Investment Rating - Buy rating maintained for Sands China Ltd (1928 HK) with a market price of HKD 23 5 [1] Core Views - Sands China's performance turned profitable in 2023, in line with expectations The company is still in the recovery phase and is expected to benefit significantly from the strong rebound in Macau's tourism and gaming industry [3] - The recovery trend is evident, with performance meeting expectations In 2023, Sands China's net profit reached USD 692 million, and adjusted EBITDA was USD 2 225 billion, with Q4 EBITDA at USD 654 million and a margin of 35 1%, recovering to 80 6% of the same period in 2019 [4] - The high-end mass market led the recovery, and non-gaming businesses showed significant improvement In 2023, Sands China's total net revenue was USD 6 53 billion, with gaming revenue accounting for 74% (USD 4 84 billion) and non-gaming revenue contributing 26% (USD 1 81 billion) [4] - Sands China is the leader in Macau's gaming industry, with the largest supply of gaming tables, hotels, and shopping malls The company is expected to continue benefiting from the industry's recovery in 2024 [4] Financial Performance and Forecasts - Revenue in 2023 was USD 6 534 billion, a 307% YoY increase, and is expected to grow to USD 8 82 billion in 2024, USD 9 492 billion in 2025, and USD 9 573 billion in 2026 [2][4] - Net profit in 2023 was USD 692 million, a 144% YoY increase, and is forecasted to reach USD 2 049 billion in 2024, USD 2 424 billion in 2025, and USD 2 575 billion in 2026 [2][4] - EPS in 2023 was USD 0 09, and is expected to grow to USD 0 25 in 2024, USD 0 30 in 2025, and USD 0 32 in 2026 [2][4] - ROE in 2023 was -17,300%, but is expected to recover to 100 2% in 2024, 54 2% in 2025, and 36 6% in 2026 [2][4] Industry Recovery - Macau's gaming gross revenue in 2023 was MOP 183 1 billion, recovering to 63% of 2019 levels Quarterly breakdown shows recovery rates of 45% in Q1, 62% in Q2, 69% in Q3, and 75% in Q4 [4] - Visitor arrivals to Macau in 2023 reached 28 21 million, recovering to 72% of 2019 levels Quarterly recovery rates were 48% in Q1, 68% in Q2, 84% in Q3, and 90% in Q4 [4] Business Segments - Gaming: High-end mass market recovery led the way, with mass market table games revenue at USD 1 42 billion in Q4 2023, recovering to 97% of 2019 levels High-end mass contributed USD 685 million (101% of 2019), while regular mass contributed USD 732 million (93% of 2019) Slot machine revenue was USD 163 million, recovering to 101% of 2019 levels VIP gaming revenue was USD 130 million, recovering to 24% of 2019 levels [4] - Non-gaming: Significant recovery in non-gaming businesses, with hotel occupancy reaching 97 2% and average room rate at USD 197 Retail revenue was USD 156 million, recovering to 96% of 2019 levels [4] Future Outlook - Sands China's parent company, LVS, is increasing investment in Macau, with the Londoner Phase 2 project starting in November 2023, with an investment increase from USD 1 billion to USD 1 2 billion This will further optimize Sands China's supply and enhance customer spending [4] - The parent company plans to reduce leverage in the future, preparing for the resumption of dividends [4]
金沙中国有限公司2023年年报点评：复苏趋势明显，收入接近疫前