Sands China Seen to Get Boost From New Casino Tables

Sands China Ltd. (1928), the Macau casino operator controlled by billionaire Sheldon Adelson, could get a revenue and profit boost after receiving government approval this month for 200 more gaming tables.

The gambling company may get about $500 million in added revenue annually from the new tables, CLSA Ltd. analyst Aaron Fischer said via e-mail. It would get an additional $200 million of Ebitda, or earnings before interest, taxes, depreciation and amortization each year, he said.

Sands China has joined rivals such as Galaxy Entertainment Group Ltd. (27) in expanding on Macau’s popular Cotai strip, a piece of reclaimed land that is Asia’s equivalent of the Las Vegas strip. Sands plans to invest at least $2.5 billion to build The Parisian, its fifth resort in Macau.

Sands China Chief Executive Officer Edward Tracy confirmed the company received approval for the new tables in a press conference yesterday. Some of the new tables will be added ahead of the Chinese New Year holiday that starts Feb. 10, he said.

Sands China gained 1.6 percent to HK$38.15 in Hong Kong trading, boosting its advance this month to 12 percent. While that beats the Hang Seng Index’s 4.4 percent gain, it’s lower than the 26 percent jump for MGM China Holdings Ltd. and the 22 percent surge for Melco Crown Entertainment Ltd.

Market Share

The increase in tables will mean Sands China will have about 26 percent of casino tables in Macau, David Bain, an analyst at Sterne, Agee & Leach Inc. who recommends buying the stock, said in a research note.

Billionaire Stanley Ho’s SJM Holdings Ltd. (880) has the highest market share by revenue among Macau’s six casino operators this month, at 26.2 percent, with Sands China ranked second at 19.6 percent, according to Bain’s estimates.

Macau casino revenue rose 20 percent to a record of 28.2 billion patacas ($3.5 billion) last month, as Christmas promotions drew more holiday-makers to the only city in China where casino gambling is legal. Full-year casino revenue increased 14 percent to 304 billion patacas, also a record.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net

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