BofA Merrill Lynch raised its target price for Sands China (01928) to HK$60.5 from HK$47.5 on target multiple and rollover, and retained its "buy" rating.
It also raised its 2013/14/15 EBITDA estimates by 4%, 7% & 9% respectively on the back of recent strong market trend. The house also sees potential for Sands to return more capital to shareholders, making a stronger case for re-rating.
Sands will announce its 3Q results on 18 October. Macquarie expects it to have the strongest sequential growth in EBITDA among the six major operators in Macau. We estimate 3Q adjusted property EBITDA to be US$744mn (+53% YoY, +14% QoQ) thanks to its 9,000 hotel rooms in Cotai (+65% which puts Sands China in the best position to capture heavy traffic to Cotai during summer time.
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