[ET Net News Agency, 10 June 2020] Morgan Stanley raised its target price for Sands
China (01928) to HK$35 from HK$33 and maintained its "equal-weight" rating.
The research house said the change in target price was due to pegging valuation to 2022
FCFE (free cash flow to equity). For 2020, Morgan cut its estimates for GGR, mass revenue
and net revenue by 21%, 23%, and 16%. This also drove its 2020 EBITDA to be 41% lower. Its
estimates for 2021 and 2022 on Sands were largely unchanged.
Morgan believes Sands' strong cash flows can sustain a dividend yield of 5-6%. The
balance sheet remains strong at above 1x net debt/EBITDA. However, it missed the committed
DPS in 2019, which may erode its valuation premium. (KL)