Sector financial performance:

This company, which primarily owns and operates integrated casino resorts, 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.

More about this industry

Company performance:

It seems that the demand for casino gaming and related service of this company has been increasing fast in Macau but slow in US operation in 2017 and 2018.

The first three months of fiscal 2018 compared with the same period of 2017

Net revenue increased 20.5% primarily attributable to increase of about 28% in Macau casino resorts.

The fiscal 2017 compared with 2016

Net revenue increased 41% primarily attributable to increase of about 62% in Macau casino resorts (new added tables).

Fiscal 2016 compared with fiscal 2015

Net revenue (excluding new opening) decreased about 6% primarily attributable to decrease of about 8% in Macau casino resorts.

Its gross margin (including depreciation and marketing) is 29% in 2018. And with decreased SG&A as percentage of sales (around 11%), its operating margin has been at around 19%.

Stock price

This stock currently has a stock price/cash flow ratio of 51. We think that its stock is being relatively fairly valued compared with its peer -LAS VEGAS SANDS CORP.