Sands China Ltd.

Sands China and its subsidiaries are principally engaged in the operation of casino games of chance or games of other forms, the development and operation of integrated resorts which contain not only gaming areas but also meeting space, convention and exhibition halls, retail and dining areas and entertainment venues and other ancillary services including ferry operations and other related operations in the Macao Special Administrative Region of the People's Republic of China.
  • Ticker599A
  • ISINKYG7800X1079
  • SectorTravel & Leisure
  • CountryCayman Islands
UOB
Ivy Xu Da ...
  • Robin Yuen

Sands China (1928 HK): 1Q20: Optimistic on a June revival. BUY

1Q20 results are in line with expectations, with a massive EBITDA write-off. However management has turned optimistic and is planning a June casino "restart" after observing pent-up demand from regulars and hearing rumours that IVS suspension and travel restrictions may be lifted by as early as mid-May. Maintain BUY on Sands. Target: HK$43.00. We remain MARKET WEIGHT on Macau gaming as the key concern is customers’ willingness to gamble rather their physical ability to travel, but the CGR situation can improve from the rock bottom of April.

UOB
Greater China Research Team

Strategy - Reassessing Impact Of COVID-19

With COVID-19 becoming a global pandemic, economic activities are unlikely to normalise by the end of May. Weak overseas demand would pose further challenges to Chinese corporates which are already hurting from a domestic slowdown. We reassess the fair values of our key stock picks in the best-, base- and worst-case scenarios, and highlight the stocks that are resilient during the pandemic, namely Ausnutria, Mindray, SHKP, Weichai and Tencent.

UOB
Ivy Xu Da ...
  • Robin Yuen

Macau Gaming - Recovery - A question of when

Macau stocks are without a doubt cheap at -1SD, having been battered as much as - 40% ytd but have somewhat rebounded (-28% ytd) in April. The key questions are when visitor arrivals would rebound and would gaming budgets increase proportionately? amidst growing unemployment and reduced global trade. Upgrade to MARKET WEIGHT as Macau has currently already reached the worst situation, though subsequent recovery may be protracted.

UOB
Ivy Xu Da ...
  • Robin Yuen

Macau Gaming - Impact of Wuhan coronavirus Harder and longer. Downgrade to UNDERWEIGHT.

Macau faces severe challenges as the coronavirus has brought casino operations to a grinding halt. We materially downgrade our GGR forecasts for 2020, and base our valuation off 2021 (discounted back today) as the market is treating nCov as one-off and values companies on normalised earnings. Downgrade the sector to UNDERWEIGHT as we believe it is too early to accumulate and prefer to wait until the situation stabilises.

SANDS CHINA LTD. with less fundamental stars is reduced to Neutral

SANDS CHINA LTD. (HK), a company active in the Gambling industry, loses a star(s) at the fundamental level and sees its general evaluation downgraded. The independent financial analyst theScreener just removed a fundamental star(s) for a 2 over 4-star rating. As such, market behaviour remains unchanged and is evaluated as moderately risky. theScreener believes that the loss of a star(s) merits downgrade to the general evaluation of the title, which passes to Neutral. As of the analysis date January 31, 2020, the closing price was HKD 38.00 and its expected value was estimated at HKD 41.01.

UOB
Ivy Xu Da ...
  • Robin Yuen

Sands China (1928 HK): 1Q20: Optimistic on a June revival. BUY

1Q20 results are in line with expectations, with a massive EBITDA write-off. However management has turned optimistic and is planning a June casino "restart" after observing pent-up demand from regulars and hearing rumours that IVS suspension and travel restrictions may be lifted by as early as mid-May. Maintain BUY on Sands. Target: HK$43.00. We remain MARKET WEIGHT on Macau gaming as the key concern is customers’ willingness to gamble rather their physical ability to travel, but the CGR situation can improve from the rock bottom of April.

UOB
Greater China Research Team

Strategy - Reassessing Impact Of COVID-19

With COVID-19 becoming a global pandemic, economic activities are unlikely to normalise by the end of May. Weak overseas demand would pose further challenges to Chinese corporates which are already hurting from a domestic slowdown. We reassess the fair values of our key stock picks in the best-, base- and worst-case scenarios, and highlight the stocks that are resilient during the pandemic, namely Ausnutria, Mindray, SHKP, Weichai and Tencent.

UOB
Ivy Xu Da ...
  • Robin Yuen

Macau Gaming - Recovery - A question of when

Macau stocks are without a doubt cheap at -1SD, having been battered as much as - 40% ytd but have somewhat rebounded (-28% ytd) in April. The key questions are when visitor arrivals would rebound and would gaming budgets increase proportionately? amidst growing unemployment and reduced global trade. Upgrade to MARKET WEIGHT as Macau has currently already reached the worst situation, though subsequent recovery may be protracted.

UOB
Ivy Xu Da ...
  • Robin Yuen

Macau Gaming - Impact of Wuhan coronavirus Harder and longer. Downgrade to UNDERWEIGHT.

Macau faces severe challenges as the coronavirus has brought casino operations to a grinding halt. We materially downgrade our GGR forecasts for 2020, and base our valuation off 2021 (discounted back today) as the market is treating nCov as one-off and values companies on normalised earnings. Downgrade the sector to UNDERWEIGHT as we believe it is too early to accumulate and prefer to wait until the situation stabilises.

UOB
Arandi Ariantara ...
  • Chaiwat Arsirawichai
  • Ivy Xu Da
  • Jonathan Koh
  • Kader Farhan Bin Kader Ridzwan
  • Keith Wee Teck Keong
  • Loke Pei Hao
  • Peerawat Dentananan
  • Robin Yuen
  • Tanaporn Visaruthaphong

Regional Morning Notes - Friday, January 31, 2020

GREATER CHINA Results Sands China (1928 HK/BUY/ HK$37.40/Target: HK$51.00): 4Q19: In line but outlook uncertain due to coronavirus. INDONESIA Small/Mid Cap Highlights Wilton Makmur Indonesia (SQMI IJ/NOT RATED/Rp284): High-grade gold operation, low valuation. MALAYSIA Results Bursa Malaysia (BURSA MK/HOLD/RM5.68/Target: RM5.64): 4Q19: Results in line; upgrade to HOLD as we believe the cautious market sentiment has largely been priced in. Update Gamuda (GAM MK/HOLD/RM4.00/Target: RM3.73): Light at the end of the tunnel, including the likelihood of receiving a formal toll takeover offer and s...

SANDS CHINA LTD. with less fundamental stars is reduced to Neutral

SANDS CHINA LTD. (HK), a company active in the Gambling industry, loses a star(s) at the fundamental level and sees its general evaluation downgraded. The independent financial analyst theScreener just removed a fundamental star(s) for a 2 over 4-star rating. As such, market behaviour remains unchanged and is evaluated as moderately risky. theScreener believes that the loss of a star(s) merits downgrade to the general evaluation of the title, which passes to Neutral. As of the analysis date January 31, 2020, the closing price was HKD 38.00 and its expected value was estimated at HKD 41.01.

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Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind each recommendation and reflect the fundamental and price data as of the last trading day of the week...

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