SJM Holdings has renewed its services agreement with its controlling shareholder, Sociedade de Turismo e Diversões de Macau (STDM), while reaffirming that the New Yaohan department store would be leaving the Grand Lisboa Palace Resort by early 2027, a statement filed with the Hong Kong Stock Exchange showed.
The disclosure covers a renewed Products and Services Master Agreement governing hotel accommodation, promotional and advertising services procured by SJM from STDM, alongside a separate arrangement to wind down New Yaohan’s retail presence within the Cotai integrated resort.
Retail exit and space reallocation
Under the termination arrangement, NYH Gestão de Vendas a Retalho Lda, the STDM subsidiary operating the New Yaohan brand inside the resort, will begin vacating the retail space on 31 December 2026. The space must be returned to SJM within 60 days, with the right-of-use agreement formally concluding on 1 January 2027.
SJM will pay a termination consideration of HKD 31.9 million (approximately $4.1 million) in connection with the exit. The company stated in the filing that repurposing the space could “better align with evolving consumer preferences” and may help “strengthen Grand Lisboa Palace Resort’s overall competitiveness in the Cotai market.”
The exit marks the termination of a retail relationship that offered a department store model within a resort setting where spending patterns continue to evolve since the opening of the property. Adjusted property EBITDA at Grand Lisboa Palace came in at HKD 165 million ($21.09 million) in 2025, a significant decline from the prior year’s HKD 499 million ($63.78 million).
Services agreement caps
The renewed agreement sets formal limits on how much SJM can spend on STDM-sourced services during 2026, covering hotel accommodation and promotional activity across its Macau operations.
Both categories have seen steady increases in recent years. Hotel accommodation spending nearly doubled between 2023 and 2025, while promotional and advertising expenditure grew by around 70 percent over the same period. The 2026 caps reflect that upward trend, giving the arrangement room to expand further if required.
Because STDM owns just under 55 percent of SJM Holdings, any commercial dealings between the two companies fall under Hong Kong Stock Exchange rules governing related-party transactions. Those rules require listed companies to disclose the scope of such arrangements publicly, set annual spending limits, and obtain board approval, giving minority shareholders a clear view of how group relationships are structured commercially.
Chip redemption obligations extended
The filing also included the redemption of gaming chips. SJM admitted that there is an annual limitation of HKD 75.8 million ($9.7 million) for the redemption of STDM gaming chips, which is a liability related to historical arrangements under previous concession periods when STDM directly managed gaming activity.
The limitation is effective for 2026, 2027, and 2028. The ongoing nature of the redemption obligation is a reflection of the extent of the operational relationship between SJM and its parent, moving beyond the scope of current services to historical gaming liabilities still on the books.
Regulatory framework and oversight
Connected transaction disclosures of this kind are a routine but significant feature of the Hong Kong-listed gaming sector. They require companies to quantify, cap, and publicly report the financial scope of dealings with related parties, ensuring minority shareholders have visibility into transactions that might otherwise occur outside market scrutiny.
For SJM, the STDM relationship underpins several operational functions, from hotel services sourced across the group’s Macau portfolio to promotional activity. The renewed agreement formalises those arrangements for the current financial year within the parameters required by the exchange.
The New Yaohan tenancy termination and the services agreement renewal were both approved at board level ahead of the filing. With the retail handover not due until early 2027, operational continuity at Grand Lisboa Palace is maintained through the remainder of this year.
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