Lyon: Raise NAGACORP (03918) target price to 7.5 Hong Kong dollars, expected strong cash flow generation this year.

Lyon released a research report stating that NAGACORP (03918) is expected to have steady performance in 2025, and strong cash flow is expected to be generated in 2026, benefiting from the continuous rebound in VIP gambling volume and this year's capital expenditure being 26% lower than the bank's original forecast. The implementation of the visa-free arrangement for Chinese citizens entering Cambodia from mid-June is expected to boost third-quarter revenue growth. The bank's long-term investment view remains unchanged and profit forecasts for 2026 and 2027 are raised by 1% to 2%, assuming the future dividend payout ratio remains unchanged at 30%. It is expected that net cash will reach 726 million US dollars in 2028, equivalent to 31% of the market value. The bank maintains an "outperform the market" rating, with the target price raised from HK$6.8 to HK$7.5.