Melco International Development Limited (0200.HK): BCG Matrix [Dec-2025 Updated]

Melco's portfolio reads like a strategic playbook in motion: high-investment Stars-City of Dreams Macau, Studio City's Phase 2 and City of Dreams Mediterranean-are fueling rapid top-line growth and justifying continued capex, while reliable Cash Cows in Mocha Clubs and City of Dreams Manila are generating the liquidity to service debt and bankroll expansion; at the same time, capital is being judiciously deployed to Question Marks such as Sri Lanka and non-gaming entertainment to test new markets and revenue models, while underperforming Dogs like Altira and satellite casinos are being de-emphasized or wound down-an allocation mix that will determine whether Melco converts growth bets into sustained shareholder value.

Melco International Development Limited (0200.HK) - BCG Matrix Analysis: Stars

Stars

City of Dreams Macau leads premium growth. City of Dreams Macau serves as the group's primary growth engine, capturing a 15.7% market share in Macau as of early 2025. In Q3 2025 the flagship property generated US$672.6 million in operating revenue, representing a 19% year-over-year increase. Adjusted EBITDA rose to US$206.9 million, driven by a 57% surge in VIP gross gaming revenue and a 9% rise in mass market play. The resort sustains elevated capital expenditure to support the re-launch of The House of Dancing Water, which now attracts approximately 4,000 additional daily visitors. This segment benefits from a projected Macau market growth rate of 7% in 2025, confirming its status as a high-growth, high-share leader.

Studio City Phase 2 expansion drives momentum. Studio City transitioned into a high-growth Star following full ramp-up of its Phase 2 expansion and the opening of the Epic Tower. Q3 2025 operating revenues reached US$182.5 million. Mass market gaming revenue increased 11% to US$312 million (period-to-date metric), and Adjusted EBITDA improved to US$78.1 million, a 14.5% year-over-year uplift. Non-gaming revenue remained material at US$105.2 million, supported by the new W Macau hotel and a residency concert series. The property records a 33.1% hold percentage in mass table games, capturing premium mass demand on the Cotai Strip.

City of Dreams Mediterranean dominates the European market. City of Dreams Mediterranean in Cyprus recorded its best quarterly performance since opening, with Property EBITDA rising 53% year-over-year in Q3 2025. Total gross gaming revenue reached US$78.0 million, a 35% increase versus the prior year. Mass market GGR climbed 43% to US$41.0 million. Adjusted EBITDA for Cyprus operations rose to US$23.2 million, representing a 27% margin on operating revenues of US$85.8 million. The resort holds a dominant position as Europe's first true integrated resort and continues to attract high investment to position Cyprus as a leading MICE and luxury tourism destination.

Across these Stars, common attributes include robust revenue growth, expanding Adjusted EBITDA margins, targeted high capital investment to sustain premium experiences, and market share gains in high-growth segments. Key metrics summarized below highlight operational scale and momentum for each Star.

• City of Dreams Macau: US$672.6M operating revenue; US$206.9M Adjusted EBITDA; 15.7% Macau market share; VIP GGR +57%; projected market growth 7% (2025).
• Studio City (Phase 2): US$182.5M Q3 revenue; US$78.1M Adjusted EBITDA; mass gaming revenue US$312.0M; mass table hold 33.1%; non-gaming US$105.2M.
• City of Dreams Mediterranean: US$85.8M operating revenue; US$23.2M Adjusted EBITDA; total GGR US$78.0M; mass GGR US$41.0M; Property EBITDA +53% YoY.

Melco International Development Limited (0200.HK) - BCG Matrix Analysis: Cash Cows

Cash Cows

Mocha Clubs provide steady liquidity streams. Mocha Clubs continue to function as a reliable Cash Cow, generating consistent cash flow with minimal required capital expenditure. For 3Q2025 the segment reported total operating revenues of US$28.6 million and Adjusted EBITDA of US$5.8 million. These operations form part of group liquidity which totaled US$2.27 billion at the reporting date. The electronic gaming machines market in Macau is mature; however Mocha Clubs maintain a high relative market share in the non-casino slot lounge segment and benefit from low incremental investment needs, steady footfall from local customers, and predictable operating costs. Their cash generation supports ongoing debt servicing within a corporate capital structure that includes approximately US$8.08 billion of total debt.

• Predictable cash conversion from operations
• Low reinvestment intensity relative to returns
• Stable local customer base reduces volatility

City of Dreams Manila sustains core profitability. City of Dreams Manila remains a vital Cash Cow despite elevated regional competition, producing operating revenue of US$110.7 million and Adjusted EBITDA of US$30.1 million in 3Q2025, representing a reported EBITDA margin of approximately 27% (US$30.1m / US$110.7m). The resort reported a rolling chip win rate of 4.37% and a mass table hold of 36%, with mass market volumes softening but monetization per customer remaining strong. The property's mature position in the Philippines market requires relatively low incremental capital investment, enabling free cash flow to be repatriated to the parent for debt servicing and selective reinvestment in growth initiatives elsewhere in the portfolio.

• High monetization metrics (rolling chip win, mass hold)
• Mature customer base ensures sustained cash returns
• Limited CapEx needs maximize free cash flow conversion

Melco International Development Limited (0200.HK) - BCG Matrix Analysis: Question Marks

Question Marks

City of Dreams Sri Lanka enters emerging market. City of Dreams Sri Lanka is the group's newest Question Mark, having officially commenced casino operations in August 2025. The project represents a US$125.0 million capital investment in an emerging South Asian gaming market with high growth potential but uncertain regulatory stability.

For Q3 2025 the property recorded initial operating revenues of US$6.1 million and reported an Adjusted EBITDA loss of US$0.6 million. Annualizing the Q3 top-line yields an implied run-rate revenue of approximately US$24.4 million (Q3 × 4), implying a naive payback period on invested capital of roughly 5.1 years (US$125.0m / US$24.4m) before accounting for operating losses, capex sustainment and working capital. As the first integrated resort in Sri Lanka, management targets spillover demand from the Indian subcontinent but long‑term ROI remains unproven and sensitive to cross‑border travel flows and regulatory outcomes.

Non‑gaming entertainment ventures seek scale. Melco's expansion into non‑gaming attractions - including residency concerts and The House of Dancing Water - functions as a Question Mark portfolio cluster. Non‑gaming revenue rose 7.5% year‑on‑year to US$248.0 million in Q3 2025, representing roughly 19% of consolidated revenue, implying total group revenue of approximately US$1,305.3 million for the period (US$248.0m / 0.19 ≈ US$1,305.3m).

These entertainment assets incur high fixed operating costs, programmatic marketing spend and periodic capital maintenance. The company's hypothesis is that an entertainment‑led model will increase visitation and convert into higher average spend per gaming and hospitality guest; however, direct ROI for the individual attractions remains under optimization amid competition from retail‑focused resorts in Macau.

Key operational and financial considerations for these Question Marks:

• Scaling requirement: Both City of Dreams Sri Lanka and non‑gaming ventures require rapid scaling of demand to dilute fixed costs and move from negative or low margins toward break‑even and profitability.
• Marketing & opex intensity: High ongoing marketing spend and programming costs increase short‑term cash burn; Q3 City of Dreams Sri Lanka EBITDA loss demonstrates early stage operating leverage constraints (-US$0.6m).
• Market & regulatory risk: Sri Lanka's regulatory stability, cross‑border travel policies and visa regimes materially affect demand forecasts for the new integrated resort.
• Conversion efficiency: Non‑gaming attractions must convert high visitation into higher‑margin gaming and room revenue; current contribution (19% of revenue) signals scale but not yet proven margin uplift.
• Capital allocation trade‑offs: Continued investment (capex and marketing) versus re‑deployment to established Stars in Macau should be assessed against payback assumptions and sensitivity to traffic recovery scenarios.

Quantitative scenarios to monitor:

• Break‑even trajectory for City of Dreams Sri Lanka: monitor quarterly revenue growth from US$6.1m and trend to positive Adjusted EBITDA beyond Q3 2025; required annualized revenue likely >US$30-40m to offset fixed costs and amortize initial CapEx within a reasonable payback horizon.
• Non‑gaming margin uplift target: track incremental gaming and ADR (average daily rate) lift attributable to entertainment programming; a conversion rate that increases gaming spend per visitor by 10-20% would materially improve ROI for these assets.
• Contribution to consolidated EBITDA: assess whether non‑gaming can move from 19% revenue share to a higher share of consolidated EBITDA via improved operating margins and cross‑sell effectiveness.

Melco International Development Limited (0200.HK) - BCG Matrix Analysis: Dogs

Questions Marks chapter: Dogs

Altira Macau faces structural market challenges. Altira Macau remains in the Dog quadrant due to its low market share and continued struggle to achieve profitability in the post-junket era. Operating revenue for the third quarter of 2025 fell to US$25.6 million, down from US$30.5 million in Q3 2024. The property reported a negative Adjusted EBITDA of US$0.7 million in Q3 2025, continuing a trend of weak financial performance. Mass market table drop for Altira has decreased to US$112.6 million in the trailing quarter, reflecting diminished table flow relative to Cotai rivals. The property lacks the scale, non-gaming attractions and integrated resort ecosystem of Cotai competitors, producing low returns on historical capital investment and an uncertain strategic future.

Key operational and strategic drivers for Altira Macau:

• Loss of high-value junket channels reducing VIP volume and commission offsets.
• Inability to attract scale-seeking mass-market visitors compared with Cotai IRs.
• Ongoing fixed-cost base and limited non-gaming revenue diversification.
• Negative adjusted EBITDA signaling limited near-term reinvestment capacity.

Satellite casino operations wind down. Melco's involvement in satellite casinos, including the recently closed Mocha Kuong Fat, represents a declining Dog segment within the portfolio. The group has progressively exited these operations, reallocating 90 gaming machines to Studio City in September 2025 to maximize yield and consolidate operating assets. These smaller venues face high regulatory hurdles and low growth prospects under Macau's updated gaming laws. Revenue from these secondary locations has been stagnant or declining and contributes less than 2% to the group's total revenue pool. The strategic shift toward large-scale integrated resorts has rendered these satellite operations obsolete, leading to their planned phase-out by the end of 2025.

Primary implications of satellite casino wind-down:

• Short-term cost savings from closing loss-making venues and reallocating assets.
• Loss of geographic and product diversification, increasing concentration risk on core IRs.
• One-off restructuring and relocation costs impacting near-term margins.
• Regulatory environment reduces prospects for small-venue growth, justifying exit.