Analysis of Melco Resorts & Entertainment (00571.HK) Becoming a Hot Stock in Hong Kong Due to Significant Performance Improvement

Melco Resorts & Entertainment (00571.HK) has recently become a hot stock in the Hong Kong stock market, with the core driver being significant performance improvement. According to the 2025 annual results report, the company’s loss narrowed sharply from HK$511 million in 2024 to HK$12.8 million, a narrowing of over 95%[2][4]. The interim results forecast shows that the loss will narrow by no less than 50% year-on-year[3], further strengthening market confidence in the company’s business recovery. The main reasons for the performance improvement include reversal of impairment losses on right-of-use assets and property, plant and equipment, as well as improved performance in the media and entertainment business (especially cinema operations)[0]. From a technical perspective, the stock price shows a clear upward trend, attracting the attention of technical investors[0].

1. Strong Signal of Performance Reversal
   : A loss narrowing of over 95% indicates that the company’s operations have seen substantial improvement, shifting from sustained large losses to a state close to break-even[2][4].
2. Short-term Support from Impairment Reversal
   : This factor is an important support for the current performance improvement, but it is necessary to pay attention to whether subsequent operations can continuously generate positive cash flow to maintain growth[0].
3. Business Synergy Potential
   : The recovery of the cinema business and the synergistic development of technology products and luxury car exhibition businesses provide a diversified path for the company’s long-term growth[0].

• Valuation Repair Room: Performance improvement is expected to drive the company’s valuation to gradually recover from a low level[0].
• Business Expansion Opportunities: The layout of technology products and luxury car exhibition businesses may bring new revenue growth points[0].

• No Dividend Policy: The no-dividend policy for 2025 may affect the holding intention of some income-type investors[2].
• Sustainability of Performance: It is necessary to pay attention to whether the core business can continue to contribute stable profits after the effect of impairment reversal fades[0].
• Market Volatility: As a hot stock, the stock price may experience large fluctuations due to short-term emotional changes[0].

Melco Resorts & Entertainment (00571.HK) has become a hot stock in Hong Kong due to a sharp narrowing of its 2025 annual loss (over 95%) and a positive interim results forecast. The performance improvement mainly comes from impairment reversal of assets and recovery of the media and entertainment business. The market has strong expectations for the company’s business reversal, but it is necessary to pay attention to the sustainability of subsequent operations and the potential impact of the no-dividend policy. Investors should make decisions based on their own risk tolerance and the company’s long-term development prospects.