Thank you for holding and welcome to the Galaxy Entertainment Group's management update for the fourth quarter and annual results of 2023. Joining us today are Mr. Ted Chan, Chief Financial Officer; Mr. Roland To, Senior Director of Strategic Planning; and Mr. Peter Caveny, Assistant Senior Vice President of Investor Relations. At this time, all participants' lines are in the listen-only mode. The presentation will be followed by a question-and-answer session, and instructions will be provided at that time. I would now like to pass to Mr. Chan for a presentation. Mr. Chan, please go ahead. Thank you. Thank you, Operator. Hello everyone, and thank you for joining us for the update call on GEG's Q4 and 2023 annual results. Joining me here on today's call is Roland To and Peter Caveny. Copies of our media release, stock exchange announcement, and PowerPoint presentations are available on our website, which also includes our customary disclaimers. All counts continue to rebound due to inbound demand, particularly from Mainland China, where Q4 visitor numbers reached 5.7 million in the quarter, up 383% year-over-year, though there was a slight 2% decrease from Q3. In 2023, total visitor arrivals were 28.2 million. The MGTO has forecast that 2024 will see visitor arrivals grow to 34 million. The market GGR in Q4 was HKD 52.5 billion, up 11% quarter-over-quarter. The mass market segment has been instrumental in this upward trend. For Q4 2023, GEG reported EBITDA of $2.8 billion versus a loss of $163 million over the same period last year, and essentially flat quarter-on-quarter. We played unlucky in Q4, which reduced our EBITDA by $103 million. We are pleased to see a continual ongoing recovery in both visitors arrivals and associated gaming revenue, and we are pleased with our results. We pay a special dividend of $0.20 per share on 27 October 2023. Today, we announced another special dividend of $0.30 per share payable in April 2024. Our special dividends certainly demonstrate our continual confidence in the Macau markets and GEG's future performance, as well as our commitment to return capital to shareholders. We strongly believe in the future of mass gaming and entertainment, and importantly, the mass and others are more sustainable and stable revenue streams. Throughout 2023, GEG has experienced a progressive recovery in mass revenue compared to 2019. At reopening in Q1, our mass revenue was 67% of 2019's level, which we have grown to 107% in Q4. In Q4, Galaxy Macau's mass business performed well, achieving 126% of 2019's level, whereas StarWorld was approximately 75%. GG has a track record of developing high-quality resorts that have proved to be highly attractive to visitors. We continue to refine and upgrade our resorts to make them even more appealing. We are particularly focused on driving our higher-value customer to our properties and converting more of our non-gaming customer to gaming. In quarter four, we were still onboarding our full complement of staff and undertaking significant main gaming floor renovation at Galaxy Macau. In late 2023, we relocated the central premium mass high-limit gaming area and added a number of F&B options. We are also currently completing the construction of a new high-limit slot area and other amenities. At StarWorld, we are evaluating a range of major upgrades that include the main gaming floor, the lobby experience, and increasing F&B options. We are halfway through Q1, and Macau's recovery continues. For the recent Chinese New Year period, our hotels were effectively fully occupied, and the group's mass drop and revenue was 120% of 2019's level. GICC and Galaxy Arena have proved very popular. Throughout the year, GEG held approximately 200 MICE events and 85 concerts and performances across GICC, Galaxy Arena, and Broadway Theatre. We believe strongly that entertainment will expand the addressable market and drive new customers to Macau and our properties. We continue to work hard at managing our cost structure. Our current staff number is equivalent to 93% of 2019's level, even after the opening of Phase 3, including the full opening of Andaz. Staff costs represent around 75% of our OpEx. Our unwavering confidence in the future prospects of Macau is reinforced by our significant investment in the business. During quarter four, we invested approximately HKD 1.4 billion into development, bringing the full-year investment to HKD 5.5 billion. In accordance with the gaming concession agreement, we will increase our investment commitment by 20% over the terms of the concessions. This is a testament to our long-term dedication to helping Macau achieve its vision of becoming a world center of tourism and leisure. Development of Phase 4 is well underway and is scheduled to complete in 2027. We will continue to adjust the development timeline in accordance with the market demand. We believe that with the many additional facilities that we have added and will continue to add in the future, we position ourselves strongly for longer-term growth. Additionally, to support the government's goal of expanding international visitors to Macau, we have opened our overseas offices in Tokyo and Seoul, and we are opening an office in Bangkok soon. Last, on the balance sheet, cash and liquid investments were HKD 25 billion at the end of December 2023, and we are in a net cash position of HKD 23.5 billion. That concludes my prepared remarks. Operator, please begin the Q&A session. Thank you. We will now begin our question-and-answer session. If you have a question for today's speakers, please press star one on your telephone keypad, and you will enter a queue. After you are announced, please ask your question. If you find that your question has been answered before it is your turn to speak, please press star two to cancel the question. So once again, please press star one on your telephone keypad to ask a question. We'll now take our first question from DS Kim from JP Morgan. Please go ahead. Hi Ted. Hi Peter. Hi Roland. Good evening, and thanks a lot for taking my questions, and Happy Chinese New Year. First of all, I think our market share in fourth quarter dipped slightly below 18% in the last quarter, and I'm wondering if you could share with us how was our January market share given GGR was already public. That's the first question. And secondly, as you also remarked in the prepared remark, we noticed a number of updates and upgrades on the gaming floor and some of the F&Bs. And can you give us a summary or recap of what we are doing to achieve our fair shares, if you will, in coming quarters and years, how some of those premium mass areas and whatnot could help us achieve our goal? Third, as you know, a lot of discussions on smart chips, RFID tables, and whatnot, like Walker Digital and those vendors. Can I ask what's our plan for the use of technology, some timeline, and how we can fine-tune operationally to help, again, gain our fair shares in coming quarters? I may have a follow-up after this. Thank you. Sure. Yes. I think, allow me to answer the question in more details as the following. First of all, I think I'm not able to provide a number on this quarter, but I can surely acknowledge the share price the market share decline recently was actually below 18%. Look, I'd like to offer the following thoughts. We believe the market share decline is not a fundamental shift from our players' preferences. And we strongly believe that what we've built is with very high quality and aligned with our customer expectations, to be honest. And we are also very proud of our service delivered by our team members. So look, Macau has transformed successfully from a VIP junket-focused market to a more mass-centric. And the demand from these mass or premium mass customers is actually surging. They are not purely looking at one price point on the gaming experience, but many, many others. We think that the importance of non-gaming and particularly entertainment is important to drive and retain our discerning customers in this market. We believe that GG has built a very high-quality resort, and especially in Phase 3. We are not just ticking all the boxes, but we believe that we are the leaders in terms of this in the regions. Having said so, we do recognize that the market share declined in recent quarters, and we identified that could be some technical issues. It's not a fundamental shift. That technical issues really demand us to pay more attention to our sales and host system in our company. I can assure you that we are addressing it now. Looking forward, as I mentioned earlier in my opening remarks, we've done some gaming floor reconfigurations, so basically relocating the central high-limit area to the south part of the area, and we also add some F&B options into that. The whole area is actually completed before the Chinese New Year. We are also adding some high-limit slot area going forward. So effectively, we believe that, that will be reflected in the number, perhaps in the next few months. So looking at some of the technologies that you mentioned, the RFID, of course, that will contribute to a lot of improvement in effectiveness and efficiency of the gaming floor as well as the integrity of the floor. We are already starting the process, and we are planning to launch out all these technology-related initiatives during the year. So trust us, GG really maintains the most status in our management team. We are no stranger to the competition's environment, and we are confident that we're addressing the market. But in general, in the end, we believe the market is big enough that all of us can share our fair share. And in large, we believe that we should be competing in quality, service, size, creativities, and variety of products that which place Macau at the top destination of our customers. I hope that my long elaborations of my answer could actually address some of the concerns. Yes. Thank you, sir. And yes, it did. And thanks a lot for the insight and the comprehensive recap. And I cannot agree with you more in that our products are definitely best-in-class quality in Macau, if not in the world. So I just hope that we can get our fair shares sooner than later. But if I may ask a couple of housekeeping questions as a follow-up, first, can I ask our CapEx budget for this year, if possible, breakdown by maintenance versus Phase 3 and for the new chapter expansion versus the concession-related commitment, if possible? And then second question is, when you earlier sorry, I missed your remark earlier. You said 120% of 2019 level for CNY. Did we talk about mass drop only or mass GGR, or are we referring to GEG or Galaxy Macau? Just a clarification, and I'll go back to the queue. Thank you so much. No problem. So regarding the Chinese New Year period, the 120% refers to both drop and mass gaming revenue of the GEG level. In terms of the CapEx, we spent a total of HKD 5.5 billion in the year 2023, and the majority of that is expansionary, and we only spend very small amounts in terms of maintenance CapEx. I'll give you a number, which is lower than HKD 300 million in terms of maintenance CapEx. Most of it is expansionary CapEx, including Phase 4 and Phase 3. Thank you. I'm so sorry, but when I say this year, may I follow up on 2024 this year's 2024 budget for CapEx? Sorry for that. Thank you so much. No problem. 2024, we are looking at Phase 3 and Phase 4, predominantly Phase 4, investing around HKD 5.1 billion. Thank you. That's Phase 4-related CapEx, and I suspect we have a bit on Phase 3 and the maintenance and concession-related, right? Yeah. That will be less than $1 billion additional to that. Got it. Thank you so much, sir. I'll go back to the queue. Thank you. Sorry. Go ahead, Your line is open. Turn Turn the mute function on your phone and switch it off. Of course, if we can't hear you at this time, we'll move to the next question from Praveen Choudhary from Morgan Stanley. Please go ahead. Praveen Choudhary? Hi. Can you hear me? Yes, we can hear you now. Thank you. Hi. Hey, thanks. Hi, Ted. Thank you so much for the presentation, and thanks for taking my call. I have two questions. One, I wanted to understand the segmentation on grind versus Premium Mass in terms of how they are tracking. And I understand most of the other competitors are now focused on Premium Mass. Do you think that because of which, to gain back the market share, you may have to throw or spend more money on promotions, which can result in higher spending across the board for the entire sector? Or you think that just by product innovation and managing the host system, you don't have to increase the OpEx or promotional expenses? That's the first question I have. The second question I had was an EBITDA recovery. So EBITDA recovery as a percentage of 2019 has been a little bit lower than some of your peers. And then this is despite, obviously, more capacity that has been added in the last year in Phase 3. So I just want to understand, do we have a plan to get back to market-level of recovery in 2024? Thank you. That's it from me. Great, Praveen. So let me address the. I think I mentioned something about the product initiative as well as the sales and host system improvement. For sure, we are also looking at alignment with the Premium Mass segment in terms of pricing as well. But Premium Mass is actually a big segment ranging from a very low ADT level to a very high one. We do identify that we should have done a better job in terms of looking at a higher Premium Mass segment than we are looking at our sales force focus on this area. So that's one thing. And secondly, I think in terms of reinvestment, if you look at our Q4, it's actually a little bit lower than Q3. So we should be able to adjust it a little bit on addressing that matter. So that's on the Premium Mass. But if you look at our numbers, the premium mass area, in general, is doing better than the base mass and casual mass. Base mass and casual mass has not really reached out up to 2019's level. So these are the areas subject to recovery of the visitor arrivals numbers. And we believe that 2024 will be a great year when these base mass and casual mass coming back to Macau, and we should be able to capture our fair share on that particular segment. So addressing these two segments, hopefully, we could be seeing a bit of regaining some of the market share that we lost in the last few months. In terms of EBITDA, look, perhaps GEG is a bit different from some of the market players, whereby we not only have to keep up with the 2019's operation level, but also we're expanding in Phase 3. So we're expanding our property. So inevitably, in Q3 to Q4, we continue to increase our OPEX. So currently, our number of staff is about 93% of 2019's level. So we believe that we'll be tied with 2019's level in terms of total OpEx around this quarter. So I believe that the OpEx and operating the companies will be quite stabilized in this quarter. So going forward, you will see a more meaningful operating leverage or operating flow-through happening in the next few quarters. And hopefully, we can try our very best to improve our EBITDA level as much as we can to reach the 2019's level. Thanks, Ted. This is super clear. And thank you for explaining. Can I just follow up a question that DS was asking on the CapEx? Did you mention that you will spend growth CapEx on Phase 4 of HKD 5.1 billion but other CapEx of HKD 1 billion? Just wanted to make sure that HKD 1 billion includes the government commitment. Remember, we have to spend a lot of money on OpEx and CapEx. So the factory's $1 billion, especially on Phase 4. That's on the plan. The additional CapEx is more on the expansion and the requirement. For instance, the Galaxy Macau and also StarWorld, we're doing some of the amendments on the offering. So that will be something that we're looking at. That does not include any of the CapEx requirements. We are still in the process of getting the approval, especially after the $180 billion last year triggered another 20% increase in our commitment. So overall, we should be spending a bit higher on this number. Our 30-year tender commitment to the government is over $30 billion. So you may believe that we're spending all about $3 billion CapEx and OpEx. The government are quite flexible at this stage when we talk to them in terms of mix between CapEx and OpEx. That's why I cannot really give you a clear number in terms of the CapEx number. All of these commitments actually embedded into our operation in both CapEx and OpEx. Understood. That's, again, super, super clear. Thank you, Ted. And all the best for this quarter and going forward. Appreciate it. Thank you. Thank you. We will now move to our next question from Ronald Leung from Bank of America. Please go ahead. Hey. Hello, Ted, Roland, and Peter. Good evening. Thank you very much for taking my questions. So I have two questions. My first question is a follow-up of your previous remark. Could you please share a bit more details on how you are planning to reframing your sales and host system? This is my first question. Another question is about your new hotel, which is part of the Phase 3 with 100 hotel rooms. Could you share any timeline of that hotel? When will it be launched? Thank you very much. Okay. So let me elaborate a bit. So I think this is a known mechanism in terms of follow-up on the Premium Mass space. So the Premium Mass customer, particularly the high-end Premium Mass customer, normally will be taken care of by the host and sales. We find that there is a big opportunity for us to focus a bit on this particular high-end Premium Mass customer space. We do have. I personally believe that we have a bigger fair share of database in terms of this space. We just need more of our sales force to follow up, and we are on the verge of focusing a bit on this area, which means it's more internal that we are increasing the number of sales force to target on this customer. So that's what I'm referring to. The 100-room property, that will be what we call 3D projects, part of the Phase 3 projects. We are targeting to open in 2025. That will be a very high-end luxury product, very unique to the market. That will also, I believe, that that will address very, very much on the very high-end Premium Mass segment that we are looking at. Unfortunately, we probably will be able to launch it next year. We'll try our very best to align with the timetable in terms of launching the project. I see. Yeah. Thank you very much, Ted. Thank you. As a reminder, to ask a question, please signal by pressing star one now. And our next question comes from Simon Cheung from Goldman Sachs. Please go ahead. Hi. Thanks for the presentation, Ted. I just have also two questions. When I look at your phasing of the new project, you have launched Phase 3 late last year. Then you have one more year down the road. You have that 100 room. Then you need another maybe two years down the road. Then you do a Phase 4. Whereas I think some of your competitors, like Londoner, are they obviously rushing and keep talking, telling the market that they want to get everything done by Chinese New Year, 2025, for example. So I just wanted to get a sense that from your perspective, when you think about phasing it, was that really an issue of demand? Because you did mention that your hotel room is actually fully occupied. So I just wonder why wouldn't you want to get it done earlier? Or is that other consideration? Because I guess financially, you are actually quite healthy to your point about net cash position. I think that's the first question. And then on the second question, just following up on, I think, what DS were asking, just in relation to that non-gaming commitments, the concessionaire, whether it's CapEx or OpEx, wondering if you can share with us, if possible, whether it's in aggregate or in a breakdown format, what you had incurred last year and what you would be incurring this year. Thank you. All right, Simon. In terms of phasing, we always talked about we would like to time the opening according with the market demand. And last year, when we opened up, in the first half of the year, we were quite not sure the market would end. But effectively, it's quite good in terms of recovery as experienced last year. So we're quite confident in the market. We're quite confident in the recovery as well as Macau as a top destination for our feeder markets. We're full-on. And we have to appreciate, though, that building brand new buildings is quite different from renovations or modifications of the property. So there's a lot to do with the construction timeline. Rest assured, we are trying our very best to open as soon as we can. That's also our mindset at this time. So in summary, the super high-end luxury 100-room product will be available next year, 2025. And we're on time for the Phase Four opening in 2027. So we'll try our best to deliver that space. In terms of commitment to the government, last year, we did a little bit more than $3 billion in total in terms of CapEx and OpEx commitment to the government. This year, what we submitted to the government so far and approved by the government so far was around HKD 3 billion. And because of the mechanism to increase the 20% commitment amount, we shall be submitting our proposal to the government sometime in April and subject to approval by the government probably around middle of the year. So we'll have more clarity on the overall. But let's say a ballpark, a little bit more than HKD 3 billion in terms of total commitment for 2024. Thanks for that. Actually, one more point, one more question I wanted to ask just on your point about high-end premium mass customers. Because obviously, that's a segment seemingly everyone has been chasing. Just wanted to get a sense about the margin profile. Are we talking about margin profile getting as close as your direct VIP? Or is that still some sort of room that you can actually making a bit more margin out of the premium mass segment, at least on the high-end premium mass? And therefore, by driving that premium mass segment, high-end premium mass segment, perhaps we want to get a sense about the gross margin impact overall. Thank you. All right. In terms of the very high-end premium mass, absolutely, it's actually higher than the premium direct. So the premium direct is around 20%. If you take into account of some provision for bad debt, it's even lower than that number. For the high-end premium mass segment, I think it is actually higher than that number. From what I can see in our book, we will try very hard to not look into the price point but also in a lot of other soft touch and soft offering in order to improve that segment. So rest assured, we have a very, very important and good module to look at that area. So give us some time. We hope the result will be seen in the next few months. Okay. Thanks a lot, Ted. Thank you. Thanks, Simon. We will now move to our next question from Shengyong Goh from CICC. Please go ahead. Hi, Ted. Hi, Peter. Hi, Roland. Yeah, just a couple of questions. First one is on new high-end product and alongside with Andaz. Will we actually have plans for casino operations in Andaz at all at the high-end hotel product? Yeah. So I'll have a follow-up. Currently, Andaz is actually used purely for a non-gaming clientele with a couple of reasons. First of all, I think it makes more sense with Andaz sitting on top of the arena and the MICE. It makes more sense for alignment with this type of customers. And secondly, that will release more inventory for us to focus on the gaming customer on the Galaxy's area. The proximity to casino gaming area is one important element that we should also consider apart from the quality of the rooms. So I think we believe that having Andaz sitting as pure non-gaming, allowing more rooms for the gaming customer makes sense to us. For the high-end hotel product? For the high-end hotel product that will be due to open next year, that will be only for our top premium mass customer and our VIP direct customer. Oh, so I'm sorry. My question was, will we have a casino product at the Phase 3D? Or will it be similar to Andaz where they do not have a casino product? Oh, oh, sorry. Okay. So Okay. So Okay. So first of all, there will be no casino in Andaz at all. And Andaz is actually connected directly to the gaming floor. So there's no casino in there. But it's actually directly on the casino floor. So no problem with that. Got it. All right. Oh, my second question is actually to do with our net rental in Galaxy Macau. So I mean, so given that most of the whole of 2023, it's pretty much back to normal, and the revenues are a little choppy. So I'm just wondering, are our high-end luxury tenants on a turnover program, or are they on a fixed based rent program? Because yeah, so just trying to understand the choppiness of the rental revenue. We have a mix of base and turnover rent on all the shops. But for the luxury one, of course, different shops have different agreements. But in general, over the last few quarters, all turnover rent mechanisms kicked in, which means it's more than a base. So some of the base rents are coming from maybe Phase 1 or Phase 2 area. But for the performance ones, all of them are on the turnover rent already. So our treatment is a bit different from some of the other operators. We do the calculation on a monthly basis. So on the monthly turnover, we're seeing such trends already in the last few quarters. Got it. It's monthly turnover. Okay. Thank you. Thank you. We will now move. Brian Gong, please make sure the mute function is switched off. Your line is open. Yeah, sure. Thank you. Can you guys hear me? Yes. Yeah, sure. So my question is also on our long-term CapEx fund. Because when I look at our concession contract with the government, so I see that the overall amount is actually not very high compared to our CapEx for Galaxy Phase 3 and Phase 4. So I just wondered if there will be any potential increase on that. Because I was thinking that if the government in the middle of the 20 years, they'll say that, "Hey, I want you guys to pay more in exchange for this contract." So I just wondered if that so will that be a risk for us? And secondly, is that I see that you are opening more hotel rooms, which is a good thing. So I just wondered, is it possible for us to get more tables? So if we promise to spend more on the non-gaming side. Yeah. All right. So thank you for the questions. Let me address the second question first before I go to the first one. I'll have to clarify on the first one first. For the tables, well, the gaming concession just renewed since last year. So we just passed one year of the new gaming concession renewal. We haven't heard from the government in terms of the flexibility of increasing the number of tables to concessionaire. We hope so. In the past history in Macau, we believe the Macau government are very, very pragmatic, and they address market issues accordingly. So we have past history of the Macau government aligning the demand of the gaming tables. So far, we haven't heard anything from the government. But if you look at on a fresh basis, we did a lot. We basically listened to what the government wants us to do in terms of performing the non-gaming. We think that we are one of the largest contributors in terms of non-gaming investment in Macau, if you look at the numbers carefully. In the future, if there is any opportunity for a table increase, we definitely will be the first one to raise our hand for more tables. Particularly our Phase 4, currently, our plan is actually we have a casino in Phase 4. Before the open, I definitely would like to clarify with the government if there's any possibility to have more tables that are allocated to the Galaxy. In terms of the commitment on the non-gaming commitment to the government in the next 10 years, I cannot comment too much on whether we have a fair share in terms of the non-gaming commitment. But overall, we're happy with what the government in terms of our submissions. And we think it's fair that we submit the plan last year and deliver what we've delivered, which is around $3 billion CapEx plus OpEx. And for this year, we also do similar, which is also in a ballpark number around $3 billion for this year. The government's also flexible in terms of changing intra-year in terms of CapEx and OpEx mixes. It really depends on each operator's demand. So it's still the beginning of the year. So we will submit another submission sometime around April. And hopefully, we'll get more clarity by the middle of the year. Sure, sure. Understood. So my question is also on the $3 billion that you spend on the non-gaming side in both CapEx and OpEx. So I wonder, can you help me to roughly break it down, say, for example, before this can help me to better understand your cost structure and also your margins? Sorry. I think you're referring to our commitments, which is two-thirds on OpEx and one-third on CapEx, correct? So on all the non OpEx, which is two-thirds of it, is all embedded in our operations, which is all in our marketing, our events, including our arena, etc. So these margins actually reflect in the F&B, in the entertainment segment, and also the arena segments in there. Okay. Sure. Sure. Thank you. So in terms of 2023, so the breakdown between OpEx and CapEx is also like two-thirds is on the OpEx side, right? In terms of 2023, the plans are still 2/3 and 1/3. But eventually, after Q4, we close the book. It's eventually roughly 50/50 in 2023. Yeah. Okay. Sure, Galaxy. And also, so if I project your free cash flow, so when I projected for a longer time, I found out that after your Phase Four CapEx, so I see that your free cash flow could increase three months, so if there's no new projects. So I wonder if you are planning, so if you have any long-term plan for any projects outside of the Phase Four? Yeah. If you look at the free cash flow generations and lump into the non-gaming commitments, it's not an easy job. So because we embed everything in our operation, we do not have a separate line stating the non-gaming commitments. So I believe if you look at the cash flow number, the net cash at the moment, HKD 23.5 billion, is actually effectively telling you that even we commit three we generate sorry, we commit and deliver HKD 3 billion into last year, we'd still be able to generate a similar number as EBITDA generated. So it's a bit complicated, but you can see EBITDA number, EBITDA margin, but also the cash position of the company. Sure, sure, sure. Thank you so much. I have no more questions. Thank you. Thank you so much. Thank you for. There are currently no other questions in the queue. All right. Thank you very much for joining us for the Q4 and the results. I'll see you on the next quarter's call. Thank you very much. Thank you. This is the end of the Galaxy Entertainment Group's conference call. Thank you for joining us today. You may now disconnect.