This company, which primarily develops, owns and operates casino gaming and integrated resorts in Asia, has been grouped into casino sector in gambling industry.
It seems that demand, in US market, for casino and related service of companies in this sector, according to the typical company data, has been weak and slowed down in the past three years. It is probably a reflection in local economy of US as indicated by the fact that there are general decreases in mid-west, south, and mid-Atlantic regions but increase in west in the past several years.
Demand in Macau market started to take off after sluggish 2015 as indicated by some of typical company’s data (17-20% annual growth in revenue in 2017 and 2016).
While slow growth in US domestic, benefiting from cost saving and strong growth in Macau, the average gross margin, from the typical company data, seems to have been improved slightly. The current typical gross margin is about 37% in 2017. The typical operating margin is now at about 15% with a higher SG&A as percentage of sales of about 23% probably as a result of increased marketing spending.
The typical average stock Price/cash flow ratio is 37 ranging from 27 to 50.
It seems that the demand for massive market casino and related service of this company has been going up since 2016 as reflected by re-bounce of visitors in Macau.
The fiscal 2017 compared with 2016
Net revenue increased about 17% primarily attributable to increase in gaming segments.
Fiscal 2016 compared with fiscal 2015
Net revenue increased about 14% primarily attributable to newly commenced operation.
Its gross margin (including depreciation) went up from 16% to about 21% in 2018 probably as a result of largely increased revenue. And with improved SG&A as percentage of sales (around 8%), its operating margin has been up to around 12%.
Stock price
This stock currently has a stock price/cash flow ratio of 177. We think that its stock is being relatively overvalued compared with LAS VEGAS SANDS CORP.
