• Save
Las Vegas Sands 9-16-11
Upcoming SlideShare
Loading in...5
×
 

Las Vegas Sands 9-16-11

on

  • 1,795 views

Las Vegas Sands Inc. (LVS) presented by Tushar (T.J.) Jain, Ellen Yang, and A.J. Tus on September 16, 2011.

Las Vegas Sands Inc. (LVS) presented by Tushar (T.J.) Jain, Ellen Yang, and A.J. Tus on September 16, 2011.

Statistics

Views

Total Views
1,795
Views on SlideShare
1,562
Embed Views
233

Actions

Likes
1
Downloads
0
Comments
0

1 Embed 233

http://blog.sterniag.com 233

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Las Vegas Sands 9-16-11 Las Vegas Sands 9-16-11 Presentation Transcript

  • Las Vegas Sands Corp. Tushar Jain ♠ AJ Tus ♣ Ellen Yang
  • AgendaI. Company OverviewII. Investment ThesisIII. Competitive Analysis • Las Vegas • Macau • SingaporeIV. Key Drivers and RisksV. ValuationVI. Questions Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Visionary leader• Sheldon Adelson – Bought Sands Hotel and Casino in 1988 – Transformed company into global empire – Considered the Steve Jobs of the gaming industry Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Company OverviewLVS is owner and operator of luxury hotels, casinos, and resorts worldwideLas Vegas Macau Singapore The Venetian Sands Macao Marina Bay Sands Bethlehem The Palazzo LV The Venetian Macao Sands Bethlehem Sands Expo Center Four Seasons Hotel Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Corporate Timeline 1988 1990 1999 2004 2007 2008 2009 2010 2012 2013+ Sands CotaiSheldon Adelson scheduled tobuys Sands Hotel open in and Casino Macau Four Seasons Hotel opened in Cotai Strip, Macau Additional Cotai properties to be opened Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Investment Thesis• Non-replicable market exposure – Joint property model in Las Vegas – First mover advantage in Cotai Strip, Macau – Dominant market position in Singapore• Great business at a good price – Unrecognized growth in developing properties – Mitigated risks in premium target market Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Las VegasIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Stagnation in Las Vegas 155000 96% 94% 150000 92% 145000 90% 140000 88% Rooms 135000 86% Occupancy 84% 130000 82% 125000 80% 120000 78% 2006 2007 2008 2009 2010 $12,000.0 39.5 39 $10,000.0 38.5 $8,000.0 38 37.5 $6,000.0 Revenue 37 Visitors $4,000.0 36.5 36 $2,000.0 35.5 $- 35 2006 2007 2008 2009 2010 Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Las Vegas Gaming Market(Company Revenue by Geographic Distribution) LVS Wynn Singapore US 19% 31% US Macau 21% 60% MGM Macau 69% Macau US 48% 52% Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • LVS Vegas Strategy Table Game Revenue: $357.9 MThe Venetian Slot Machine Revenue: $201.4 M • Over 5,000 suites Hotel Revenue: $445.9 M • 110 table games Food and Bev Revenue: $260.6 M • 1,370 slot machines • VIP Club, SpaClub, entertainment Total Revenue: $1.3 Billion complex, Grand Canal ShoppesThe Palazzo 5-Year Vegas Net Revenues • Over 3,000 suites • 120 table games $1,400.00 • 1,270 slot machines $1,200.00 • VIP Club, SpaClub, entertainment $1,000.00 complex, Shoppes at the Palazzo $800.00 $600.00 $400.00Sands Expo Center $200.00 • Over 2.3 million square feet of $- premier exhibition and meeting 2006 2007 2008 2009 2010 space Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • AsiaIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • What Happens in Vegas Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Has Moved to Asia Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Macau and Singapore have Overtaken Vegas 2010 Gaming Revenue (In Billions) Asia Las Vegas $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 Revenue/Casino (In Millions) Revenue/Visitor Asia AsiaLas Vegas Las Vegas $- $200 $400 $600 $800 $1,000 $- $200 $400 $600 $800 $1,000 Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Why Asia Heavily • Government grants concession rights regulated • Limits entrance of competition • Growing middle class in AsiaTarget market • Number of high net worth individuals to increase by 133% in growth next five years Increased • New ferry from Hong Kong to Cotai modes of • Bridge from China to Macau and Zhu Hai planned for 2016transportation • Possible move by Singapore government to allow junketsDeregulation of Junkets Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • MacauIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Macau Development Timeline 2006 2007 2010 2010 2012 2012+First Cotai Strip Venetian Macau Wynn announces Macau Theme MGM LVS Cotai hotel opens opens planned Park announced Expects to Central development begin Coati brought development online Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Macau Gaming Market(Company Revenue by Geographic Distribution) LVS Wynn Singapore US 19% 31% US Macau 21% 60% Macau 69% MGM Macau US 48% 52% Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Competitive Advantage in Macau• Strong foothold in Cotai Strip – Effectively managing Cotai Development – Largest current and developing projects • Venetian Macau: 3,000+Rooms • Sands Cotai Center: 6,000+ Rooms – Control of Transportation Infrastructure • LVS Owned Ferry System • New Bridge Development Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • SingaporeIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Singapore Gaming Market(Company Revenue by Geographic Distribution) LVS Wynn Singapore US 19% 31% US Macau 21% 60% MGM Macau 69% Macau US 48% 52% Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Singapore’s Gaming Industry Sentosa Island Resort Marina Bay Sands Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Drivers and RisksIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Catalysts & Drivers• Junket legalization in Singapore• Opening of Cotai properties• Q3 Earnings (October 28, 2011) Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Risks• Reductions in discretionary spending• Travel restrictions imposed by the Chinese government to Macau• Significant changes to tax laws• Double-dip recession Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • ValuationIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • QuestionsIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • AppendixIntroduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Appendix A:LVS Property Summary Property Hotel Rooms # Table Games # Slot Machines Amenities VIP Club, SpaClub, entertainment Venetian (Vegas) 5,040 110 1,370 complex, Grand Canal Shoppes VIP Club, SpaClub, entertainment Palazzo (Vegas) 3,066 120 1,270 complex, Shoppes at the Palazzo Sands Expo Center 2.3 million sq ft of exhibition and meeting N/A N/A N/A (Vegas) space Ferry to Mainland China, VIP Club, Sands (Macau) 289 420 1,140 restaurants and retail Restaurants and retail, entertainment Venetian (Macau) 2,900 600 2,160 complex, event center Apartment complex (underFour Seasons & Plaza 360 120 200 development), VIP mansions, Casino (Macau) restaurants and retail, event center Marina Bay Sands SkyPark, restaurants and retail, 2,600 620 2,300 (Singapore) entertainment complex, event center Retail facility, event center, National Sands (Bethlehem) 300 (opening 2011) 80 3,020 Museum of Industrial History Total 14,555 2,070 11,460 - Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation
  • Appendix B:Industry Analysis • Gaming equipment industry is highly concentratedPower of Moderate • No dominant player (stable prices)Suppliers • Lengthening of replacement cyclesPower of • Game offerings are similar across casinos ModerateBuyers • Switching costs are low (loyalty programs are key)Barriers to • Heavily regulated industry HighEntry • High development costs ($500 M - $1.5 B)Power of • Alternative forms of gambling LowSubstitutes • Alternative forms of entertainmentIntra- • Few high-end, integrated resort casino companiesIndustry High • Same target market and similar gaming optionsRivalry • Key differentiators: ambience and amenities Introduction ♦ Investment Thesis ♠ Competitive Analysis ♣ Drivers & Risks ♥ Valuation