HSBC Global Research maintained its target price for Sands China (01928) unchanged at HK$44.5 but upgraded its rating to "buy" from "hold".
The research house said the VIP segment could face more challenges in the near term, but
the fundamentals of the high-margin mass segment remain intact. Even though the new capacity will continue to ramp up and Sands could see mid-term disruption from renovation work, as the biggest Cotai operator focusing on the mass business, HSBC believes Sands is still best positioned to capture the defensive growth.
HSBC believes valuation is undemanding at 12x FY2019 EV/EBITDA. After the recent correction, the share price should find support especially in the current volatile market given the 6% FY2019 forecast dividend yield.
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