Las Vegas Sands Plans Macau Expansion with Sands Cotai Central
Las Vegas Sands (NYSE: LVS) has a strong foothold in Macau’s casino industry. It currently operates several facilities in Macau, including the Venetian Macao, the Sands Macao and the Plaza Casino at the Four Seasons Hotel. LVS has ambitious plans for its expansion in Macau. Its subsidiary, Sands China, recently signed agreements with Hilton Worldwide and InterContinental Hotels for hotels at its $4 billion-plus resort in the Cotai area. LVS competes with Wynn Resorts (NASDAQ:WYNN), MGM Resorts International (NYSE:MGM), SJM (HKG:0880), Galaxy (HKG:0027) and Harrah’s among others. 
Our price estimate for LVS near $48 implies a 5% premium to the current market price.
Sands Cotai Central Plans
Sands Cotai Central, previously Parcel 5 & 6, is scheduled to open in Spring 2012.
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It is centrally located next to Melco’s City of Dreams and between The Venetian Macau and Wynn Resorts and MGM’s proposed developments. The development timeline of Sands Cotai Central is as follows:
- Hilton’s five-star Conrad is expected to open in the first quarter of 2012 with more than 600 rooms.
- A four-star Holiday Inn by InterContinental is scheduled to open late in first quarter 2012 with more than 1,200 rooms.
- In the third quarter, Sands China plans to launch nearly 2,000 Sheraton-branded hotel rooms.
- In early 2013, it plans to open an additional 2,000 rooms under the Sheraton Towers brand of Starwood Hotels & Resorts Worldwide.
We believe LVS is one of the best positioned casino companies in the world.
Its geographic presence in US, Singapore and Macau provides it an extra edge vis-a-vis other casino operators and it is poised to benefit from its geographic diversification strategy in the coming years.