JP Morgan expects Sands China to double its dividend to 1 yuan this year and gives it an "Overweight" rating

JP Morgan's research report pointed out that Sands China (01928.HK) performed below expectations in the last quarter of last year, with gross profit declining mainly due to business mix, underwhelming mid-game revenue performance, and rising operating costs. JP Morgan had already lowered its forecasts before the group's earnings release, thus only adjusting its future EBITDA forecast down by about 3%.

The bank believes that although Sands' stock price has fallen by 10% over the past month, underperforming the Hang Seng Index's 2% rise and the relatively stable prices of its peers, this reaction is indeed excessive. The weak performance in the fourth quarter of last year was mainly due to seasonal factors such as the NBA preseason and non-recurring factors like poor mid-game performance and the National Games. The bank still expects Sands China's market share to grow this year and anticipates that the annual dividend will double to HKD 1 per share starting this year, which at the current price implies a dividend yield of 5.4%. With a gradual increase in dividends, it is expected that the annual dividend could rise to over HKD 1.5 per share by 2028.

JP Morgan has given Sands China an "Overweight" rating, with the target price adjusted from HKD 23 to HKD 22