Analysis of Melco Resorts & Entertainment (00571.HK): Balancing Long-Term Performance and Short-Term Volatility

This analysis is based on the event that Melco Resorts & Entertainment (00571.HK) became a popular target as reported on the hot list (soaring list, Hong Kong stock market) of the East Money App [1], combined with internal analysis [0] and external sources [2-6] for comprehensive evaluation. The company’s core businesses include cinema operation, media entertainment, etc. [0]. Its long-term returns have significantly outperformed the market, but its recent stock price has dropped by 8.33% [0], and its financial structure shows high debt characteristics [0].

Melco Resorts & Entertainment (00571.HK) was established in 1972, formerly known as Jetta United Development Co., Ltd., and listed on the Hong Kong Stock Exchange in 1973 [0][2]. Currently, its main businesses include cinema operation, media entertainment investment, artist management, etc. [0], and it is an investment holding company in the motion picture theaters and products industry [0].

• Long-term Performance
  : 3-year return of 87.43%, 5-year return of 91.70%, significantly outperforming the market [0];
• 2025 Performance
  : Up 16.98% year-to-date, but underperforming the Hang Seng Index’s 29.01% gain [0];
• Recent Volatility
  : Current stock price is HK$0.044, market capitalization is HK$82.53 million (small-cap Hong Kong stock) [0], with a single-day drop of 8.33% [0] (Aastocks reported 6.383% [4], reflecting differences in short-term price volatility);

• Total assets of HK$1.836 billion, liabilities of HK$1.788 billion, and shareholders’ equity of only HK$118 million [0];
• Debt-to-equity ratio of approximately 15.15x, showing high leverage characteristics [0];

1. Divergence Between Long-term and Short-term Performance
   : Excellent long-term returns but underperforming the market in 2025, reflecting a mismatch between the pace of industry recovery and market expectations [0];
2. Financial Structure Risk
   : The combination of high debt (HK$1.788 billion) and low shareholders’ equity (HK$118 million) may limit future expansion capabilities [0];
3. Small-cap Volatility
   : As a small-cap stock with a market capitalization of HK$82.53 million, its stock price is sensitive to market sentiment [0];

• Financial Risk
  : High debt levels may bring liquidity pressure [0];
• Short-term Volatility
  : Recent stock price decline reflects changes in market sentiment [0][4];
• Underperformance
  : Underperforming the Hang Seng Index in 2025, need to pay attention to the progress of industry recovery [0];

• Industry Recovery
  : The recovery of the entertainment industry in the post-pandemic era brings growth space for core businesses [0];
• Long-term Track Record
  : 3-year/5-year returns significantly outperform the market, showing fundamental resilience [0];

###5. Key Information Summary
As a comprehensive entertainment investment enterprise, Melco Resorts & Entertainment (00571.HK) has excellent long-term return performance, but recent stock price volatility and high debt structure need to be focused on. Investors should objectively evaluate its investment value by combining industry recovery trends [0], company financial status [0], and market liquidity [3].