Las Vegas Sands (NYSE:LVS) is contemplating building an integrated resort in South Korea according to reports. George Tanasijevich, Marina Bay Sands’ president & CEO, asserted that the company is already in discussion with the South Korean government to enter the market. He also believes that South Korea’s geographical location, well-developed infrastructure and skilled work force could be the key factors for growth.  We have a price estimate of $50 for Las Vegas Sands, implying a premium to the current market price.
Strengthening Foothold in Asia
According to our estimates, Asia contributes approximately 75% to LVS’ stock valuation. It presently operates four resorts in Macau and enjoys a dominating position in the region with about 17.7% share in overall gross gaming revenues.  Similarly, in Singapore, it enjoys an effective duopoly with Resorts World Sentosa. If LVS’ South Korea plans materialize, this could further strengthen its foothold in Asia.
South Korea is a premier financial hub and enjoys a well-developed economic set-up and a stable political environment. However, there is little information about LVS’ interests and investment outlay plans for the South Korean region. It hasn’t disclosed more details concerning its plans, including key locations in the country.
LVS, which is known for its first mover advantage in different geographies, is also exploring opportunities in other emerging nations, especially India, Japan, Taiwan and Vietnam. In the past, LVS’ diversified operations shielded the company from the global economic crisis besides providing a stable revenue source. We are optimistic about its expansion plans which have clearly stood out in terms of exploring new regions for growth as well as its strategy under the leadership of Sheldon Adelson.Notes: