HONG KONG: Yesterday, Macao casino operator Galaxy Entertainment Group Ltd posted its greatest HSI gains of the past 10 days, after saying its pretax profits for the second-quarter more than doubled from a year ago, and bucking the fiercely competitive industry's downward trend.

Outperforming the 1.68 percent jump in the benchmark Hang Seng Index, shares of Galaxy Entertainment vaulted 8.76 percent or HK$0.19 in yesterday's trade to close at a two-month high of HK$2.36, second only to the HK$2.40 close of the June 1 rally.

Rival SJM Holdings Limited, held by casino tycoon Stanley Ho, also finished up, posting a gain of 3.62 percent or HK$0.11 at HK$3.15.

Credit Suisse yesterday raised the target price for Galaxy Entertainment to HK$1.85 from HK$1.45, but maintained its "neutral" rating. It said the operating figures for the second half this year are largely in line. Besides a HK$830 million net cash held by the group, the private bank cautioned that the amount is before construction cost-related payables and the outstanding capex. Moreover, Credit Suisse still believes that Galaxy may need to raise funds in the near term.

The group reported a 144 percent surge in second-quarter earnings before interest, tax, depreciation and amortization (EBITDA), amounting to HK$ 264 million, compared to the same period in the previous year, representing a 13 percent gain over the first quarter.

Its flagship StarWorld Casino's EBITDA climbed for 4 quarters in a row to HK$214 million, up 91 percent year-on-year.

StarWorld's total revenue in gambling was HK$1.95 billion, an increase of 23 percent from a year earlier and up 1.24 percent from last quarter. Gambling revenue was HK$3.88 billion in the first half of 2009, up 15.97 percent from the same period last year.

The group's revenue growth outpaced Macao's total gaming revenue and bucked the trend by increasing as the casino industry's revenue tumbled 12.4 percent year-on-year and declined 2.27 percent from the previous quarter.

The group, part-owned by Permira Advisers LLP, said it maintains steady market supply to maintain its market share, despite growing competition in the gambling industry and a 16 percent slump in year-on-year tourism in Macao.

(HK Edition 08/01/2009 page2)