Goldman Sachs slightly lowered the target price for Sands China to HKD 23.2, with fourth-quarter performance slightly below expectations

Goldman Sachs research report indicates that Sands China (01928.HK) fourth-quarter performance slightly missed expectations, with adjusted EBITDA rising 1% quarter-on-quarter to USD 608 million, lower than the market expectation of USD 610 million to USD 640 million. If the VIP room win rate is adjusted from 3.9% back to the theoretical value of 3.3%, EBITDA will decrease by USD 26 million to USD 582 million, representing a quarter-on-quarter decline of 3% or a year-on-year increase of 2%.

Looking ahead to 2026, management remains relatively optimistic about the prospects of the Macau gaming industry and does not believe that the World Cup will have a significant impact on total gaming revenue. The bank forecasts EBITDA profit margins for 2026 and 2027 to be 31% and 31.4%, respectively, with corresponding property EBITDA of USD 2.5 billion and USD 2.7 billion, close to the company's mid-term target of USD 2.7 billion to USD 2.8 billion, but lower than the USD 3 billion level in 2019.

Considering the lower EBITDA profit margins, the bank has lowered its EBITDA forecasts for 2026 to 2027 by 4% to 5%, with the target price reduced from HKD 24.2 to HKD 23.2. As there are no major capital expenditures expected in the coming years, the group is likely to continue increasing dividends; rating is "Buy."