Sands China (SCHYY) AI Stock Analysis

• Market Cap: $19.47B
• Dividend Yield: 2.21%
• Average Volume (3M): 458.00
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.70
• Revenue Growth: -2.90%
• EPS Growth: -13.46%
• Country: US
• Employees: 27,064
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 0.51
• Shares Outstanding: 809,337,950
• 10 Day Avg. Volume: 1,011
• 30 Day Avg. Volume: 458
• PEG Ratio: 0.40
• Price to Book (P/B): 21.14
• Price to Sales (P/S): 3.08
• P/FCF Ratio: 18.01
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: 3.28
• Enterprise Value/Gross Profit: 5.65
• Enterprise Value/Ebitda: 11.21
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: $27.00 ▲(12.27% Upside)

Sands China shows a strong financial recovery with significant revenue and profit growth, which is the most significant factor in its score. However, high leverage remains a risk. Technical analysis indicates potential short-term weakness, and the valuation suggests the stock is fairly valued. The absence of earnings call and corporate events data limits additional insights.

Positive Factors

Revenue Growth

The substantial revenue growth reflects Sands China's successful recovery and expansion post-pandemic, indicating strong market demand and effective business strategies that enhance long-term financial health.

Operational Efficiency

Improved margins demonstrate enhanced operational efficiency and profitability, suggesting that Sands China is effectively managing costs and maximizing revenue, which supports sustainable growth.

Cash Flow Strength

Robust operating cash flow indicates strong liquidity and the ability to fund operations and growth initiatives, ensuring financial stability and resilience against market fluctuations.

Negative Factors

High Leverage

High leverage poses a risk to financial stability, as it can lead to increased interest expenses and reduced flexibility in managing economic downturns or pursuing new investments.

Equity Ratio Concerns

A low equity ratio indicates that Sands China relies heavily on debt financing, which can be risky if market conditions worsen, potentially impacting long-term financial health and investor confidence.

Free Cash Flow Decline

The decline in free cash flow suggests increased capital expenditures, which could strain liquidity if not managed carefully, affecting the company's ability to invest in growth opportunities.

Sands China Business Overview & Revenue Model

Company Description

Sands China Ltd., an investment holding company, develops, owns, and operates integrated resorts and casinos in Macao. It owns and operates The Venetian Macao, The Londoner Macao, The Parisian Macao resort, The Plaza Macao, and The Sands Macao casino; the Cotai Expo, a convention and exhibition hall; and the Cotai Arena, an entertainment venue, as well as Cotai Water Jet ferry for leisure and business travelers. As of December 31, 2021, the company had 12,373 hotel rooms and suites, 151 restaurants and food outlets, 2.1 million square feet of retail malls, 1.7 million square feet of MICE space, 4 permanent theatres, a 15,000-seat arena, and casinos. It also offers ferry transportation and leasing services, and pontoon leasing; travel and tourism agency services; security services; human resources administration services; and mall management services, as well as outsourcing services, including information technology, accounting, hotel management, and marketing. The company was incorporated in 2009 and is headquartered in Taipa, Macau. Sands China Ltd. is a subsidiary of Las Vegas Sands Corp.

How the Company Makes Money

Sands China generates revenue primarily through its gaming operations, which include table games and slot machines within its casinos. The company benefits from a robust gaming revenue model driven by both mass gaming and VIP segments. In addition to gaming, Sands China earns significant income from its hotel operations, food and beverage services, retail space leasing, and entertainment offerings. The integrated resort model allows Sands China to attract a diverse customer base, increasing foot traffic and spending across its various services. Furthermore, strategic partnerships with local and international travel agencies, as well as promotional events and conventions hosted at its properties, contribute to enhancing its revenue streams.

Sands China Financial Statement Overview

Summary

Sands China's financial performance shows strong recovery with significant revenue and profit growth post-pandemic. High margins and cash flow ratios indicate improved operational efficiency and profitability. However, the high leverage poses a risk, despite the improved equity position.

Income Statement

Sands China shows strong recovery in its income statement, with significant revenue growth from $4.12 billion in 2023 to $7.08 billion in 2024, indicating a 71.76% increase. Gross profit margin improved to 59.0% from 50.6% in 2023. Net profit margin also increased to 14.76% in 2024, compared to 16.78% in 2019, before the pandemic impacts. EBIT and EBITDA margins are strong at 19.29% and 30.31% respectively, showcasing improved operational efficiency and profitability. These metrics reflect a robust recovery trajectory.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 7.91 in 2024, indicating significant leverage. However, the company's equity has turned positive to $1.03 billion from a negative position in 2023. Return on Equity (ROE) is high at 101.46%, indicating efficient use of equity, but this is due to the small equity base. The equity ratio remains low at 9.23%, signaling potential risks from financial leverage. Despite the high leverage, the positive equity turnaround suggests improving financial health.

Cash Flow

Operating cash flow remains strong at $2.07 billion in 2024, with a healthy operating cash flow to net income ratio of 1.98. Free cash flow is positive at $1.21 billion, although it saw a decrease from $2.08 billion in 2023, reflecting increased capital expenditures. The free cash flow to net income ratio stands at 1.16, indicating solid cash generation relative to earnings. Overall, cash flow metrics suggest robust liquidity and operating efficiency, despite fluctuations in free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.02B	7.08B	6.53B	1.60B	2.87B	1.69B
Gross Profit	4.08B	4.18B	5.24B	487.00M	1.73B	549.00M
EBITDA	2.06B	2.15B	2.02B	-427.00M	25.00M	-574.00M
Net Income	917.00M	1.04B	692.00M	-1.58B	-1.05B	-1.52B
Balance Sheet
Total Assets	10.08B	11.17B	10.26B	10.56B	10.09B	10.55B
Cash, Cash Equivalents and Short-Term Investments	985.00M	1.97B	1.36B	790.00M	678.00M	861.00M
Total Debt	7.09B	8.16B	8.33B	10.20B	7.95B	7.04B
Total Liabilities	8.96B	10.14B	10.26B	11.26B	9.21B	8.62B
Stockholders Equity	1.12B	1.03B	-4.00M	-700.00M	888.00M	1.93B
Cash Flow
Free Cash Flow	993.00M	1.21B	2.09B	-676.00M	-476.00M	-1.83B
Operating Cash Flow	1.97B	2.07B	2.29B	-473.00M	88.00M	-816.00M
Investing Cash Flow	-924.00M	-810.00M	-180.00M	-325.00M	-634.00M	-1.02B
Financing Cash Flow	-1.61B	-658.00M	-2.45B	1.82B	366.00M	231.00M

Sands China Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCHYY, the sentiment is Negative. The current price of 24.05 is below the 20-day moving average (MA) of 25.89, below the 50-day MA of 26.31, and above the 200-day MA of 23.38, indicating a neutral trend. The MACD of -0.40 indicates Positive momentum. The RSI at 33.88 is Neutral, neither overbought nor oversold. The STOCH value of 8.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCHYY.

Sands China Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LVS	74 Outperform	$41.85B	26.60	62.28%	1.51%	8.37%	10.20%
RRR	71 Outperform	$6.63B	22.19	96.16%	3.22%	4.69%	15.18%
SCHYY	66 Neutral	$19.47B	21.26	111.19%	2.21%	-2.90%	-13.46%
MGM	63 Neutral	$9.61B	220.65	2.25%	―	0.05%	-94.07%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MLCO	56 Neutral	$2.69B	26.18	―	―	11.32%	―
WYNN	53 Neutral	$12.30B	25.99	―	0.80%	-0.26%	-44.45%