[Zhenzhuo Institutional View] Sands China (01928.HK): Adjusted property EBITDA up 6%

$SANDS CHINA LTD(01928.HK) In the fourth quarter of 2025, total net revenue reached $2.05 billion, a year-on-year increase of 16.4%. However, adjusted property EBITDA was $608 million, up 6% year-on-year, but due to increased operating costs and a higher proportion of VIP business, the profit margin fell by 2.7 percentage points to 29.6%, underperforming market expectations. Quarterly net income was $213 million, down from $237 million in the same period last year.

In terms of property performance, The Londoner Macao performed the strongest, with net revenue reaching $699 million, a 35% year-on-year increase, mainly driven by growth after renovation works. The Parisian Macao also recorded an 18% revenue growth, with EBITDA up 19% year-on-year. Retail performance remained stable, with overall occupancy at the Cotai Shopping Center at 84.9%, while The Four Seasons Mall maintained 100% occupancy.

The company's core goal remains the pursuit of absolute EBITDA growth, with capital expenditure expected to remain at $400 million in 2026. With the upcoming full operation of The Londoner Phase 2 project, market expectations are that its market share will further increase. Despite risks such as industry competition and mainland regulatory challenges, management remains optimistic about Macau's long-term potential to transform into a world tourism and leisure hub and stated that dividends will be adjusted in line with cash flow growth.

Source: KGI Securities