Jinwu Financial News | According to the Dongwu Securities (Hong Kong) Research Report, Sands China (01928) achieved a total revenue of 1.68 billion US dollars in 3Q24, recovering to 82.6% in the same period in '19. Among them, VIPs/midfielders (including slots) achieved revenue of 0.18/1.5 billion US dollars, respectively, and recovered to 40.4%/94.2% in the same period of 2019 (referring to the data caliber of the Expo Regulatory Bureau, industry VIPs/midfielders (including slots) recovered to 42.1%/107.1% in the same period in '19, respectively).
The bank said that 3Q24 achieved net revenue of 1.77 billion US dollars, slightly exceeding market expectations of 1.74 billion US dollars, which was flat month-on-month and recovered to 83.1% in the same period in '19. Among them, the gaming/non-gaming business contributed 1.34/0.43 billion US dollars respectively, up 0.5%/2.4% month-on-month respectively, and recovered to 80.2%/97.3% in the same period in '19. The company's gaming business resumed smoothly, mainly due to an 11.1% year-on-year increase in the total number of visitors entering Macau in Q3, with the share of high-value customers increasing. Non-gaming businesses are recovering slowly, mainly because the impact of the Londoner Phase II renovation project on the company's operations is still increasing. About 2,500 of the company's guest rooms were temporarily closed during the 3Q24 renovation project (accounting for 63% of the number of rooms at the Sheraton Hotel and 20% of the company's total number of rooms), and the Pacifica gaming area was closed. The company's management expects 3100-3200 rooms to be closed in Q4, only about 300 new suites will remain open, and the disruption of the renovation project to operations will peak. The project progress company maintains the guidelines “The first hotel building is expected to be renovated at the end of '24, and the second hotel building is expected to be renovated in May '25”.
The bank maintained the company's 2024-2026 net income forecast to $7.11/7.9/8.39 billion, and maintained the adjusted property EBITDA forecast of $2.27/2.75/2.97 billion. The current stock price corresponds to 2024-2026 EV/EBITDA of 9.6/7.9/7.0 times, respectively. The bank believes that the negative impact of the Londoner renovation project on the company's operations is about to peak, and the current valuation is quite attractive. The bank's target price is HK$25.5, and the target price corresponding to 2024-2026 EV/EBITDA is 11.6/9.6/8.5 times, respectively, maintaining a “buy” rating.
