Sands' Near-Term Macao Investments Support Its Long-Term Regulatory Intangible Advantage

We expect Las Vegas Sands' Macao resorts (54% of 2023 EBITDA) will continue to see strong revenue growth in 2024 after China's removal of covid-19 restrictions in January of 2023. We also think Las Vegas Sands and the Macao gaming enclave are well positioned for long-term growth. Not only does Sands hold a dominant mass and nongaming position on the attractive Cotai Strip in Macao, but we think it will reinvest back into its assets within the region, strengthening the brand locally. To this point, Sands has recently completed $2.2 billion worth of investments in converting one of its Cotai properties to a London-based theme and upgrading its rooms at its Four Seasons resort. Futher, it will be investing another $1.2 billion in 2024 to renovate rooms at its Conrad and Sheraton locations and upgrade its Cotai arena facility. Meanwhile, Sands' position in the profitable Singapore gaming market (46% of 2023 EBITDA), where a duopoly remains in place through 2030, is buoyed by the company expanding its presence with the renovation of its existing towers in 2023-25 and eventual development of a fourth tower, which we think can open toward the end of 2028, solidifying our view of the firm's long-term growth.