Analysis of Popularity Reasons and Risks of Melco Resorts & Entertainment (00571.HK) in Hong Kong Stock Market

1. Company & Industry Background
   : Melco Resorts & Entertainment (00571.HK) mainly engages in media and entertainment businesses (film/TV production, cinema operation, music distribution, etc.) [1], with its parent company being Lai Sun Development (00488.HK). The company’s share price closed at HK$0.040 in the half-day trading session on Christmas Eve (December 24, 2025), which is in the 52-week low range [1].

2. Reasons for Popularity
   :
   • Catalyzed by related transaction
     : On December 11, parent company Lai Sun Development announced the sale of a property in Central, Hong Kong to JD.com for HK$3.498 billion [2], which aroused overall market attention to listed companies under the Lai Sun Group and indirectly boosted the popularity of Melco Resorts & Entertainment.
   • Attractive investment attributes
     : As a Hong Kong dollar-denominated low-price stock (share price below HK$0.1), coupled with a significant three-year gain of 84.62% (far exceeding the Hang Seng Index’s 31.78% over the same period) [1], it has attracted investors who prefer short-term speculation.
   • Sector sentiment support
     : The media and entertainment sector has recently seen a short-term sentiment recovery due to consumption recovery expectations, providing industry-level support for the company’s share price.

On December 24, 2025, trading data showed that the company’s closing price was HK$0.040, down 4.76% from the previous day, with a trading volume of 691,000 shares, slightly lower than the average volume of 868,406 shares [1]. The current price is close to the 52-week low of HK$0.039 [1].

• Market performance dominated by speculative sentiment
  : The company’s market capitalization is only about HK$70 million, with average daily trading volume of less than 1 million shares and limited institutional participation. Market sentiment is easily influenced by retail funds [1].
• Holiday effect impacts information accuracy
  : The event occurred during the Hong Kong market’s Christmas holiday (closed on December 25-26), and the current price is the half-day quotation on December 24. The subsequent real trend needs to be watched after the market resumes trading on December 29.

• Liquidity risk
  : The average daily trading volume is low, so large transactions may lead to significant price fluctuations [1].
• Profitability risk
  : The company’s earnings per share over the past 12 months was -HK$0.010, which is in a loss state [1].
• Speculation risk
  : As a low-price stock, its share price is easily affected by short-term sentiment and lacks fundamental support.

• Group resource synergy
  : The property transaction of parent company Lai Sun Development brings cash flow to the group, which may provide potential support for the business development of Melco Resorts & Entertainment.
• Sector recovery potential
  : If the consumption recovery expectations for the media and entertainment sector are realized, it may bring industry opportunities to the company.

Melco Resorts & Entertainment (00571.HK) became a popular stock in Hong Kong mainly due to the parent company’s related transaction, low-price stock attribute, and short-term sector sentiment. The company currently faces risks such as liquidity and profitability, and market sentiment is dominated by speculation. Investors need to pay attention to the price performance after the market resumes, especially the support level of HK$0.039 and the resistance level of HK$0.042.