Macau gaming operator Galaxy Entertainment Group (GEG), despite being one of the few debt-free casino companies in Macau, has significant potential to enhance shareholder returns by strategically incorporating low-cost debt into its capital structure, according to Vitaly Umansky, senior analyst at Seaport Research Partners.
This could substantially increase equity returns, especially as operating cash flow improves in the coming years. The company’s current debt-free status provides ample capacity to take on debt while maintaining a solid investment-grade credit rating, which could further boost capital returns to shareholders.
Leveraging debt could also lead to a notable increase in dividends, delivering more value to investors. While Galaxy has already demonstrated its commitment to returning capital, with a HK$0.50 ($0.064) dividend in October and an additional special HK$0.30 ($0.039) dividend earlier this year, the real game-changer may lie in expanding these returns further through debt integration. The potential for rising dividends over the next few years, as the company’s cash flow strengthens, is substantial.
Leadership transition
The passing of Lui Che Woo, the founder of Galaxy Entertainment, at 95, has raised questions about the company’s future. However, the company has reassured investors that its operations and strategy will not be disrupted. In fact, Lui Che Woo’s son, Francis Lui, who has effectively been managing the company as de facto CEO, is set to officially assume the role of Chairman.
This leadership transition is expected to be seamless, with no anticipated changes in the company’s strategy or day-to-day operations.
‘Francis Lui has effectively been the CEO of the company (in form, if not in title),’ stated Umansky, emphasizing that the continuity of leadership will ensure the company’s steady course.
Lui’s leadership has been central to Galaxy’s evolution into a key player in the Asian casino industry. With his transition to Chairman, the company is expected to maintain its solid growth trajectory.
Strong position in Macau
Galaxy Entertainment remains one of the dominant players in Macau, holding the position of the second-largest casino operator in the region.
Analyst Umansky notes that the company has made significant strides in adapting to changing market conditions, particularly with the decline of the VIP sector, which had previously been a major revenue driver.
In response to this shift, Galaxy has successfully pivoted its focus to the premium mass and mass market segments, where it continues to maintain a competitive edge. Its large-scale entertainment offerings, service excellence, and diverse product portfolio help differentiate Galaxy from other operators in the region. A key element of this success has been the company’s robust event programming, including major music performances, which have significantly boosted business during peak periods.
Looking ahead, Galaxy has well-positioned plans for further expansion. The Capella luxury resort at Galaxy Macau, slated to open in mid-2025, will enhance the company’s premium positioning in the market. With 94 villas and suites, alongside extensive amenities and gaming offerings, Capella is expected to drive market share gains in late 2025 and into 2026.
This will be followed by the opening of Galaxy Macau Phase 4 in 2027, which will further support the company’s expansion and share growth in the region.
