FIRST SHANGHAI has reiterated its "Buy" rating on Sands China Ltd (01928) with a target price of HK$25.11, citing strong Q3 2025 performance. The bank believes the company's revenue and profits will continue to grow with the full operation of The Londoner Macao Phase 2 and the implementation of new promotional strategies. As the largest integrated resort operator in Macau, Sands China holds a leading position in the mass-market and non-gaming sectors, bolstering the bank's confidence in its long-term prospects.
Key highlights from Q3 2025: - Net revenue rose 7.3% YoY and 6.1% QoQ to $1.9 billion (recovering to 90% of 2019 levels). - VIP segment declined 16.3% YoY and 5.2% QoQ (34% of 2019 levels), while mass-market gaming grew 12.1% YoY and 9.0% QoQ (premium mass up 6.3% YoY and 10.8% QoQ; base mass up 18.6% YoY and 7.3% QoQ), partly driven by The Londoner's new casino offerings. - Retail revenue and operating profit increased 4.0%/4.6% YoY and 4.0%/3.7% QoQ. - Hotel occupancy reached 96.8%, with an average daily rate of $230. - Adjusted EBITDA grew 2.7% YoY and 6.2% QoQ to $600 million (80% of 2019 levels; typhoon impact estimated at $20 million). - EBITDA margin dipped 1.4pp YoY but remained stable QoQ at 31.6%. - Net profit rose 1.5% YoY and 27.1% QoQ to $270 million.
Sands China’s mass and slot market share rebounded to 25.4% (up 0.5pp YoY and 1.4pp QoQ). The group held $1.13 billion in cash, with net debt decreasing by $150 million to $5.79 billion.
Property performance: - The Venetian Macao, The Londoner, Parisian Macao, Four Seasons Macao, and Sands Macao generated revenues of $692M, $686M, $218M, $206M, and $72M, respectively. - Adjusted EBITDA for these properties stood at $242M (71% of 2019), $219M (130%), $53M (44%), $102M (136%), and $8M (15%).
Other notes: - Market share recovery is attributed to The Londoner Phase 2 and new promotions, with further EBITDA growth expected amid industry expansion. - Short-term EBITDA is projected at $2.7–2.8 billion. - Recent VIP growth stems from high-roller activity and improved liquidity. The group has resumed junket operations, though margins remain low (12–15% of gaming revenue). - Side-bet participation is rising, positively impacting win rates. - Smart tables are fully deployed in mass gaming, with VIP installations ongoing. - The group repurchased $340 million in shares, raising its stake to 74.76%.
Risks: Macro uncertainty, weaker-than-expected Macau visitation, underperformance of The Londoner, and regulatory risks.