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Las Vegas Sands Corp LVS

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Morningstar’s Analysis

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Government Regulators Deal Macao Operators a Good Hand; Las Vegas Sands and Wynn Shares Attractive

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

Our long-held view that all six existing Macao gaming licenses would be renewed by the June 22 expiration date was confirmed by the Chinese government on Jan. 14, removing an overhang for Las Vegas Sands and Wynn, whose shares were up by low double digits and high single digits, respectively. Additionally, no additional licenses will be awarded, matching our ongoing stance. The gaming licenses will be renewed for a 10-year period (with the possibility for a three-year extension), also in line with our thinking. While operators will need to notify the government of any capital distributions, there is no restriction on the activity (as modeled), which had been a concern in the market. Overall, this supports the regulatory intangible asset advantage--the source of their narrow moats--for Las Vegas Sands and Wynn.

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Company Profile

Business Description

Las Vegas Sands is the world's largest operator of fully integrated resorts, featuring casino, hotel, entertainment, food and beverage, retail, and convention center operations. The company owns the Venetian Macao, Sands Macao, Londoner, Four Seasons Hotel Macao, and Parisian in Macao, the Marina Bay Sands resort in Singapore, and the Venetian and Palazzo Las Vegas in the U.S. (which it plans to sell to Apollo and VICI for $6.25 billion in early 2022). We expect Sands to open a fourth tower in Singapore in 2025. After the sale of its Vegas assets, the company will generate all its EBITDA from Asia, with its casino operations generating the majority of sales.

Contact
3355 Las Vegas Boulevard South
Las Vegas, NV, 89109
T +1 702 414-1000
Sector Consumer Cyclical
Industry Resorts & Casinos
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 46,000

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