Las Vegas Sands Stable on Asian Ground; Expected Success Over Next 5 Years

Las Vegas Sands (LVS) records some modest results in the domestic ground, but it is running very good overseas. The third quarter of the year comes with a 3.6% decline in revenues and net income decrease by 6.6%. Despite having a small reduction in profit, the company has a perspective future in the east.

According to the Bernstein report, LVS is very successful in Macau and Singapore and the operation will run smoothly in the next five years. Three Bernstein analysts, Vitaly Umansky, Eunice Lee and Kelsey Zhu, noted that brand is “principally an Asian gaming company” giving that 90% of revenues come from Asian ground.

Official Statement

Bernstein analysts released the announcement:

“In Macau, Sands controls approximately one-third of the hotel room inventory. With Macau gaming being a supply-driven (and hotel room supply constrained) market, Sands has developed a strong foothold in the mass market segment.

“In the past, while Sands China has had quantity in rooms, it has fallen short of having competitively high-quality rooms and high-end suites (compared to some other operators).

“However, Sands is now not only adding capacity, but also redeveloping/upscaling its properties. When the redevelopment is complete, Sands will stand to benefit from the expected growth in the premium mass gaming segment in Macau.”

Other LVS Facilities

LVS runs several venues in the Asian region. One of them is Sands China which supervises China's activity. Another immense property is Sands Cotai Central located in Macau which has recently been converted into The Londoner Macau and now offers 600 suites.

Sheldon Adelson's company has good connections in Singapore ground where it plans huge investment with Genting Singapore. Both companies agreed on a $3,3 billion project which will further expand the LVS position.

Bernstein analysts further noticed:

“While Sands will see virtually no increase in net rooms, the redevelopment of Sands Cotai Central and the opening of the Four Seasons Tower Suites will significantly increase Sands’ product offering to better appeal to premium customers.”

Conclusion

The company has always been considered for the Integrated Resort license in Japan. The company has just revealed that the price of $10 billion will be an obvious obstacle for IR inclusion. LVS president and chief operating officer, Rob Goldstein, observed:

“No matter how good you are at this business, that must give you pause to stop and think, ‘Is that prudent? Can you deploy, can you get the return?“

Source:

“Las Vegas Sands expected to keep Asian domination for at least 5 years“, Erik Gibbs, calvinayre.com, November 1, 2019.