Melco Resorts & Entertainment Ltd. (MLCO) 2Q26 results below on lower VIP win rate. Slow debt reduction. Allocating capital ...

Equity Research 16 August 2026 | 9:06PM HKT

Melco Resorts & Entertainment Ltd. (MLCO) 2Q26 results below on lower VIP win rate. Slow debt reduction. Allocating capital for share buybacks and delaying dividend resumption to FY27

MLCO 12m Price Target: $8.00 Price: $5.60 Upside: 42.9% BUY Simon Cheung, CFA | Goldman Sachs (Asia) L.L.C.

Alpha Wang | Goldman Sachs (Asia) L.L.C.

MLCO’s 2Q26 property EBITDA came in below market Leah Pan | expectation at -20% qoq to US$304mn due to lower VIP win rate Goldman Sachs (Asia) L.L.C.

(2.7% vs. 3.5% in 1Q26 and 3% theoretical). Adjusted for win rate factor, it would have been inline at -12% qoq to US$312mn Key Data _____________________________________ Market cap: $3.1bn (vs. GSE US$315mn, Bloomberg consensus estimates of Enterprise value: $9.0bn US$311-327mn) driven by temporary setbacks in Macau (-18% qoq 3m ADTV: $13.4mn Macau to US$258mn) and CoD Manila (-6% qoq to US$31mn) amid gaming Asia Leisure M&A Rank: 3 spending diversion from the World Cup (see our preview report on Leases incl. in net debt & EV?: No Jul 14). These were partly offset by GGR recovery at CoD GS Forecast __________________________________ Mediterranean in Cyprus (US$20mn vs. US$21mn/US$9mn in 12/25 12/26E 12/27E 12/28E Revenue ($ mn) New 5,163.3 5,300.4 5,580.2 5,905.6 4Q25/1Q26) despite operational disruptions arising from the Revenue ($ mn) Old 5,163.3 5,281.9 5,572.5 5,897.0

Middle East conflicts and ramp-up of CoD Sri Lanka since its EBITDA ($ mn) EPS ($) New 1,219.7 0.47 1,252.4 0.48 1,339.8 0.75 1,427.6 1.02 opening in 3Q25 (US$4mn vs. US$1mn in 1Q26). In Macau, similar to EPS ($) Old P/E (X) the trend reported by other casino operators (Sands, MGM, Wynn, P/B (X) NM NM NM NM Galaxy), MLCO saw sharper volume decline in VIP segment (-19% Dividend yield (%) 0.0 0.0 6.7 9.1 CROCI (%) qoq) vs. mass/slot GGR (-4%/-9% qoq) as higher rollers tended to divert more of their spending to sports betting during the World 3/26 6/26 9/26E 12/26E EPS ($) Cup period. Non-gaming revenue (-7% qoq) was affected by retail GS Factor Profile ______________________________ revamp at CoD lasting till mid-FY27 and lower hotel ADR (CoD -2%, Growth Studio City -6%). Overall, its net revenue in Macau fell -11% qoq. Even though daily opex was maintained at US$3.4mn and Financial Returns

promotional allowance was reduced by -5% qoq, negative operating Multiple

de-leverage resulted in -3.2pts qoq EBITDA margin decline to 24.2% Integrated

on a hold-adjusted basis. Percentile 20th 40th 60th 80th 100th

While both of its key properties in Macau posted sequential EBITDA MLCO relative to Asia ex. Japan Coverage decline in 2Q26, Studio City held up relatively better with MLCO relative to Asia Leisure

hold-adjusted EBITDA -14% qoq to US$96mn (vs. CoD -19% qoq to Source: Company data, Goldman Sachs Research estimates. US$157mn) reflecting its family-oriented and mass-market focused See disclosures for details. without any VIP exposure and hence less affected by the World Cup.

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Goldman Sachs Melco Resorts & Entertainment Ltd. (MLCO)

Melco Resorts & Entertainment Ltd. Income Statement ($ mn) ___________________________________ BUY (MLCO) Total revenue 12/25 5,163.3 12/26E 5,300.4 12/27E 5,580.2 12/28E 5,905.6 Rating since Feb 5, 2018 Cost of goods sold (3,732.7) (3,896.8) (4,099.6) (4,334.3) SG&A ( ) Ratios & Valuation __________________________________________ R&D -- -- -- -- 12/25 12/26E 12/27E 12/28E Other operating inc./(exp.) ( ) P/E (X) EBITDA 1,316.8 1,291.1 1,378.5 1,466.3 P/B (X) NM NM NM NM Depreciation & amortization ( ) FCF yield (%) EBIT EV/EBITDAR (X) 6.8 6.2 5.5 4.9 Net interest inc./(exp.) ( ) EV/EBITDA (excl. leases) (X)…