Post by Blitz on Oct 24, 2024 7:08:17 GMT -5
Sands China retains its market share at 24% in 3Q24: Citigroup
Viviana Chan - October 24, 2024
agbrief.com/news/macau/24/10/2024/sands-china-retains-its-market-share-at-24-in-3q24-citigroup/
Despite the slight quarterly decline in net revenue, Sands China‘s gross gaming revenue (GGR) market share remained largely unchanged quarter-over-quarter at 24 percent, notes Citigroup.
This assessment follows the company’s mixed financial performance for 3Q24, which was announced on Wednesday.
Analyst George Choi notes that Sands China’s net revenue for the third quarter dropped by 1 percent year-over-year to $1.77 billion, although it saw a slight increase of 1 percent quarter-over-quarter.
In terms of gaming segments, premium mass GGR saw a notable increase of 16 percent year-over-year, amounting to $702 million for the quarter. In contrast, base mass GGR declined by 7 percent year-over-year to $636 million.
Overall, total mass table GGR increased by 4 percent year-over-year to $1.34 billion, despite a 2 percent decline quarter-over-quarter. Slot GGR grew by 5 percent year-over-year and remained flat compared to the previous quarter.
VIP GGR experienced a 5 percent year-over-year decline to $177 million, largely due to a lower hold of 3.23 percent compared to 3.82 percent in 3Q23.
The property EBITDA decreased 7 percent year-over-year to $585 million but rose 4 percent from the previous quarter. This figure slightly surpassed Citigroup’s forecast of $576 million and exceeded consensus expectations of $545 million.
After adjusting for the minor impact of the VIP hold, property’s EBITDA would have reached $587 million. The luck-adjusted EBITDA margin fell by approximately 1.8 percentage points year-over-year, landing at 33.1 percent in 3Q24. However, without the disruptions at the Londoner, this margin would have been 35.1 percent. The luck-adjusted EBITDA indicates a recovery of about 77 percent compared to 3Q19 levels.
EBITDA recovery to accelerate after Londoner Grand online
The brokerage indicates that despite the significant disruptions from the Londoner, Sands China achieved a 4 percent increase in EBITDA for 3Q24, beating consensus estimates by 7 percent. Citigroup anticipates that Sands China’s EBITDA recovery will accelerate as the Londoner Grand comes back online, projecting further improvements through to 2Q25.
While retail sales across Asia have been weak, Sands China’s management emphasizes that gaming demand in Macau remains strong, showing double-digit growth year-over-year in 3Q24.
Additionally, management indicated a possibility of resuming dividends in FY25, with a projected dividend per share of HK$0.75, suggesting a yield of around 4 percent.
In light of these results, Citigroup has raised its target price for Sands China from HK$25.80 to HK$26.30, reflecting the latest operational trends. The bank continues to view Sands China as a top pick in Macau, particularly due to its significant new supply set for next year, including a renovated casino and an additional 2,400 rooms and suites at the Londoner Grand.
Viviana Chan - October 24, 2024
agbrief.com/news/macau/24/10/2024/sands-china-retains-its-market-share-at-24-in-3q24-citigroup/
Despite the slight quarterly decline in net revenue, Sands China‘s gross gaming revenue (GGR) market share remained largely unchanged quarter-over-quarter at 24 percent, notes Citigroup.
This assessment follows the company’s mixed financial performance for 3Q24, which was announced on Wednesday.
Analyst George Choi notes that Sands China’s net revenue for the third quarter dropped by 1 percent year-over-year to $1.77 billion, although it saw a slight increase of 1 percent quarter-over-quarter.
In terms of gaming segments, premium mass GGR saw a notable increase of 16 percent year-over-year, amounting to $702 million for the quarter. In contrast, base mass GGR declined by 7 percent year-over-year to $636 million.
Overall, total mass table GGR increased by 4 percent year-over-year to $1.34 billion, despite a 2 percent decline quarter-over-quarter. Slot GGR grew by 5 percent year-over-year and remained flat compared to the previous quarter.
VIP GGR experienced a 5 percent year-over-year decline to $177 million, largely due to a lower hold of 3.23 percent compared to 3.82 percent in 3Q23.
The property EBITDA decreased 7 percent year-over-year to $585 million but rose 4 percent from the previous quarter. This figure slightly surpassed Citigroup’s forecast of $576 million and exceeded consensus expectations of $545 million.
After adjusting for the minor impact of the VIP hold, property’s EBITDA would have reached $587 million. The luck-adjusted EBITDA margin fell by approximately 1.8 percentage points year-over-year, landing at 33.1 percent in 3Q24. However, without the disruptions at the Londoner, this margin would have been 35.1 percent. The luck-adjusted EBITDA indicates a recovery of about 77 percent compared to 3Q19 levels.
EBITDA recovery to accelerate after Londoner Grand online
The brokerage indicates that despite the significant disruptions from the Londoner, Sands China achieved a 4 percent increase in EBITDA for 3Q24, beating consensus estimates by 7 percent. Citigroup anticipates that Sands China’s EBITDA recovery will accelerate as the Londoner Grand comes back online, projecting further improvements through to 2Q25.
While retail sales across Asia have been weak, Sands China’s management emphasizes that gaming demand in Macau remains strong, showing double-digit growth year-over-year in 3Q24.
Additionally, management indicated a possibility of resuming dividends in FY25, with a projected dividend per share of HK$0.75, suggesting a yield of around 4 percent.
In light of these results, Citigroup has raised its target price for Sands China from HK$25.80 to HK$26.30, reflecting the latest operational trends. The bank continues to view Sands China as a top pick in Macau, particularly due to its significant new supply set for next year, including a renovated casino and an additional 2,400 rooms and suites at the Londoner Grand.