It looks to me as though Sands finished their Construction projects in Q1, Launched all of their promotional programs in Q2, and is realizing the impact of all of it in Q3.
Sands had barely put up a market share number over 22% before July, and now they're breaching 23%?
Normally, I'd say it could just be good table hold, but the 34% jump in patronage the month before suggests that that market share has a ton of patronage to back it up. The 34% is confirmation of the 23.1% to some degree.
If there is anything negative about what's going on in macau for Sands China right now, maybe somebody could point out just exactly what that is. Even the Typhoon didn't put a dent in the numbers given that Mr. Bain's channel checks are saying that August could be a SAR-wide record for gaming volumes.
We havn't seen a fiscal quarter start out like this since the quarter following the full launch of Marina Bay Sands...
... and a few months after that happened, LVS moved to a record high... by a substantial margin.
ABC reported that august market share came in at 23% for Sands, but I noticed that all of his figures were rounded off to the nearest whole percentage.
Given that channel checks had Sands at 22.9% in late august, I would go with that number vs the 23.1% that was tracking earlier in August. Still, it's confirmation of the 22.9% they put up in July, so that substantially lessens the possibility that it could be due to "luck".
Further, most reports I'm seeing is that the YOY improvement in overall gaming revenues for the SAR for august included a surge in VIP revenues. If that is the case, and if Sands held their own at close to 23% market share, then that says a lot for Sands execution given that their main emphasis is mass market, not VIP.
Remember that 19 refurbished VIP rooms at venetian were not yet complete in Q1. The re-deployment of those rooms could be driving some of the market share in august.
Average Sands market share in Q2 was 20.4%.
Average Sands market share so far in Q3 is 22.9%.
Granted, it could be due to good "luck" (eg: hold), but:
1. That's a 2.5% increase, Virginia.
2. When you remove the bad luck LVS had in Singapore in Q2, Macau's hold alone was close to normal when you reflect on that 20.4% reading.
3. The July patronage surge of 34% yoy confirms that the rising market share has traffic volumes behind it.
Great numbers Spok. Over the next 6 months, it's inevitable that Sands will hit 25% market share and replace SJM at the #1 position on a regular basis. Let's hope the Parisian is progressing problem-free. Looks like Versace and SJM are teaming up on a new Macau casino reported today.
I think 23 to 25% market share is possible in Q4, jr.
Given the continuous patronage shift from downtown to Cotai that we're seeing, I think SJM will continue to fade as Cotai market share builds.
Even once SJM opens out of Cotai, their resort is not that big, and it will be is a poor, off-strip location. It won't do much to help SJM stem it's declining market share.
The problem is until LVS can show or does increase EPS at a significant rate the market will not assign it a bigger multiple. If LVS earns 3.00 per share its trading at a 19 multiple, and growing EPS at a much lower rate then that. You still have the legal overhang, huge share count, china slowing theme etc. Thats what the market looks at, MOM GGR revenues don't move the stock anymore.
Unfortunately the market could care less about EBITDA as we know and since the companies revenue is highly dependent on disposable income and focused on leisure and travel a scare or situation that could limit either will affect the market negatively.
Ummm... I agree with your rationale that LVS needs significant EPS growth in order to grow the stock price... but you're confusing a "bigger multiple" with a stock price rise in your statement.
There is a difference between a stock that rises due to "P/E multiple expansion", whereas the price rises while EPS lags, and a stock that rises due to earnings momentum, which could mean that the stock rises in tandem with earnings and the P/E multiple remains "static".
Anyway, I get your point, and it's valid.
Here's what's important, however.
When sophisticated investors see the "precursers" for earnings growth expanding, but not earnings growth ITSELF, then it creates an opportunity to buy the stock ahead of those who would later react to a surge in earnings.
For example, right now, we're looking at: 1) SAR gaming growth; 2) Mass market gaming growth that's exceeding VIP (Sands is the mass market leader); 3) the 34% yoy growth in patronage at sands; 4) the surge in market share; 5) normalized earnings that significantly exceed raw, headline EPS.
If you're privvy to all of that, and the average retail investor is sitting around waiting for headline EPS to surge past 80 cents a quarter before he buys LVS, then you have an edge, IMO...
... which is why the stock is not moving significantly higher even though all but 2 analysts have a buy rating on LVS... and the 2 that don't have hold ratings... which is the best overall show of support among analysts in all of gaming.
THEY see the precursers of an EPS surge that the stock appears not to yet fully reflect.