Haitong International has released a research report maintaining an "Outperform" rating on Sands China Ltd (01928). The firm forecasts the company's net revenue for 2026-2027 to be $7,937 million/$8,363 million, representing year-on-year growth of 6.2%/5.4%, with gross gaming revenue of $7,652 million/$8,082 million, up 6.6%/5.6% year-on-year. Adjusted property EBITDA is projected at $2,483 million/$2,643 million (previously $2,601 million/$2,784 million), with adjusted property EBITDA margins of 31.3%/31.6%. The company has maintained its leading market share in Macau for many years and possesses the largest-scale casinos and convention centers. The firm applies a 2026E EV/EBITDA multiple of 12x (previously 12.5x), corresponding to a market capitalization of HKD 180.4 billion and a target price of HKD 22.3. The main points from Haitong International are as follows: LVS announced Sands China's Q4 2025 results, with the company achieving net revenue of $2.058 billion, a 16.2% year-on-year increase; adjusted property EBITDA reached $608 million, up 6.5% year-on-year, resulting in an adjusted property EBITDA margin of 29.5%. Overall, the company's Q4 2025 net revenue met market expectations, but adjusted property EBITDA fell short of expectations. Performance varied across the company's properties, with The Venetian and The Plaza showing both year-on-year and sequential improvement in net revenue. The company achieved net revenue of $2.058 billion, a 16.2% year-on-year increase. Gaming and non-gaming segments contributed $1.54 billion and $520 million, respectively, up +17.1% and +13.5% year-on-year. By property, net revenue for The Venetian/The Londoner/The Parisian/The Plaza/Sands was $750 million/$700 million/$230 million/$260 million/$80 million, with year-on-year changes of +10.3%/+34.9%/+2.2%/+18.4%/-11.6%. Performance at The Parisian and Sands remained weak, while The Venetian and The Plaza saw both year-on-year and sequential growth in net revenue. The company's gross gaming revenue showed strong growth, with a shift in customer mix towards VIP and premium mass segments. Gross gaming revenue reached $2.02 billion, a significant 23.1% year-on-year increase, surpassing the industry's growth rate (15%), and a 9.9% sequential increase. VIP, mass market, and slot machine gross gaming revenue were $280 million, $1.54 billion, and $200 million, respectively, with year-on-year changes of +155.8%, +12.8%, and +20.4%. Within the mass market segment, base mass and premium mass gross gaming revenue were $751 million and $791 million, respectively, with year-on-year changes of +11.9% and +13.8%, and sequential changes of -0.4% and +1.9%. The firm believes the increase in gross gaming revenue was primarily driven by growth in VIP and premium mass segments, coupled with a higher-than-usual net win rate. The actual net win rate for Q4 2025 was 3.92%, compared to 2.45% in Q4 2024, with a normalized net win rate of 3.3%. A combination of business mix changes and rising operational costs led to a decline in the adjusted EBITDA margin, falling below market expectations. Adjusted property EBITDA reached $608 million, up 6.5% year-on-year and 1.2% sequentially, resulting in an adjusted property EBITDA margin of 29.5%. This represents a decrease of 2.7 percentage points year-on-year and 2.0 percentage points sequentially, marking the lowest quarterly margin since 2024. By property, adjusted property EBITDA for The Venetian/The Londoner/The Parisian/The Plaza/Sands was $240 million/$200 million/$60 million/$100 million/$4 million, with year-on-year changes of -3%/+40%/-20%/+19%/-80%. The corresponding adjusted property EBITDA margins were 32.3%/28.8%/23.6%/37.5%/5.3%, changing by -4.4/+1.0/-6.7/+0.3/-18.0 percentage points year-on-year, respectively. The firm attributes the decline in the Q4 2025 adjusted EBITDA margin to two main factors: 1) a decrease in the proportion of the high-margin mass market business, with the lower-margin VIP and premium mass segments growing faster than the mass market segment; and 2) increased operational costs in the fourth quarter due to factors such as NBA events and higher payroll expenses (resulting from extended table game service hours). The company's market share increased both year-on-year and sequentially. Its market share in Q4 2025 was 24.4%, up 0.7 percentage points from 23.7% in Q3 2025 and up 1.4 percentage points from 23% in Q4 2024. Specifically, market share in the mass market and slot machine segments was 25.2%, a slight decrease of 0.1 percentage points from 25.3% in Q3 2025. Risk factors include macroeconomic growth falling below expectations, potential tightening of Macau's gaming regulatory policies, and intensifying competition in overseas gaming markets.