Sands China recently applied to extend its loan facility, but when the loan was originally applied for, it was meant to “significantly reduce” interest expenses and strengthen financial stability. It appears that very strong financial stability is in the forecast according to a report by Macquarie Securities Research.
According to the report by Macquarie Securities Research, Sands China casinos have “mass market” appeal, which will boost the company’s stock in the coming months.
As CNBC reports, Macquarie has since raised its 12-month price target on Sands China’s stock to HK$30.30 — which marks nearly 40 percent upside from its current trading price of Hk$21.80.
The report by Macquarie cited a recent survey conducted which found 42 percent of 2,000 respondents choosing Sands’ The Venetian as their “preferred” casino. Well behind in a very distant second place was Galaxy Entertainment’s Grand Lisboa casino, with just 15 percent of votes.
The high expectations stem from the fact that Macquarie believes the market has yet to price in “the strength of Venetian’s brand” and it takes into account that Sands China’s fortunes should get a boost when its third casino, the so-called Site 5 in the Cotai Strip, opens next year.
“The Venetian has the strongest brand in Macau and is the preferred casino to visit,” Macquarie stated in a report. “It showed that The Venetian attracts players with better demographics relative to its peers, namely a younger ‘white collar’ crowd with a higher gaming and non-gaming budget.” -CNBC
