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Sands China Rises to Record After Earnings Beat on Cotai

Bloomberg  Sands China Ltd. (1928), the Macau casino operator controlled by billionaire Sheldon Adelson, surged to a record in Hong Kong after reporting third-quarter earnings that beat analyst estimates as its new resort drew more gamblers.

The stock rose 9.2 percent to close at HK$58, the highest level since its November 2009 listing. The shares have climbed 71 percent this year, compared with a 3 percent gain for the city’s benchmark Hang Seng Index.

Sands China, Galaxy Entertainment Group Ltd. (27) and Melco Crown Entertainment Ltd. (MPEL) have been expanding on Cotai, a piece of reclaimed land envisioned to be Macau’s equivalent to the Las Vegas Strip. Sands Cotai Central, the operator’s latest resort which opened in April last year, has added shops, entertainment shows and hotel rooms to attract middle-class gamblers to the world’s largest casino hub.

“Sands has been very strong, especially on the mass-market segment,” Grant Govertsen, a Macau-based analyst at Union Gaming Group, said by phone today. “The company has the biggest footprint in non-gaming entertainment which helps to draw a lot of family holiday-makers.”

Adjusted property earnings before interest, taxes, depreciation and amortization increased 62 percent to $785.3 million in the third quarter, the company said in a stock exchange statement. That compares with an average estimate of $732 million from 10 analysts compiled by Bloomberg.

“The sector is on fire again,” Govertsen said. “Even the second or third-tier Macau related stocks are enjoying the strong momentum.”

Neptune Group Ltd. (70) and Success Universe Group Ltd., which have investments in the gaming and cruise ship businesses, surged 17 percent and 8 percent, respectively. MGM China Holdings Ltd. (2282) climbed 4.2 percent and Galaxy Entertainment rose 4.1 percent.