UBS: Sands China (01928) fourth quarter EBITDA below expectations, rating remains "Neutral"

UBS released a research report stating that Las Vegas Sands (LVS) announced that the adjusted EBITDA for the fourth quarter of 2025 in Macau is $608 million, an increase of about 6% year-on-year. Adjusting for VIP room betting rates, the EBITDA is $582 million, lower than the market consensus forecast of $628 million. The bank rated Sands China (01928) as "neutral" with a target price of HK$22.4. UBS stated that the profit margin in this quarter is lower than expected, mainly reflecting an increase in costs and a shift in revenue structure towards lower-margin high-end segments. Management reiterated its target of achieving annual EBITDA of $2.7 billion for the Macau property, which the bank believes will be supported by improvements in asset utilization. Management believes that improvements in marketing plans and the launch of new facilities since the second quarter have led to growth in gaming revenue in the right direction, and will focus on optimizing promotional efficiency in 2026. Management pointed out that the average consumption per capita in the mass market segment remains stagnant, and the shift towards the high-end segment may impact its profit margin structure.