was 13.5%, down slightly compared to recent quarters, of which 8.4% was from its self-operated casinos – down from 8.6% in Q4 and 8.8% in Q3.
“We do not expect SJM to gain market share on a consolidated basis as longer term satellite casino share losses will be marginally offset by self-owned casino share,” Umansky explained.
SJM will, the analyst added, focus its short-term energies on cost controls – opex rose 5% in 1Q25 – and improving its exposure to the premium mass segment.
However, there remains little clarity on the future of SJM’s nine satellite casinos with the expiry of the three-year grace period for operations to continue under traditional revenue share arrangements expiring on 31 December 2025.
“Due to the current gaming law, the future of satellites beyond 2025 remains uncertain and there has been no clarity from either the government or from
SJM on what the outcome may be,” Umansky wrote. “Some or all of the satellites may need to shut down, with tables and staff shifted back to SJM.
While some tables may benefit its current operations, the costs may be high and SJM may look to divest of tables.
“The future of this business remains all very uncertain at this stage.”
