Macau Gaming Revenue

Well Macau certainly peaked in May for gaming revenue. With Sands opening a new property next year, do you think it is a smart long term bet?


12 month sum Macau Gaming Revenue (billions of US dollars)
$15.4 Dec. 2009
$16.1 Jan. 2010
$16.8 Feb. 2010
$17.3 Mar. 2010
$18.1 Apr. 2010
$19.2 May. 2010
$19.8 Jun. 2010
$20.7 Jul. 2010
$21.3 Aug. 2010
$21.9 Sep. 2010
$22.7 Oct. 2010
$23.3 Nov. 2010
$24.3 Dec. 2010
$24.9 Jan. 2011
$25.7 Feb. 2011
$26.6 Mar. 2011
$27.4 Apr. 2011
$28.3 May. 2011
$29.2 Jun. 2011
$30.3 Jul. 2011
$31.4 Aug. 2011
$32.2 Sep. 2011
$33.2 Oct. 2011
$34.0 Nov. 2011
$34.6 Dec. 2011
$35.4 Jan. 2012
$36.0 Feb. 2012
$36.6 Mar. 2012
$37.2 Apr. 2012
$37.4 May. 2012
$37.7 Jun. 2012
$37.8 Jul. 2012
$38.0 Aug. 2012
$38.3 Sep. 2012
$38.4 Oct. 2012
$38.6 Nov. 2012
$39.2 Dec. 2012
$39.5 Jan. 2013
$39.8 Feb. 2013
$40.7 Mar. 2013
$41.1 Apr. 2013
$41.5 May. 2013
$42.2 Jun. 2013
$42.8 Jul. 2013
$43.4 Aug. 2013
$44.1 Sep. 2013
$45.2 Oct. 2013
$45.9 Nov. 2013
$46.5 Dec. 2013
$46.8 Jan. 2014
$48.2 Feb. 2014
$48.7 Mar. 2014
$49.1 Apr. 2014
$49.5 May. 2014 <==============
$49.3 Jun. 2014
$49.2 Jul. 2014
$49.0 Aug. 2014
$48.5 Sep. 2014
$47.4 Oct. 2014
$46.7 Nov. 2014
$45.4 Dec. 2014
$44.7 Jan. 2015

Long term seems up in the air to me with the gov't crackdown. I don't understand a lot of the details, but I'd be very uneasy if I had a big expensive plant over there. Can't just pick up and move a billion-dollar resort.

Quote: beachbumbabs

I don't understand a lot of the details...

Primarily they are cracking down on people circumventing currency controls. People regularly buy diamond watchs for says $100,000 and then sell them back to the same person for $90,000 . Both purchases are (if not legal) not easily traced, and result in having $90K available in Macau instead of the legal limit of $3100 .

Quote: beachbumbabs

I don't understand a lot of the details, but I'd be very uneasy if I had a big expensive plant over there. Can't just pick up and move a billion-dollar resort.

Macao gaming revenue dropped by 25% last quarter, and Sands Corporation Macau gaming revenue dropped by 20% . While serious, that is by no means enough that you talk about closing buildings. The resorts are incredibly profitable, and you can make up for the loss of revenue by dropping costs.
The EBITDA margins in Macao were the same as last year (usually over 30%) just on less revenue. EBITDA margins in Macao are still considerably higher than the Vegas properties. The bad quarter in Macao was somewhat offset by an insanely profitable quarter in Singapore.

The Parisian Macao, Sands fourth property at Cotai Strip Resorts Macao is expected to open in late 2015. It is to feature approximately 3,000 rooms and suites, gaming space, a retail mall, replica Eiffel Tower, MICE space, diverse food and beverage options, and entertainment. The total cost of the project is an estimated US$2.7 billion.

The three existing Cotai properties are:
1) THE VENETIAN MACAO
2) THE PLAZA MACAO (Four Seasons Hotel)
3) SANDS COTAI CENTRAL

The SANDS MACAO was the original property built at the site of the ferry crossing from Hong Kong. Revenue is dropping, but not significant improvements have been made to the property in seven years. It is what passes as Sands "low rent" Asian property.

Fears of the market crash in Macao have driven Sands stock down from $87.81 on March 6, 2014 down to as low as $52 and currently around $56.

Yet Sands improved it's EBITDA by 13.8 % this year, and despite the massive drop in gaming revenue in Macao the corporation improved EBIDTA by 10.9% in the 4th quarter (mostly because of record EBITDA in Singapore).

The market may have over-reacted and Sands may prove a good long term investment..