HONG KONG: Sands China, the Macao unit of Las Vegas Sands Corp, tumbled over 5 percent yesterday, even though its parent company's results met market expectations.

Sands China failed to stop the plunge after it was briefly suspended from trading as its parent's fourth quarter results were released yesterday. Shares of the Macao casino operator fell 2.49 percent at the opening and dived 5.7 percent to HK$10.60 yesterday after trading resumed.

Las Vegas Sands released the fourth quarter results in the US on Wednesday. Sands China requested its shares be suspended from trade in the morning session, to give investors time to examine the operating results of its majority shareholder.

The parent company's fourth quarter earnings met analysts' estimates, but disappointed some hoping for better performance from its Macao operations, which led to a low open.

Las Vegas Sands said earlier its loss narrowed in the fourth quarter, due to strong business growth in Asia, which countered a US slump.

However, Chairman and Chief Executive of Las Vegas Sands, Sheldon Adelson was pleased with Sands' performance in Macao, Reuters reported yesterday.

Adelson said its earnings before interest, taxes, depreciation, amortization and rent rose a "whopping" 48 percent in the fourth quarter by focusing on mass gaming and the hotel and retail businesses, while controlling costs. The company is also planning to open a big resort in Singapore.

Morgan Stanley, however, keeps its underweight rating on the stock, saying market shares of the most expensive casino stock in Macao is declining for both mass market customers and high-rollers at the luxury casino of the Four Seasons Hotel.

CLSA, on the other hand, rates Sands China at Buy with HK$14 as the price target, saying Sands China's more diversified and aggressive business model with greater emphasis on the wider-margin mass-market player should justify a premium multiple above its peers.

Sands China raised about HK$20 billion in an IPO in 2009, but saw its price slump 10.2 percent to close on its debut at HK$9.32 on November 30.

(HK Edition 02/19/2010 page2)