LVS owns and runs Venetian Resort Casino, Sands Expo Convention Center, Palazzo Resort Hotel in Las-Vegas, and the Venetian Macao Resort Hotel, Sands Macao Casino, Four Seasons Macao in Macao, China. LVS also opened Casino Resort in Bethlehem, Pennsylvania. It has been developing casinos since May 2009 in the resort area of Singapore. In November 2009, LVS's Macao subsidiary acquired a shareholding in Sands China Ltd. Now LVS holds 70.3% outstanding shares in Sands China.
Las-Vegas-based Venetian Casino Resort includes about 4,027 luxury rooms and a gambling area of about 120,000 sq. ft. in a covered retail complex.
In Macao, China, LVS is one of the three casinos licensed by the state to carry out gambling operations. Macao is a special administrative area of China for this kind of activity. In August 2007 the company opened Venetian Macao Resort Hotel on the Cotai Strip. The casino includes a 39-floor luxurious hotel with over 2,900 suites. The casino covers the area of about 550,000 sq.ft., and includes about 15,000 sq.ft. for retail trade and restaurants. The casino's area also includes a conference center of about 1.2 ml. sq.ft. In August 2008 LVS Four Seasons was opened in Macao. It includes 70,000 sq.ft. of gambling areas, 360 luxury rooms, and a trading area of 211,000 sq.ft. It should be suggested that future growth of LVS will significantly depend on completion of a number of projects in Asia. LVS already submitted development plans to Macao government for six integrated resort complexes that will include restaurants, hotels, conference halls, salons, trading centers, casinos. LVS has plans to pursue its real estate business in the island of Hengqin near Macao.
Currently the company is developing a casino project of Marina Bay Sands in Singapore. Besides, LVS is now building a tall condominium. The project takes up about 1 mln. sq.ft. and is situated in Las-Vegas. The company's success greatly depends on property sales for timely repayment of construction loans. LVS finished an IPO of ordinary shares in December 2004.
Investment idea:
The company's revenue growth is 5% above the average figure for the sector. The company's earnings significantly grew in the last quarter. We believe this tendency can keep on.
Net growth rate of earnings in the last reporting quarter and as compared to last year's quarter is significantly above S&P earnings growth. Net operating cash flow grew sizably (by 86.74%). Cash growth rates are 16.77% above the sector's figures. Analysts systematically underrate the company.
However, the net profit margin falls behind the average figure for the sector. The company is in the services sector, kind of a defensive one. We believe its shares can demonstrate good growth if the world continues a recovery trend. Given FED's policy and its impact on the livening of the mortgage market, a strong growth of share prices can be expected since the bulk of the company's earnings depends on real estate sales and currently it has launched a number of construction projects for different entertainment complexes, especially in Asia. The company can generate good profits after the mortgage market livens up.
It should be remembered that a significant part of the company's earnings are derived from casinos. According to estimates, the company steadily makes money in a progressing tendency. If the macroeconomic situation improves, consumer trust and solvency will also provoke a growth of share prices.
Notably, share prices are within a certain consolidation area and did not fall during the period of increased market volatility. So, it is logical to create a long-term position from the fundamental level at $40. The company's fundamentals improved, but the share remained in a wide range. When entering aggressively at $40, the analytical stop-loss should be at $35 (-12.5%). Growth potential — $60 (+50%). RM = 4 to 1. Load 40% of your capital to minimize risks. This will make a 5% loss in case of a drawdown and a 20% profit at the target level.
The company's earnings and sales demonstrate confident growth. Its figures rapidly recovered since early 2009. It is estimated that the company's earnings will show a growth of 93% in Q3 2011 and 50% in Q4 2011.
Annual earnings show confident recovery since early 2009. The company's earnings are estimated to show a growth of 163% by end of the year and 27% by end of 2012.
The company's sales were not affected by the recession. We expect high growth rates of sales by end of this year. The company's sales will be 34% by end of the year and 20% by end of 2012.
Main financial figures of the company
P&L statement
Balance sheet
Cash flow statement
Department of Portfolio Investments at the .
