HALISTER1: Sands China, Melco Cut at HSBC on Golden Week Disappointment

Sands China, Melco Cut at HSBC on Golden Week Disappointment

(Bloomberg) -- HSBC downgrades Macau gaming stocks as revenue during China’s Golden Week holiday likely fell short of strong expectations, analysts Charlene Liu and Alexis Yan write in note dated Monday.
  • Sands China Ltd., Melco International Development Ltd. downgraded to hold from buy, Wynn Macau Ltd. cut to reduce from hold
  • Expectations for Golden Week were “too high” and surge in VIP volume didn’t materialize; HSBC’s observations suggest modest to no growth in VIP volume; traffic on soft side, especially mid-week
    • “We did not see an overflowing main casino floor, nor did we see huge crowds at key tourist spots in Macau”
  • Disappointing holiday suggests consensus earnings upgrades less likely in near term
  • HSBC still has buy rating on Galaxy Entertainment Group Ltd., Melco Resorts & Entertainment Ltd. for undemanding valuations, strong operating trends and good supply pipelines
  • NOTE: BI Macau/China Gaming Market Competitive Peers +30% YTD vs HSI +29%
    • Wynn Macau trades at 53x PE, Melco Resorts at 35x, Sands China 29x, Galaxy 26x
To contact Bloomberg News staff for this story: Amanda Wang in Shanghai at twang234@bloomberg.net To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net Will Davies

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
27 HK (Galaxy Entertainment Group Ltd)
LVS US (Las Vegas Sands Corp)
2282 HK (MGM China Holdings Ltd)
MGM US (MGM Resorts International)
200 HK (Melco International Development Ltd)

People
Alexis Yan (HSBC Securities Asia Ltd)
Charlene Liu (HSBC Securities Asia Ltd)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283