Las Vegas Sands' Macao Sales Recovery More Certain as China Eases Its COVID-19 Policy

Although the pandemic continues to materially affect near-term demand in Macao (66% of 2019 EBITDA), we see headwinds subsiding as a result of China easing its COVID-19 policy in December 2022. We continue to think Las Vegas Sands and the gaming enclave are well positioned for long-term growth. Not only does Sands hold a dominant mass and nongaming position on the attractive Cotai Strip, but we think the company will reinvest proceeds from the $6.25 billion sale of its Vegas assets (closed in early 2022) in its Asian assets, strengthening the brand locally. Meanwhile, Sands' position in the profitable Singapore gaming market (34% of 2019 EBITDA), where a duopoly remains in place through 2030, is buoyed by the company expanding its presence with the renovation of its existing towers in 2022-23 and development of a fourth tower scheduled to open in 2026, solidifying our view of the firm's long-term growth.