Sands currently “dwarfs its competitors” in market share, margins, free cash flow generation and return of capital to investors, it said in a note.
“Sands is and should continue to be the largest operator in Mass market and non-gaming over the next 5+ years. The company’s $2.2bn redevelopment and expansion of its Macau properties provides near-term catalyst (2020-2021) to sustain growth of profitability and cash flows and increase Sands’ competitiveness,” it said.
The analysts also pointed out that Marina Bay Sands in Singapore is the world’s most profitable casino and has longer-term growth prospects due to a US$3.3 billion expansion program.
The note said that the company is a front runner for any potential IR license in Japan. The company is focusing on the Yokohama region there. And it has also expressed its interest on investing in Brazil once the country opens the possibility to develop IRs.
“Between Sands China and LVS, depending on investment appetite, Sands China benefits from higher projected growth trajectory in the medium term and greater exposure to macro China economy,” said the report.
“On the other hand, LVS is preferred if more weight is given to stability, diversification and long-term optionality from further developments (Singapore, Japan) and share trading liquidity,” it concluded.
Source: GMB / AG Brief
