Macau gaming operator SJM Holdings is expected to lag the broader recovery of Macau’s casino sector, according to analysts at CBRE.
The brokerage indicated a meaningful turnaround is unlikely before the second half of 2026 as the company continues to restructure operations following the closure of its satellite casinos.
Analysts John DeCree and Max Marsh said the company remains in a transition period after shutting down its satellite casino network and shifting resources to its self-promoted properties. The process involves repositioning its assets to better target mass and premium-mass customers, reorganizing its marketing team, modernizing promotional strategies, and improving cost efficiencies as tables, slot machines and employees are redeployed from former satellite operations.
Additional disruptions are also expected in the near term, including room renovations at Hotel Lisboa and adjustments tied to concession obligations.
‘SJM has trailed the marketwide GGR growth in Macau throughout its transition year in FY25, and we expect the company will need at least the front half of FY26 to round the corner,’ the analysts noted.
‘We now look to 2H26 as a potential turning point and expect a more gradual recovery thereafter given the elevated competitive and promotional environment,’ the report indicates.
CBRE has downgraded SJM’s shares from ‘Buy’ to ‘Hold,’ noting that the operator’s recovery trajectory is likely to remain slower than that of its Macau peers.
Disappointing fourth quarter
The brokerage described the fourth quarter of 2025 as the company’s most challenging period of the year.
SJM reported EBITDA of HK$670 million ($85.7 million) for the quarter, missing consensus and declining 32.5 percent year-on-year and 24 percent sequentially.
‘The quarter was impacted by a number of headwinds’, CBRE said, citing ‘its most concentrated quarter of satellite casino closures, elevated operating expenses related to transitioning satellites and concession obligations, an unfavorable VIP hold comparison, and a highly competitive environment that drove up reinvestment rates.’
Although the market had largely anticipated the impact of satellite casino closures, analysts said underlying operational trends excluding satellites were still disappointing.
Total gross gaming revenue (GGR) excluding satellites rose only 2.4 percent year-on-year in the fourth quarter, according to CBRE. A 19.8 percent decline in VIP GGR—partly due to a difficult VIP hold comparison—offset growth of 6.3 percent in the mass segment.
At the property level, Grand Lisboa Palace (GLP) posted GGR growth of 4.1 percent in the fourth quarter and 15.8 percent for the full year, while GGR at the older Grand Lisboa property declined 5.3 percent in the quarter and 2.9 percent for the year.
Despite the revenue trends, EBITDA at both properties declined during the quarter due to higher operating costs related to concession obligations, excess labor resulting from satellite closures, and the ongoing reorganization of the company’s marketing operations.
For the full 2025 year, SJM posted a loss attributable to owners of HK$429 million ($54.9 million), reversing a small profit recorded a year earlier.
