Strong 1H results from Sands China


Sands China (NYSE:LVS) reports revenue grew 25% to $5.08B in the first half of the year, led by a strong performance from the Venetian Macau resort.

Revenue for the Sands Cotai Central casino increased 62% to $152.7M on a large jump in revenue per room.

The company's net profit rose 45.7% Y/Y to $1.37B during the period.

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Comments (19)
  • Howard Jay Klein
    , contributor
    Comments (872) | Send Message
     
    Where are all the caution flags raised by analysts now? Where are all the readers of blips who got down on the stock with their laundry list of so-called woes of the Macau market and shared their bearish commentaries with us? Probably trying to read the entrails of rabbits now for their next contrarian exegesis.
    As I have repeatedly told fellow readers for months re: Macau, Sands and Wynn:
    1. Never bet against Adelson or Wynn. They know what they're doing. And they know a lot about how the Macau market is engineered to a "fail safe" status.
    2.Fundamentals count. China is underserved with a handful of casinos serving a potential gaming populace of 250 million souls in the out years. The government will never bring down the hammer on the golden goose though it can get antsy.
    3. You don't buy a stock you buy a business. LVS has a sound, balanced business with a strong foot in Macau and a steady foot in Vegas. Its well positioned to grow
    EBITDA and dividends going forward so investors can expect to be rewarded if they hang in. The trading range now is no refection to core value.
    4.LVS business model is very well positioned to compete for a Japan license. No guarantees of course. But should they prevail, you are looking at a very considerable upside very quickly. But that's beside the point. The central fact is that LVS has consistently outperformed simply because they are a sound, well managed company.
    18 Aug 2014, 07:58 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10270) | Send Message
     
    casino,,
    i could only hit the "like" button once for you comment ....

     

    excellent points and time to "connect the dots" on this story,

     

    Long LVS..
    18 Aug 2014, 08:44 AM Reply Like
  • Manny Cuaresma
    , contributor
    Comments (20) | Send Message
     
    Opportunity to buy LVS. With Macau.and Cotai leading the way and Las Vegas out of the hole, it's only fast tract from here. LVS is leading the way for a Japan opportunity. Their financial portfolio and dividend pay is highest in the industry.
    The stock price of less than $70 is a bargain and will sky rocket once they get the Japan market.
    18 Aug 2014, 09:13 AM Reply Like
  • Tai Yu
    , contributor
    Comments (1216) | Send Message
     
    If breakdown of the 1H '14 earning could be made to reveal Q2 earning, investors may see a huge deceleration in Q2 y/y growth. It is growing nevertheless against Q2 '13.

     

    LVS is currently under the curse of a 'descending triangle' technical pattern. OThe recent uptrend could be a deceptive 'pennant' pattern, ostensibly rising but smart money unloading.

     

    Medium to long term, LVS's prospect looks rosy yet there are better time to buy/accumulate.
    18 Aug 2014, 11:29 AM Reply Like
  • Robert Duval
    , contributor
    Comments (7852) | Send Message
     
    Short (NYSE:LVS) as part of a broader short portfolio.
    18 Aug 2014, 02:04 PM Reply Like
  • Tai Yu
    , contributor
    Comments (1216) | Send Message
     
    If good news comeback, LVS can break its recent high, upside is $19.33.

     

    LVS does have a strong support at $60 and downside is $8.95. Upside over downside ratio is 2.15. You may want to double check prior to shorting.
    18 Aug 2014, 02:37 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10270) | Send Message
     
    Tai,

     

    IF good news comes back ??,,, I suggest its here and never left,, except in the minds of a few ANALysts --:)

     

    , classic example of taking advantage of "noise" and getting paid to do it with a decent div. on a solid growth situation ..

     

    thanks for the tech analysis , interesting info ..
    18 Aug 2014, 02:42 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7852) | Send Message
     
    Tai,

     

    Growth is slowing on a very expensive stock with considerable debt. I also like the consensus on SA is overwhelmingly "buy the dip", but the stock refuses to rally and there is no large scale insider buying. One must ask, why not if the selloff is "irrational".

     

    Short LVS
    18 Aug 2014, 03:04 PM Reply Like
  • Tai Yu
    , contributor
    Comments (1216) | Send Message
     
    Sir Templeton says "invest at the point of maximum pessimism" and "if you want to have better performance than the crowd, you must do things different from the crowd".

     

    Assuming Templeton is right then long LVS today is a violation of the first statement as analysts have recently become less bearish.

     

    One may decide to short LVS to align action suggested by the second statement.

     

    Shorting LVS is in stark contrast with what the investment public intends to do - this is a contrarian strategy. Long in tandem with the market sentiment is usually less risky so long as you expeditiously execute loss cutting as you go wrong.

     

    Acting against the market could potentially be way profitable yet your understand of the stock and your judgement of timing have to be pretty close to perfection. One of the America's most famous trader is Jesse Livermore. He went bankrupt a couple times and I suspect he short the stocks at the wrong time.

     

    John Maynard Keynes says " market irrationality can stay longer than investor can stay solvent". There may be chance you have identified a genuine major problem in LVS, the stock price may stubbornly refuse to go down as you would like, may be substantially longer than you would like.

     

    Shorting a stock entails unlimited loss in exchange for a limited return. If you do have a compelling reason to short, try buying a put and you know exactly the limit your loss, if you are wrong.

     

    Whether or not a stock is cheap or dear depends on investors's perfection of its future earnings. Thanks to the advent of mobile devices, price sensitive information could be disseminated in no time to virtually the entire investment universe and they generally over react to the news, nasty or pleasant. The perceived value could change abruptly.

     

    KING has recently reported earning that is still growing pretty well on a y/y basis and its trailing PE is 3.1 times. It plunged 20% after the earning because of its guidance. DIS's trailing PE is 21.6 and saw a new record high price earlier today. Investors are enticed by its rosy prospect and DIS at current price levels are deemed fair and reasonable.
    18 Aug 2014, 04:54 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10270) | Send Message
     
    Tai,

     

    "analysts have recently become less bearish."

     

    i dont believe that is the case at all as many have just come out recently to proclaim the slowing growth in Macau and downgraded the entire sector .. ..

     

    In my view that is a temporary phenomenon and creates a good LT buying opportunity - the div is a nice addition and I might add the company has "surprised" in the past with special dividends ----a testament to their cash flow..

     

    one can pile on and short here when the stock appears weak, it 'may " be profitable or it may backfire in the short term. We will all soon find out. However when the dust clears LVS stock price will be MUCH higher down the road.. this is merely a pause in a good LT growth story.
    One only has to look at the last 3-4 conference calls transcripts and forget what the myopic analysts are parroting now to come to that conclusion .. 
    18 Aug 2014, 05:16 PM Reply Like
  • Robert Duval
    , contributor
    Comments (7852) | Send Message
     
    Tai,

     

    Not only that but every paper trading SA pundit sees a dip in a hot and popular stock and breathlessly proclaims this is THE dip to buy. Check out the many SA articles calling the selloff "irrational" and the market "wrong".

     

    Markets aren't wrong, and where are the insiders?

     

    RD
    18 Aug 2014, 05:38 PM Reply Like
  • Tai Yu
    , contributor
    Comments (1216) | Send Message
     
    Fear & Greed Trader,

     

    LVS in the US depicts an ugly technical chart yet 1928:HK is holding well, at least for the time being and I am neutral about LVS at this point in time.

     

    At the turn of the new millennium, the gaming industry in Macau got de-regulated and LVS was one of first American to tap the huge opportunity, he is visionary were seeing huge potential market that most did not see. As an early bird, he was able to make a lot money that naysayers could only admire.

     

    Another aspect that he sets himself apart from also rans is his ability to realize the mass market could be more lucrative when competitors when others have chosen to think otherwise. If one is to invest in the gaming industry, one's priority should be in the leader - LVS or via its subsidiary 1928:HK.

     

    Chinese by nature like gambling and China's priority in politics is in internal stability. For many decades, Macau has been relying almost solely on casinos and the associated entertainment industry for economic well being. The last thing China wants to see is casinos seeking 'chapter 11' protection. That casinos would continue to thrive in future is almost a certainty and the only uncertainty is timing. Medium to short-term, China is running high profile anti-graft program that would include stamping out money laundry activities and this shorter term objective may trump the long term strategy. The negative impact is is inevitable yet it would not be a sustained event.

     

    On the subject of corruption Hong Kong an ex British Colony, prior to the creation of ICAC in the 70s, was as corrupted as one could image. Hong Kong has lot less corruption today and the agency met huge objection prosecuting government servants and and business a
    Ike at the beginning The change has been painful yet the pay-off is great.

     

    I am monitoring the changes to LVS and its charts like a hawk.
    18 Aug 2014, 06:07 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10270) | Send Message
     
    Tai

     

    i agree the technicals are not pretty here , and will add it is always difficult to call a bottom here..

     

    HOWEVER your statement regarding the recent anti graft money laundering program says it all

     

    "The negative impact is inevitable yet it would not be a sustained event."

     

    I also believe its a short term negative, INVSTORS looking pas this short term 'NOISE " will be rewarded ,, and i might add we have yet to see what Japan has to say about the acceptance of gambling. All indications are that if this happens LVS will be the first boots on the ground there , just like they were in Macau ..

     

    short term momentum can pile on and play whatever side they wish , this LT story is just beginning and THAT is what I am INVESTING for ..

     

    thanks for all of your info :)

     

    please feel free to keep me updated with your opinion here

     

    http://seekingalpha.co...
    18 Aug 2014, 06:38 PM Reply Like
  • lvmpel
    , contributor
    Comments (25) | Send Message
     
    Japan possibly is the catalyst being ignored. Singapore is never mentioned. Las Vegas offers very desireable (better than MGM properties) more affordable than Wynn (arguably better than Wynn). Who knows the outcome but i'll collect my dividend (possibly special dividends) and wait. Long LVS.
    18 Aug 2014, 08:19 PM Reply Like
  • Tai Yu
    , contributor
    Comments (1216) | Send Message
     
    A lot of discussion has been going on how bleak LVS prospect could be. Let me come up with the following rosy scenario.

     

    Owing to, in part, to the hefty cost building resorts in Macau, EPS growth began to spike as recently as 4Q '12 when EPS growth y/y was 35.9%. These were followed sequentially by 13.1%, 120.7%,81.0%, 32.1%, 37.7% and the latest 29.7%. By disregarding the outlier 13.1% and assume the further slowdown in Macau could be arrested within yr 2014, EPS growth in the next 52 weeks could expand by 30%.

     

    LVS's ttm EPS is $3.24 and the projected EPS 12 months from now will be $3.24 X 130% or $4.2. The current PE multiple is 21.27 times. In early '13, LVS enjoyed a more lofty trailing PE of 30 times. If investors' sentiment could be restored to the early '13 level, expected price may rise to $4.2 X 30 or $126, a far cry from today's closing of $68.9.

     

    Nor is this target price that crazy. Prior to the recent recession, LVS had its highest earning of $1.24 in year '06, LVS had a peak price of $148.76 in '07 that corresponds to a trailing PE of 119. If LVS could enjoy a trailing PE of one third of its previous record, its 'fair' price right now should read $3.24 X 40 or a delightful price of $129.

     

    I believe 'Fear & Greedy Trader' is our friend's pseudonym. The name might remind us how investors could become the victims of these sentiments. Investors should opt to be greedy when most people are fearful and act contrarily again as the market sentiment swings to the other end of the spectrum.

     

    There are sufficient discussion on possible catalysts that will trigger an abrupt change in LVS's perceived value.
    18 Aug 2014, 09:12 PM Reply Like
  • Tai Yu
    , contributor
    Comments (1216) | Send Message
     
    A lot of discussion has been going on how bleak LVS prospect could be. Let me come up with the following rosy scenario.

     

    Owing to, in part, to the hefty cost building resorts in Macau, EPS growth began to spike as recently as 4Q '12 when EPS growth y/y was 35.9%. These were followed sequentially by 13.1%, 120.7%,81.0%, 32.1%, 37.7% and the latest 29.7%. By disregarding the outlier 13.1% and assume the further slowdown in Macau could be arrested within yr 2014, EPS growth in the next 52 weeks could expand by 30%.

     

    LVS's ttm EPS is $3.24 and the projected EPS 12 months from now will be $3.24 X 130% or $4.2. The current PE multiple is 21.27 times. In early '13, LVS enjoyed a more lofty trailing PE of 30 times. If investors' sentiment could be restored to the early '13 level, expected price may rise to $4.2 X 30 or $126, a far cry from today's closing of $68.9.

     

    Nor is this target price that crazy. Prior to the recent recession, LVS had its highest earning of $1.24 in year '06, LVS had a peak price of $148.76 in '07 that corresponds to a trailing PE of 119. If LVS could enjoy a trailing PE of one third of its previous record, its 'fair' price right now should read $3.24 X 40 or a delightful price of $129.

     

    I believe 'Fear & Greedy Trader' is our friend's pseudonym. The name might remind us how investors could become the victims of these sentiments. Investors should opt to be greedy when most people are fearful and act contrarily again as the market sentiment swings to the other end of the spectrum.

     

    There are sufficient discussion on possible catalysts that will trigger an abrupt change in LVS's perceived value.
    18 Aug 2014, 09:12 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10270) | Send Message
     
    Tai,

     

    and i will add that all of those fundamentals are ignored by the short term momentum traders that like to 'gamble" long or short-- instead of Invest.

     

    My SA moniker implies that I like to take advantage of the "fear" cycles that the market presents , and move on when the greed cycle is present .. In my view the "fear" cycle is present here with (NYSE:LVS) .. the 'greed"cycle is in the eyes of the "shorts" as they 'think" they see blood in the streets.

     

    If an investor is TRULY contrarian in nature they would be investing here and not shunning the shares at these levels..

     

    it will be nice to revisit this situation at the end of the year and see how many are still "short" ...
    18 Aug 2014, 09:26 PM Reply Like
  • Tai Yu
    , contributor
    Comments (1216) | Send Message
     
    Galaxy Ent (27:HK) reports half yearly earning. Rev growth in Q1 33.0% and 16.7% in Q2 . EBIDA are correspondingly 35.7% and 16.7%. 27:HK does not report EPS in Q1 and EBIDA used as proxy for EPS.

     

    27:HK is 1928:HK 's strongest competitor in Macau.

     

    1928:HK's corresponding metrics are 34.8% and 14.8% for revenue, 65.5% and 27% for EPS.

     

    LVS's corresponding figures are 21.4% and 11.7% for revenue, 37.7% and 29.7% for EPS.

     

    My observations are:
    1) 1928:HK performs significantly better than its major competitor, its ability to growing earning faster than revenue does is in particular impressive.
    2) LVS's earning is holding up even better in the slower Q2. I believe as the rich stay away from Macau because of the anti-graft activities there, they may go elsewhere that include Las Vegas. I suspect LVS will show these people with deep pockets the alternative resorts.
    3) Smoking is banned in Macau since May this year. Many Mainlanders are chain smokers and restriction could be revenue negative. Another reason that less gamblers will stay away would be the World Cup.
    4) unless fresh bad news keep calming, the existing bad news would become less pronounced as people get used to them.

     

    Whar could probably hint a reversal is the technical.

     

    1928:HK bounced, on Aug 8, from a triple low pattern on low volume. This might indicate a deceptive bearish 'flag' pattern. Earlier today, the stock rose another 2.07% on volume twice that on Monday. Bullish X to the Stochastic occurred on Aug 15 within the o/s zone. DMI too had a bullish X yesterday. There is fairly ua good chance a new uptrend has begun.

     

    A confirmation of my premise may come from a similar technical pattern of 27:HK, whose volume spike is even more spectacular; 3 times that on Monday.

     

    I could still be wrong, so rather than accumulating LVS per se, I have acquired leap contracts expiring jan 17 '15. Its price is down 3.3% from my morning purchase though.
    19 Aug 2014, 11:11 AM Reply Like
  • freeman8201
    , contributor
    Comments (827) | Send Message
     
    Recently, Macau's GDP surpassed Switzerland.
    I'm long (NYSE:LVS)
    19 Aug 2014, 06:37 PM Reply Like
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