Content Writer: Janice Chew • Wednesday, 25/11/2025 - 19:45:55 - PM
The Macau-based gaming and hospitality operator Galaxy Entertainment Group (Stock code 00027.HK) is garnering attention after broker CLSA issued a research note suggesting the company may raise its dividend payout ratio significantly over the next few years.
According to the report, Galaxy’s dividend payout ratio rose from around 32 % in 2023 to roughly 58 % in the first half of 2025, reflecting stronger cash flow and a move towards returning more capital to shareholders. CLSA posits that should the company distribute its recurring free cash flow fully, the payout ratio could reach at least 69 % during the 2025-27 period.
Behind this outlook lie several supportive financial metrics. Galaxy reported Q3 2025 adjusted EBITDA of HKD 3.3 billion—up 14 % year-on-year and modestly above expectations. Meanwhile, as of Q2/Q3 2025 the firm held net cash equivalent to about 17 % of its market value, giving it financial flexibility to ramp up shareholder returns.
Nonetheless, while the trend is positive, investors should weigh key considerations. Galaxy still faces an industry-wide slowdown in Macau gaming growth and has major capital expenditure (notably its Phase 4 development in Cotai) that may require reinvestment rather than full payout distribution. Also, external commentary via JP Morgan Securities (Asia Pacific) noted that while the roughly 60 % payout ratio is robust, it “is not the ceiling,” particularly as capex needs ease in 2027/28.
In sum, Galaxy’s improved cash‐position and management’s intention to enhance capital return are very encouraging. If the company executes as CLSA expects, the dividend payout ratio rising to ~69 % could be a meaningful positive development for shareholders.