LVS, or Las Vegas Sands, recently announced it is about to increase its different holdings in its Sands China Unit, the operator of 5 integrated resorts in Macau.
The gaming company based in Las Vegas said that through a holding company called Venetian Venture Development Intermediate II, it is buying Sands China equity worth $24.31 million in a regulatory filing.
The filing says, “For illustration purposes, based on the closing price of HK$20.20 per Share as quoted on The Stock Exchange of Hong Kong Limited on the date of the Share Purchase Transaction, the Funding Amount equals the total price of approximately 96,600,247 Shares, representing approximately 1.19% of the total issued Shares.”
Depending on that, about 1.19% of Sands ownership of units in China rises from 70% to 71.19%
It Could Be A Smart Move By Sands:
Sands opting to increase its holdings in its business in Macau has happened at such a time that it can signal to different investors that the parent can see value in the shares of Sands China.
While Las Vegas Sands did not comment on how, as per the regulatory filing, Macau concessionaires’ shares are basically trading at absolutely rock-bottom variations, some analysts do believe that it is a cruel twist of fate due to the SAR’s (special administrative region) GGR (gross gaming revenue) figures have increased steadily this year.
However, as of Monday, shares of 5 of the 6 concessionaires, including Sands China, were actually saddled with a fall of 20% at the very least since 1st Jan, a week before the SAP reopening post the strict COVID restrictions on travel. Analysts from JP Morgan talked about the same in a recently released report, “We understand valuations alone may not drive the stocks in this market, but we can’t help but think these stocks are oversold. At the current level of FCF yield … just the cash flow paying down debt should generate ~15% annual returns on equity for names such as MGM, Wynn, and Melco. We see great value in Macau names.”
Additional Reading:
Barsha Bhattacharya is a senior content writing executive. As a marketing enthusiast and professional for the past 4 years, writing is new to Barsha. And she is loving every bit of it. Her niches are marketing, lifestyle, wellness, travel and entertainment. Apart from writing, Barsha loves to travel, binge-watch, research conspiracy theories, Instagram and overthink.
