Sands China shares rise on clearance for 200 more gaming tables
Macau casino operator cleared to add 200 tables, sparking 1.6 per cent rise in share price
Sands China shares rose 1.6 per cent yesterday after the casino operator said it had received government approval for 200 more gaming tables.
There was little change in the benchmark Hang Seng Index.
Some of the new gaming tables would be added before the Lunar New Year holiday, which starts on February 10, Sands China chief executive Edward Tracy said.
The Macau arm of gaming mogul Sheldon Adelson's Las Vegas Sands is the second-largest player in the world's No 1 gaming hub, with a market share by revenue of 19 per cent, after Stanley Ho Hung-sun's SJM, which has 27 per cent of the pie, Deutsche Bank estimated in a research note issued earlier this month.
Aaron Fischer, the head of consumer and gaming research at CLSA, said the government had been expected to issue more tables to Sands given the significant investment made in the Sands Cotai Central property.
"We estimate 200 tables can generate US$500 million [a year] in revenue and US$200 million in ebitda [earnings before interest, taxes, depreciation and amortisation], assuming a net win per table per day of US$7,000 and an ebitda margin of 40 per cent," Fischer said.
He does not expect the government to start approving a material number of new tables for concession holders ahead of any new major projects.
Sands China, which operates four major casinos in Macau, plans to invest at least US$2.5 billion in expanding its empire with a new resort called the Parisian.
The other major players, including Galaxy Entertainment and Wynn Macau, are also developing new facilities on the Cotai Strip, a piece of reclaimed land that is increasingly outshining the traditional gaming area on the Macau peninsula.
This week, Sands China announced the completion of the Sheraton Macau Hotel in Cotai Central's Earth Tower. The 2,067 new rooms and suites bring the total room count to 3,896, making it the largest hotel in Macau.
The company declared an interim dividend of 67 HK cents per share.
Macau's casino industry recorded gross gaming revenue of 304.1 billion patacas last year, up 13.5 per cent from 2011, according to official data.
Sands China shares closed 60 HK cents higher at HK$38.15 yesterday after trading between HK$37.50 and HK$38.25.