Sands China a “Buy” Says Citi, UBS
HONG KONG (Reuters) - Shares in Sands China (1928.HK) climbed as much as 6.3 percent to their highest level in more than two weeks after Citigroup and UBS initiated coverage on the Macau unit of U.S. casino operator Las Vegas Sands (LVS.N) with "buy" ratings.
Citigroup issued a target price of HK$12.50 on Sands China, saying that the company would benefit from its large exposure to the mass-market gambling segment in Macau and a strong presence on the Cotai strip. By 0308 GMT, the stock was up 5.1 percent at HK$9.94.
"Overall, we see SCL (Sands China Ltd) as having the most scope for expansion within the "managed-growth" constraints set by the Chinese government," said Citigroup analyst Anil Daswani in the report on Monday.
UBS also initiated coverage on the stock with a "buy" rating on Monday, a UBS spokesman said, declining to give more details.
Citigroup's Daswani forecast total revenue in Macau, the world's largest and fastest-growing gambling market, to grow by 8 percent in 2010 and 11 percent in 2011.
But he issued a "sell" recommendation on Wynn Macau (1128.HK), the Macau unit of Wynn Resorts (WYNN.O), citing the company's focus on VIP gamblers, which has lower margins than the mass market segment, and a lack of expansion plans on the Cotai strip.
By 0311 GMT, Wynn Macau was down 0.42 percent at HK$9.51
