Core Viewpoint - Haitong International initiates coverage on Sands China (01928) with an "Outperform" rating and a target price of HKD 25.6, highlighting the company's potential for profitability improvement and cash flow quality enhancement in the context of industry recovery [1] Group 1: Company Overview - Sands China operates approximately 1,680 gaming tables and around 3,700 slot machines, making it the largest among the six listed gaming companies in Macau [1] - The company benefits from its substantial mass market business, positioning it to be one of the first to gain from industry recovery and tourist influx [1] Group 2: Financial Projections - Revenue projections for Sands China from 2025 to 2027 are estimated at USD 7.395 billion, USD 7.907 billion, and USD 8.325 billion, reflecting year-on-year growth rates of 4.4%, 6.9%, and 5.3% respectively [2] - The projected gross gaming revenue for the same years is USD 7.034 billion, USD 7.471 billion, and USD 7.864 billion, with growth rates of 4.3%, 6.2%, and 5.3% [2] - Adjusted property EBITDA is forecasted to be USD 2.417 billion, USD 2.652 billion, and USD 2.841 billion, with adjusted property EBITDA margins of 32.7%, 33.5%, and 34.1% [2] Group 3: Market Position and Strategy - Sands China focuses on the mass market segment, targeting mid-to-high-end customers, which contributes to higher profit margins due to a favorable win rate [1] - The company has maintained the largest market share in Macau for several years, supported by its extensive gaming table and slot machine offerings [1] - The completion of renovations at The Londoner Macao in the second quarter has led to an adjusted EBITDA margin recovery to 31.9%, with expectations for continued improvement in overall profitability [1]

Group 1 - The core viewpoint of the report is that Sands China (01928) is rated "Outperform" with a target price of HKD 25.6, benefiting from the recovery of the Macau gaming industry and its strong market position [1] - Sands China operates approximately 1,680 gaming tables and around 3,700 slot machines, making it the largest among the six listed gaming companies in Macau [1] - The company focuses on the mass market segment, targeting mid-to-high-end customers, which contributes to higher profitability due to a high win rate in the mass market [1] Group 2 - Sands China's adjusted EBITDA margin has rebounded to 31.9% following the completion of renovations at The Londoner Macao in the second quarter, with expectations for continued improvement [1] - Revenue projections for Sands China from 2025 to 2027 are estimated at USD 7.395 billion, USD 7.907 billion, and USD 8.325 billion, reflecting year-on-year growth rates of 4.4%, 6.9%, and 5.3% respectively [2] - The forecasted gross gaming revenue for the same period is USD 7.034 billion, USD 7.471 billion, and USD 7.864 billion, with growth rates of 4.3%, 6.2%, and 5.3% [2]