CICC has released a research report maintaining its Outperform rating on SANDS CHINA LTD (01928) with a target price of HK$13.50, corresponding to 9x 2026 EV/EBITDA, implying 19% upside from the current share price.
The company's adjusted property EBITDA for the third quarter of 2026 was US$529 million, in line with the Visible Alpha consensus estimate of US$538 million and the brokerage's forecast of US$528 million.
The brokerage attributes the company's performance primarily to an increase in total gaming revenue market share and a return of win rate to normal levels.
CICC maintains its EBITDA forecasts for the company for 2026 and 2027.
Key takeaways from CICC
Q3 2026 results in line with Visible Alpha consensus
SANDS CHINA LTD reported third-quarter 2026 results: net revenue of US$1.940 billion, up 2% year-on-year and 8% quarter-on-quarter, recovering to 92% of third-quarter 2019 levels; adjusted property EBITDA of US$529 million, down 12% year-on-year and up 23% quarter-on-quarter, recovering to 70% of third-quarter 2019 levels, in line with the Visible Alpha consensus estimate of US$538 million and the brokerage's forecast of US$528 million.
The brokerage believes the company's performance was mainly driven by an increase in total gaming revenue market share and a return of win rate to normal levels.
VIP and premium mass segments expected to remain under pressure
CICC expects that high-net-worth customers may reduce visit frequency due to the Middle East regional conflict, stricter cross-border tax scrutiny and capital market volatility, and the VIP and premium mass segments may continue to face pressure.
During the third quarter of 2026 and the October Golden Week holiday, per-capita spending by premium customers declined, and the brokerage expects premium business to weaken further in the near to medium term.
Fixed operating costs expected to be flat quarter-on-quarter in 2027
The brokerage expects fixed operating costs to be flat quarter-on-quarter in 2027 (excluding the impact of basic cost-of-living increases), supported by the company's suspension of staff recruitment during the gaming revenue slowdown.
Management is committed to increasing the company's market share while maintaining a prudent level of reinvestment; competitors have not significantly increased reinvestment in players, and the marketing rebate environment has eased.
Earnings forecast and valuation
CICC maintains its EBITDA forecasts for 2026 and 2027.
The company's current share price corresponds to 8x 2026 EV/EBITDA.
The brokerage maintains its Outperform rating with a target price of HK$13.50, corresponding to 9x 2026 EV/EBITDA, implying 19% upside from the current share price.
Risk factors
A slower-than-expected recovery; disruptions from construction projects; intensified competition may lead to market share loss.
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