Focused on the High Margin Mass Segment, Neutral

Transcription

1 GTJA Research 国泰君安研究 : Sands China (01928 HK) Noah Hudson 公司报告 : 金沙中国 (01928 HK) noah.hudson@gtjas.com Focused on the High Margin Mass Segment, Neutral 瞄准高利润率中场, 中性 We maintain our forecast for a 34.1% decline in 2015 GGR and maintain our "Underperform" sector rating. Macau's weak June and July GGR indicates that new casinos are not brining new gaming revenue. We also expect a full smoking ban in casinos sometime in 2016, which could decrease GGR by 12% to 16%. Sands China operates the largest portfolio of integrated casino resorts, convention centers and hotels in Macau, including the Venetian Macao, Sands Cotai Central, Four Seasons & Plaza Macao and Sands Macao. After the Company opens the US$2.7 bn Parisian (as early as July 2016) and also the new St. Regis mixed-use hotel tower at Sands Cotai Central, the Company will have over 12,000 hotel rooms, nearly 2.0 mn sq.ft. of MICE space and 2.0 mn sq.ft. of retail and other space. We forecast adjusted EBITDA of US$2.322 bn, US$2.375 bn and US$2.812 bn, representing growth of -28.8%, 2.3% and 18.4%, respectively. Sands China focuses on the mass segment, which gives the Company a gross margin from table games that is 4x higher than that of the VIP segment. Among Macau's casino operators, Sands China has consistently had the highest or second highest EBITDA margin. We set Sands China s initial investment rating at Neutral with target price of HK$31.70, equivalent to 15.0x 2015 EV/ adjusted EBITDA. 我们维持澳门 2015 年总博彩收入下降 34.1% 预期以及行业 跑输大市 评级 澳门很弱 的 6 月和 7 月总博彩收入显示新赌场并没有带来新博彩收入 我们也预期全面禁止抽烟政 策在 2016 年启动, 或许让总博彩收入下降 12% 至 16% 金沙中国经营澳门规模最大的综合博彩度假村 会展中心和酒店, 包括澳门威尼斯人 金 沙城中心 澳门四季酒店及百利宫娱乐场 澳门金沙 27 亿美元的巴黎人 ( 可能 2016 年 7 月开幕 ) 以及金沙城中心第四座综合用途酒店大楼 St. Regis 酒店开幕后, 公司将拥有 1 万 2 千多间酒店客房 接近 2 百万平方尺的会展场地以及 2 百万平方尺的零售和其他场地 我们分别预期 2015 年至 2017 年调整后 EBITDA 为 亿美元 亿美元和 亿美元, 相当于 -28.8% 2.3% 和 18.4% 的增长 公司的中场赌桌毛利率比贵宾高 4 倍, 所以金沙中国把注意力放在中场 在澳门赌场经营商中, 金沙中国一贯拥有最高或者第二 高 EBITDA 利润率 我们定首次投资评级为 中性, 目标价为 港元, 相当于 15.0 倍 2015 年调整后 EV/ EBITDA Rating: Neutral Initial 评级 : 中性 ( 首次研究 ) 6-18m TP 目标价 : HK$31.70 Share price 股价 : Stock performance 股价表现 (10.0) (20.0) (30.0) (40.0) (50.0) % return Change in Share Price 股价变动 1 M 1 个月 3 M 3 个月 HK$ (60.0) Aug-14 Oct-14 Nov-14 Dec-14 Feb-15 Mar-15 May-15 Jun-15 Aug-15 HSI Sands China 1 Y 1 年 Abs. % 绝对变动 % (1.7) (0.3) (41.8) Rel. % to CCMP index 相对纳指变动 % (34.0) Avg. share price (HK$) 平均股价 ( 港元 ) Source: Bloomberg, Guotai Junan International. Year End 年结 Turnover 收入 Net Profit 股东净利 EPS 每股净利 EPS 每股净利变动 PER 市盈率 BPS 每股净资产 PBR 市净率 DPS 每股股息 Yield 股息率 ROE 净资产收益率 12/31 (US$ m) (US$ m) (US$) ( %) (x) (US$) (x) (US$) (%) (%) 2013A 8,908 2, A 9,505 2, F 7,102 1, (30.6) F 7,090 1, F 8,199 1, Shares in issue (m) 总股数 (m) 8,069.0 Major shareholders 大股东 Las Vegas Sands (LVS US) 70.3% Market cap. (HK$ m) 市值 (HK$ m) 254,979.1 Free float (%) 自由流通比率 (%) month average vol. 3 个月平均成交股数 ( 000) 19, Net gearing (%) 2015 净负债 / 股东资金 (%) Weeks high/low (HK$) 52 周高 / 低 / Est. NAV (HK$) 2015 每股估值 ( 港元 ) 38.5 See the last page for disclaimer Page 1 of 40

2 INDUSTRY UPDATE... 3 Smoking Ban... 3 Low Number of Gaming Tables Allowed at New Casinos... 4 Macau Visitors... 6 Planned Infrastructure Improvements Gross Gaming Revenue COMPANY History and Background Non-Casino Businesses Casino Properties FINANCIAL ANALYSIS Revenue Casino Property Revenue Forecasts Operating Expenses Non Operating Expenses Operating Income, EBITDA & Net Profit Dividends VALUATION RISKS FINANCIAL STATEMENTS AND RATIOS APPENDIX Macau Gaming Operators Comparison Macao Gaming s Historical Development See the last page for disclaimer Page 2 of 40

3 INDUSTRY UPDATE Smoking Ban Under the new revised Tobacco Control Bill, which is still subject to public consultation and amendments, the following could be (most likely will be, in our view) banned: Smoking lounges in mass gaming areas Smoking in VIP rooms Smoking e-cigarettes in all public spaces, including casinos Sale of e-cigarettes in Macau In addition, tobacco sales tax would be increased and the smoking fine would be increased from MOP400 to MOP1,500 (US$188). After suggesting that smoking lounges might be allowed in casinos, the Macau government confirmed that the revised Tobacco Control Bill would call for a full smoking ban in casinos. On July 10, Macau's Secretary for Social Affairs and Culture, Alexis Tam Chon Weng, was quoted in Macau Business Daily as saying "some legislators seem very confident about establishing smoking lounges that can scientifically and effectively prevent the health of gaming workers and tourists being affected by tobacco" and that whether or not the government will ban smoking lounges in casinos will depend upon whether or not casinos can prove the effectiveness of their lounges. Then on July 30 during Wynn Resorts (WYNN US)'s earnings call, chairman Steve Wynn said "I was glad to see that they (the Macau government) allowed the smoking rooms... Secretary Tam, who is very concerned about public health, finally felt as if it was okay to allow the smoking rooms to continue, and that s a good thing. However, the next day, July 31, Tam said in a statement that the Macau government remained committed to its proposal for a full smoking ban inside casinos. The revised Tobacco Control Bill could decrease GGR by 12% to 16%. Since the beginning of this year, Macau government officials have said several times that they intended to impose a full smoking ban. QoQ net revenue growth at Melco Crown (MPEL US)'s eight Mocha Clubs was essentially flat at -1.9% and -0.3% in 2Q14 and 3Q14, respectively, when smoking was allowed. Then starting in October of last year, smoking was banned at the Mocha Clubs and their net revenue fell 15.5% and 11.6% QoQ in 4Q14 and 1Q15, respectively. We think the city-wide full smoking ban in casinos would have a negative effect on Macau's total GGR. We maintain our expectation that the revised Tobacco Control Bill will eliminate smoking in VIP areas and also ban smoking lounges in mass gaming areas. The revised Tobacco Control Bill passed its first reading at Macau's Legislative Assembly on July 10, with 26 of the 28 attending legislators voting for the bill and only two votes against it, showing strong support for a full smoking ban. Even if casino operators can prove the effectiveness of their smoking lounges, government representatives and legislators opposed to the lounges have already cited academic reports claiming that smoking lounges will not completely prevent the harm that tobacco causes to individuals in the casinos. We therefore think the bill will be a full ban on smoking, eliminating VIP smoking and also banning the smoking lounges in mass gaming areas. We now expect the revised Tobacco Control Bill to go into effect around mid or late 2016 and not early 2016 as previously expected. Previously, government officials stated that they expected the bill to be passed in early However, on July 22, Mr Chan Chak Mo, who oversees the committee in charge of the smoking bill, said that it " may take about a year to finish its report". Only after the committee has issued a report on the bill will the document return to the full assembly for its second and final reading. See the last page for disclaimer Page 3 of 40

4 Table-1: Macau Casinos Smoking Ban Development Date 6-Oct-14 Smoking Bill enacted restricted smoking to VIP rooms and enclosed non-gaming smoking lounges on main gaming floors. 29-Jan Jan Jun-15 Macau s Secretary for Social Affairs and Culture, Alexis Tam Chon Weng, announced that the government would propose a Revised Tobacco Control Bill that would fully ban smoking inside casinos. 58.4% of casino workers do not like working in VIP rooms where smoking is allowed; 75% of Macau residents support a full smoking ban in casinos (Macau Health Bureau 4-year review). 66% of surveyed casino workers support casino smoking lounges Casino operators' survey). 30-Jun-15 Macau proposed Revised Tobacco Control Bill. 10-Jul-15 Macau s Legislative Assembly approved the first reading of the Revised Tobacco Control Bill (26 for votes, 2 against). 10-Jul Jul Jul-15 Social Affairs and Culture, Alexis Tam Chon Weng, said smoking lounges could still be a possibility if gaming operators could scientifically prove that smoking lounges could effectively prevent tobacco harm. Macau s Secretary for Social Affairs and Culture, Alexis Tam Chong Weng, reiterated that smoking lounges inside casinos would prevent proper control of secondhand smoke; We have a very firm stance on this matter [a full smoking ban] and our intention is to protect the health of Macau s population. Bill sent to second committee of Macau s Legislative Assembly for further debate. 22-Jul Jul-15 Mr. Chan Chak Mo, who oversees the Second Committee of Macau s Legislative Assembly: " may take about a year to finish its report" According to Legislator Chan, the members of the committee are divided on the casino smoking lounges issue. Aug 1 - Sept. 31, 2015 Public Consultation Period Mid 2016 (estimate) Only after the committee has issued a report on the bill will the document return to the full assembly for its second and final reading. Source: Guotai Junan International. Low Number of Gaming Tables Allowed at New Casinos Going forward, we expect the actual number of gaming tables allowed by the Macau government at new casinos to be far less than their built for capacities. Galaxy Macau Phase II opened on May 27 this year with capacity for 500 tables but was only allowed 150 new tables. Gaming table additions are capped by the Macau government such that total gaming tables cannot exceed 7,150 by With 5,704 gaming tables in operation as at 1Q15 plus the additional 150 tables already added at Galaxy Macau Phase II, that leaves room for only 1,296 more additions through 2023, which is just 46.9% of the total 2,761 tables planned to be added through Table-2: Macau Gaming Tables Capacity*, Slots Machines and Hotel Rooms, F 2012A 2013A 2014A 2015F 2016F 2017F Total Growth 2014 to CAGR Gaming Tables Capacity* 5,485 5,750 5,711 6,711 8,227 8, %* 16.2% yoy Growth 3.5% 4.8% -0.7% 17.5% 22.6% 8.5% Slot Machines 16,585 13,106 13,018 15,518 20,593 21, % 18.4% yoy Growth 3.3% % 19.2% 32.7% 4.9% Casino Hotel Rooms 13,859 16,690 16,790 19,960 26,790 28, % 19.7% yoy Growth 35.2% 20.4% 0.6% 18.9% 33.6% 7.5% Source: Gaming Inspection and Coordination Bureau Macao SAR, Government of Macao Special Administrative Region Statistics and Census Service. Note*: Due to Macau government restrictions on the number of gaming tables, actual gaming tables added will be significantly less than gaming tables capacity. See the last page for disclaimer Page 4 of 40

5 Table-3: Macau Total Number of Casinos by Company, F Operators F 2016F 2017F S.J.M. (00880 HK) Sands China (01928 HK) Galaxy (00027 HK) Wynn Macau (01128 HK) Melco Crown (MPEL US) MGM China (02282 HK) Louis XIII Holdings (00577 HK) TOTAL Source: Gaming Inspection and Coordination Bureau Macao SAR, the Companies, Guotai Junan International. Table-4: Macau Development Timeline Expected Opening 27-May-15 Developer Galaxy Ent. (00027 HK) Project Name Broadway at Galaxy Macau Current Status Investment (Billion) Casino Tables Capacity* Slots Hotel Rooms Opened US$ May-15 Galaxy Ent. (00027 HK) Galaxy Macau Phase II Opened US$ ** 1,000 1,250 3Q15 Melco Crown Studio City Under US$ ,500 1,600 (MPEL US) (Melco Crown) Construction 2015 Total: US$7.3 1,000 2,500 3,170 1H 2016 Wynn Macau (01128 HK) Wynn Palace Under Construction US$ ,000 1,700 July or later 2016 Sands China (1928 HK) The Parisian Macao (Sands) Under Construction US$ ,500 3,300 Mid-2016 Louis XIII Hds. (00577 HK) Louis XIII Under Construction US$ Fall 2016 MGM China (02282 HK) MGM Cotai Under Construction US$ ,500 1, Total: US$10.7 1,516 5,075 6, SJM Hds. Lisboa Palace Under US$ ,000 2,000 (00880 HK) (SJM) construction 2017 Total: US$ ,000 2,000 Galaxy Ent. (00027 HK) Galaxy Macau Phases 3 & 4 Site investigation US$6.4-US$7.7 n.a. n.a. n.a. Not Determined US$6.4-US$7.7 n.a. n.a. n.a. Total Additions: US$29.0 3,261 8,575 12,000 Source: Guotai Junan International, the Companies: Wynn Macau (01128 HK), MGM China (02282 HK), Sands China (01928 HK), SJM (00880 HK), Galaxy Entertainment (00027 HK), Louis XIII Hds. (00577 HK) and Melco Crown Entertainment (MPEL US). Note*: Due to Macau government restrictions on the number of gaming tables, actual gaming tables added will be significantly less than gaming tables capacity. Note**: Galaxy Macau Phase II was granted permission from the government for just 150 gaming tables, much less than its 500 table capacity. Table-5: Macau Casino Operators' Number of Gaming Tables Q15 2Q15 Galaxy Ent. (00027 HK) ,059 Melco Crown (MPEL US) MGM China (02282 HK) SJM (00880 HK) 1,769 1,775 1,765 1,739 1,733 Sands China (01928 HK) 1,383 1,510 1,527 1,537 1,513 Wynn Macau (01128 HK) Total 5,431 5,748 5,705 5,704 5,814 Source: the Companies, Gaming Inspection and Coordination Bureau of Macao SAR. See the last page for disclaimer Page 5 of 40

6 Table-6: Macau Casino Operators' Number of Slot Machines Q15 2Q15 Galaxy Ent. (00027 HK) 1, ,028 1,911 3,542 Melco Crown (MPEL US) 3,467 2,838 1,331 1,324 1,138 MGM China (02282 HK) 1,272 1,368 1,197 1,126 1,144 SJM (00880 HK) 3,776 3,308 2,856 2,793 2,751 Sands China (01928 HK) 4,992 5,612 4,841 4,885 4,910 Wynn Macau (01128 HK) Total 16,688 14,899 12,932 12,688 14,192 Source: the Companies, Gaming Inspection and Coordination Bureau of Macao SAR. Macau Visitors Mainland China visitors on transit visas can now stay in Macau for seven days instead of five; however, we think this won't have much impact on GGR since the average length of stay of overnight mainland visitors is only around two days. Starting from July 1, the Macau government began allowing Chinese passport holders with a transit visa to stay in Macau for seven days, up from five days previously. The transit stay limit for a second visit remains the same, namely, if a Chinese passport holder with a transit visa enters Macau a second time within 60 days he/she can only stay for one day. Since overnight visitors to Macau from mainland China only stayed for on average 2.2 days in June, we think the increase from 5 to 7 days will not have a significant impact on increasing GGR. Figure-1: Average Stay Duration of Macau Visitors from All Origins All Visitors All Overnight Visitors Days Figure-2: Average Stay Duration of Macau Visitors from Mainland China Days Mainland China Visitors Mainland China Overnight Visitors Source: Gaming Inspection and Coordination Bureau of Macao SAR. Source: Gaming Inspection and Coordination Bureau of Macao SAR. More visitors to Macau are going for day trips instead of overnight stays, leading to lower hotel occupancy. The proportion of overnight visitors to Macau decreased from 46.2% in 2014 to 44.6% in 1H15. The number of overnight visitors declined by 7.6% YoY in 1H15, compared to a 0.7% decrease in the number of day-trippers. See the last page for disclaimer Page 6 of 40

7 Figure-3: Same Day Vs. Overnight Visitors Same-day Visitors Overnight Visitors 48.3% 48.7% 46.2% 46.4% 44.6% 51.7% 51.3% 53.8% 53.6% 55.4% H14 1H15 Source: Government of Macao Special Administrative Region Statistics and Census Service. Figure-4: Same Day Vs. Overnight Visitors, Growth (YoY) Same-day Visitors Growth (YoY) 15% 1 5% -5% % 15.6% % 5.1% 3.8% Overnight Visitors 12.6% 2.1% -0.7% -7.6% H15 Source: Government of Macao Special Administrative Region Statistics and Census Service. 1H15 hotel occupancy rates declined considerably, indicating quantity of hotel rooms is no longer a bottleneck. For all star rated hotels in Macau, occupancy rate fell from 87. in 2014 to 79.3% in 1Q15, and further to 77.8% in 2Q15. Looking at just the hotels of the listed gaming operators, the average occupancy rate fell from 95.2% in 2014 to 92.6% in 1Q15, and fell further to 91.8% in 2Q15. The lower hotel occupancy rates in 1H15 were due to the decrease in the number of overnight visitors and not due to more room supply, since from the end of 2014 to June Star rated hotel room supply only increased by 1.6%. Figure-5: Macau Star Hotels Occupancy Rates Total 5-star hotels 4-star hotels 3-star hotels 2-star hotels 9 85% 8 75% 84.2% 83.6% % 77.8% Figure-6: Macau Casino Hotels Occupancy Rates Galaxy (00027 HK) Melco Crown (MPEL US) MGM China (02282 HK) Sands China (01928 HK) SJM (00880 HK) Wynn Macau (01128 HK) Avg % 96.8% 96.2% 96.5% 95.2% % 91.8% 7 85% 65% Q15 2Q15 75% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Source: Government of Macao Special Administrative Region Statistics and Census Service. Source: the Companies. Table-7: Macau Star Hotel Rooms Growth (Sequential) June star hotels 18.5% 17.1% 10.7% % 4-star hotels -0.1% 28.4% 0.7% % 3-star hotels 0.6% % 4.2% 1. 2-star hotels % % Total 11.4% % 0.7% 1.6% Source: Government of Macao Special Administrative Region Statistics and Census Service. Total GGR per visitor plunged 34.6% YoY in 1H15. After 2014 experienced the first decline in GGR per visitor since record-keeping began in 2008, the situation has only worsened so far this year. In 1H15, mass Market GGR per visitor dropped 26. YoY, and VIP was even worse, down 39.8% YoY. See the last page for disclaimer Page 7 of 40

8 Figure-7: Macau GGR per Visitor Source: Government of Macao Special Administrative Region Statistics and Census Service. Figure-8: Macau GGR per Visitor, Growth (YoY) VIP Mass Market Total VIP Mass Market Total 4 HK$ ('000) 28.9% 29.7% 25.5% % 13.6% 26.8% 5.8% % % 8.3% % % % % H H15 Source: Government of Macao Special Administrative Region Statistics and Census Service. We expect GGR per visitor to continue to decline in 2H15 as Macau adds more non-gaming attractions to attract a broader range of tourists and diversify Macau s offerings to include more than just gaming. Besides casinos, the opening this year of new developments from Galaxy Entertainment (00027 HK, GEG ) and Melco Crown (MPEL US) will include many non-gaming and family related attractions. Opened on May 27, GEG s Galaxy Macau Phase II and Broadway will bring new non-gaming attractions making Galaxy Macau one of the most expansive water parks in Greater China. GEG s Broadway has a 3,000-seat Broadway Theatre, a 10 screen 3D Cineplex and UA Galaxy Cinemas. Melco Crown s Studio City, opening in mid 2015, will have a Batman Dark Flight virtual-reality ride, the Warner Bros. Family Entertainment Center, Asia's highest Ferris wheel, a 30,000 sq. foot Family Entertainment Center for kids, the House of Magic, a 5,000-seat Studio City Entertainment Center for live entertainment, a fully-operational TV broadcast studio, Pacha Nightclub, and an exotic jungle river-themed water ride, among other things. As more visitors go to Macau for non-gaming entertainment, GGR per visitor will continue to decline. In 1H15, Macau s total number of visitors decreased by 3.9% YoY to 14.7 million, worse than expectations of 2015 full year increase of 5%. The decline comes after the Macau Government Tourist Office had announced in January this year that it expected tourist arrivals to increase by 5% in The Tourist Office also got it wrong (this time in the other direction) in January 2014 when they forecast visitor growth of less than 5%, but actual 2014 growth turned out to be 7.5%. The number of visitors from P.R. China increased by 4.4% in 1H15, with no notable increases from any major regions in China. The proportion of mainlander visitors increased by 2.1 ppt in 1H15 to account for 69.5% of Macau s total visitors. In recent years, improved travel infrastructure, including high speed rail, has made it easier and more convenient for mainlanders from further away provinces to travel to Macau. In 2014, more direct flights connecting Macau to mainland cities including Tianjin, Xian and Shijiazhuang also helped support travel from far away provinces, and the number of Macau visitors from all regions of China surged, the lowest being 8.8% growth in visitors from North China. This contrasts to 1H15, where the highest growth was just 2.5% YoY, from Northwest China. See the last page for disclaimer Page 8 of 40

9 Figure-9: Macau Visitors by Place of Origin, Growth (YoY) Mainland China Hong Kong 3 Taiwan, China Total 22.2% % 1.6% % 4.6% 4.4% 0.3% -6.6% -4.4% -11.8% -6.6% 14.1% 7.5% % 0.3% -4.7% H15-3.9% Source: Government of Macao Special Administrative Region Statistics and Census Service. Figure-10: Macau Visitors by Place of Origin, % of Total 10 Mainland China Hong Kong Taiwan, China Other % 10.8% % 5.7% 4.3% 3.8% 3.4% % 27.1% 25.2% 23.1% 20.4% 21.5% 57.7% 60.2% 63.5% 67.4% 69.5% H15 Source: Government of Macao Special Administrative Region Statistics and Census Service. Figure-11: PRC Visitors by Region, % of Total South Central China East China North China Northeast China Southwest China Northwest China % % 4.5% 4.9% 5.1% 6.8% 6.6% % % 20.9% 20.8% 20.5% 19.6% % 63.5% 63.3% 62.9% 63.8% H15 Source: Government of Macao Special Administrative Region Statistics and Census Service. Note*: South Central China includes Guangdong, Hunan, Hubei, Henan and, Guangxi; East China includes Fujian, Zhejiang, Jiangsu, Shanghai, Jiangxi, Shandong and Anhui; North China includes Beijing, Hebei, Shanxi, Inner Mongolia and Tianjin; Northeast China includes Liaoning, Heilongjiang and Jilin; Southwest China includes Sichuan and Chongqing; Northwest China includes Shaanxi. Figure-12: PRC Visitors by Region, Growth South Central China East China North China Northeast China Southwest China Northwest China H15 2.5% 1.7% 1.3% -1.9% -4.6% -8.8% Source: Government of Macao Special Administrative Region Statistics and Census Service. Note*: South Central China includes Guangdong, Hunan, Hubei, Henan and, Guangxi; East China includes Fujian, Zhejiang, Jiangsu, Shanghai, Jiangxi, Shandong and Anhui; North China includes Beijing, Hebei, Shanxi, Inner Mongolia and Tianjin; Northeast China includes Liaoning, Heilongjiang and Jilin; Southwest China includes Sichuan and Chongqing; Northwest China includes Shaanxi. See the last page for disclaimer Page 9 of 40

10 Table-8: PRC Visitors by Province/Municipality and by Region, % of Total H15 Province/Region Guangdong 56.2% % 50.6% Fujian 6.4% 5.3% 4.9% % Hunan 3.7% 3.9% 4.1% 4.1% 4.3% Zhejiang 3.9% 4.1% % 3.4% Hubei 2.8% 3.2% 3.4% 3.7% 3.6% Jiangsu % 3.2% 3.2% 2.9% Shanghai 3.2% 3.3% 3.3% Henan 1.9% 2.1% 2.3% 2.8% 2.5% Guangxi 2.3% 2.4% 2.5% 2.8% 2.8% Jiangxi % 2.3% 2.5% 2.4% Sichuan % 2.4% 2.2% 2.3% Beijing 2.2% 2.1% 2.2% 2.1% 2. Hebei 1.1% 1.5% 1.5% 1.9% 1.8% Liaoning 1.7% 1.7% 1.8% 1.9% 2. Helongjiang 1.2% 1.4% 1.5% 1.7% 1.7% Shandong 1.2% 1.4% 1.7% 1.7% 1.7% Chongqing 1.2% 1.3% 1.4% 1.4% 1.4% Anhui 1.2% 1.4% 1.4% 1.4% 1.4% Shanxi % 1.3% 1.4% 1.3% Jilin 1.1% 1.2% 1.1% 1.3% 1.3% Shaanxi % 1.2% Inner Mongolia % 0.8% 0.8% 0.8% Tianjin 0.7% 0.8% 0.8% 0.8% 0.7% Region* South Central China 66.9% 63.5% 63.3% 62.9% 63.8% East China 20.9% 20.9% 20.8% 20.5% 19.6% North China % 6.6% % Northeast China 4.1% 4.3% 4.5% 4.9% 5.1% Southwest China 3.2% 3.5% 3.7% 3.6% 3.7% Northwest China % 1.2% Source: Government of Macao Special Administrative Region Statistics and Census Service. Note*: South Central China includes Guangdong, Hunan, Hubei, Henan and, Guangxi; East China includes Fujian, Zhejiang, Jiangsu, Shanghai, Jiangxi, Shandong and Anhui; North China includes Beijing, Hebei, Shanxi, Inner Mongolia and Tianjin; Northeast China includes Liaoning, Heilongjiang and Jilin; Southwest China includes Sichuan and Chongqing; Northwest China includes Shaanxi. See the last page for disclaimer Page 10 of 40

11 In 1H15, 47.9% of Macau s visitor arrivals entered at the Gongbei Border crossing in Zhuhai. Of all Macau visitors, 54.1% arrived by land, 39. by ferry boat and only 6.9% by air. A number of infrastructure projects are slated to be completed from 2015 to 2039 which will make for easier access to Macau. The expanded capacity for handling incoming travelers will help shorten time at the borders and encourage more tourist arrivals. Table-9: Macau Visitors by Entry Point H15 NUMBER OF VISITORS Gongbei Border Gate 14,161 13,591 14,250 15,574 7,030 Other land 1,139 1,239 1,568 1, By land 15,300 14,830 15,817 17,390 7,948 Outer Harbour 7,125 7,042 7,072 7,363 3,585 Inner Harbour Provisional Ferry Terminal in Taipa 3,422 3,902 3,982 4,244 1,997 By sea 11,021 11,485 11,558 12,081 5,727 Airport 1,656 1,739 1,907 2,027 1,008 Heliport (Outer Harbour) By air 1,682 1,768 1,950 2,055 1,014 Total 28,002 28,082 29,325 31,526 14,689 GROWTH Border Gate 17.8% % 9.3% -6.7% Other land 7.1% 8.8% 26.5% 15.8% 1.4% By land 16.9% -3.1% 6.7% 9.9% -5.8% Outer Harbour 10.3% -1.2% 0.4% 4.1% -0.4% Inner Harbour 35.2% 14.2% % -44.3% Provisional Ferry Terminal in Taipa -0.3% % 6.6% 0.8% By sea 7.6% 4.2% 0.6% 4.5% -2. Airport 2.8% % 6.3% 2.1% Heliport (Outer Harbour) 14.7% 12.1% 49.9% -34.7% -61.4% By air 2.9% 5.1% 10.3% 5.4% 1.1% Total 12.2% 0.3% 4.4% 7.5% -3.9% % OF TOTAL VISITORS Border Gate 50.6% 48.4% 48.6% 49.4% 47.9% Other land 4.1% 4.4% 5.3% 5.8% 6.2% By land 54.6% 52.8% 53.9% 55.2% 54.1% Outer Harbour 25.4% 25.1% 24.1% 23.4% 24.4% Inner Harbour 1.7% 1.9% 1.7% 1.5% 1. Provisional Ferry Terminal in Taipa 12.2% 13.9% 13.6% 13.5% 13.6% By sea 39.4% 40.9% 39.4% 38.3% 39. Airport 5.9% 6.2% 6.5% 6.4% 6.9% Heliport (Outer Harbour) 0.1% 0.1% 0.1% 0.1% 0. By air % 6.6% 6.5% 6.9% Source: Government of Macao Special Administrative Region Statistics and Census Service. See the last page for disclaimer Page 11 of 40

12 Planned Infrastructure Improvements The Macau Intercity Light Rail Transit is expected to partially open in When completed, the Macau Intercity Light Rail Transit (LRT) will run through the Macau Peninsula, Taipa and Cotai and access major border checkpoints such as the Gongbei Border crossing, the Outer Harbor Ferry Terminal, the Lotus Bridge and the Macau International Airport. It will also provide a convenient way to travel to all the major casino destinations both in the Macau Penninsula and in Cotai. After a number of delays, the new start date for only the phase one Cotai section of the LRT is now expected to be September 2017, according to the Transportation Infrastructure Office. No opening dates for the Macau Peninsula and Taipa section has been announced, but it is unlikely to open until after 2018 or Figure-13: Macau Intercity Light Rail Transit System We think the LRT is Macau's most important infrastructure development since intercity travel is a major bottleneck. Macau's 21.3 million visitors from mainland China in 2014 surpassed Macau's infrastructure capacity. Speaking at the Legislative Assembly in mid-april, Macau s Secretary for Social Affairs and Culture, Alexis Tam Chon Weng, said the city has the capacity to receive 21 million mainland visitors per year. That number could increase once the city s transport infrastructure is improved, including the Intercity Light Rail Transit. New and expanded border crossings won t do much good in driving incremental visitation to Macau if Macau s inter-city infrastructure is insufficient to handle more visitors. Source: Macau Transportation Infrastructure Office. The Pac On (or "Taipa") ferry terminal, expected to open in mid 2016, will have capacity of up to 15 million passengers per year, more than the total 12.1 million passengers who entered Macau by ferry at all harbors combined in Earlier this year, the Macau government hoped that the Pac On ferry terminal could open sometime this year, but it is now expected to open in mid The MOP3.2 billion (US$400.8 million) Pac On (also called "Taipa") Ferry Terminal is set to become Macau s largest ferry terminal. Construction began in 2005 and was first intended to be up and running by 2007, but has been delayed several times. Given the Macau government s track record of infrastructure project delays, we won't be surprised if it is delayed again past A scaled down temporary ferry terminal, located just beside the final Pac On ferry terminal s construction site, has serviced Taipa since The HK-Zhuhai-Macau Bridge, which could be completed as early as 2017 or 2018, will make for easier visitation from Zhuhai and Hong Kong (Hong Kong accounted for 20.4% of all entries into Macau in 2014). According to Chinahighway.com, by 2035 the HK-Zhuhai-Macau Bridge will handle 50,00 to 60,000 vehicles per day, allowing for 230,000 to 250,000 people to border-cross each day (84 million to 91 million per day). The under-construction Hong Kong-Zhuhai-Macau Bridge is a series of bridges and tunnels that will connect the west side of Hong Kong to Macau and to the mainland Chinese city of Zhuhai. It will shorten the distance from Hong Kong to Macau from 60 km to 30 km, and reduce the journey time to from ~3 hours currently to 1/2 an hour, for an estimated charge of RMB each way. Construction began on 15 December After a series of delays, it will most likely be further delayed until 2017 or even later, said Li Chunhong, the director general of Guangdong s Development and Reform Commission, according to the South China Morning Post. The Zhuhai-Macau New Channel pedestrian border crossing, which could be ready as early as 2016, would have a huge impact on easing congestion at the Gongbei border. The new 24 hour pedestrian border crossing, to be located in IIha Verde, would have capacity of up to 200,000 crossings per day, rivaling the 350,000 daily capacity at the Gongbei Border crossing. The New Channel was first announced in May 2012, and is to be located at the North-West end of Macau, just 800 meters from the Gongbei Border crossing at the North-East end of Macau. The New Channel crossing would be for See the last page for disclaimer Page 12 of 40

13 pedestrians only and not have facilities for vehicles. The completion date has not been determined but construction is expected to begin this year. Obstacles to construction remain, including that currently there is a wholesale market at the proposed location of the crossing which would have to be relocated. Macau International Airport expected to increase capacity by 33% to 5 from 6 million to 8 or 9 million passengers per year in The Macau International Airport Company (CAM) will launch construction on an expansion to the airport this year, according to contruction-post.com. CAM had previously announced plans to increase airport capacity by extending the passenger terminal. CAM expects the expansion to be completed in 2018, increasing airport capacity from 6 million passengers per year currently to 9 or 10 million. However, the current capacity for planes hasn t been saturated; there were only 2 million arrivals at the Macau Airport in The expansion is expected to allow for more airlines and flight routes. We think the airport expansion is Macau s least important infrastructure project since 1) only 6.4% of visitors arrived via the airport in 2014; and 2) only 2.0 million visitors arrived to Macau via the airport in 2014, meaning that current airport capacity of 6 million is more than sufficient. Table-10: Macau Planned Infrastructure Projects 2014 Capacity Planned Capacity Completion Macau Intercity Light Rail Transit - Cotai Section 0 n.a Macau Intercity Light Rail Transit - Macau Peninsula Section 0 n.a. Not Scheduled Pac On (Taipa) Ferry Terminal n.a. 15 million / Year Mid 2016 HK-Zhuhai-Macau Bridge 0 84 mn to 91 mn / year* Date 2017 / 2018 Zhuhai-Macau New Channel Pedestrian Border 0 200,000 / Day 2016 Macau International Airport 6 million / Year 8 to 9 mn / Year 2018 Source: Guotai Junan International. Note: * By 2035, the HK-Zhuhai-Macau Bridge is expected to handle 50,00 to 60,000 vehicles per day, allowing for 230,000 to 250,000 person-border crossings per day (84 million to 91 million per year). Gross Gaming Revenue We think weak Gross Gaming Revenue ("GGR") in June and July indicates that new casinos are failing to stimulate new gaming demand as was once hoped. After the May 27 grand opening of Galaxy Macau Phase II, Macau's June GGR declined by 14.7% MoM to MOP17.4 billion, the lowest amount since November July GGR was MOP18,615 million, down 34.5% YoY and up 7.3% MoM, which was in-line with market and our expectations but was the second lowest amount since January 2011 and was the 14th consecutive month with a YoY GGR decline. We think the lousy June and July GGR indicates that future casino openings, including Studio City, scheduled to open in 3Q15, will also fail to stimulate new gaming demand. Figure-14: Macau Total GGR and Growth (Monthly) GGR (L) YoY (R) MoM (R) MOP Mllion Historical High of MOP 38 B. on Feb ,000 35,000 30,000 25,000 20,000 15,000 10, Source: Gaming Inspection and Coordination Bureau of Macao SAR. See the last page for disclaimer Page 13 of 40

14 2Q15 GGR was MOP56,868 million, down 35.6% YoY and down 9.6% QoQ, worse than expected. Both the VIP and mass market segments continued to deteriorate, both YoY and QoQ. Macau s 2Q15 VIP GGR plunged by 42.2% YoY and fell by 16.2% QoQ to MOP 31,568 million. VIP GGR has declined sequentially every quarter since 2Q14. Macau s 2Q15 mass market GGR decreased by 30.2% YoY and fell by 6.7% QoQ to MOP 25,300 million. As with the VIP segment, mass market GGR has declined sequentially every quarter since 2Q14, although not as sharply as VIP. Figure-15: Macau Total, VIP & Mass GGR Growth (YoY) Mass (YoY) VIP (YoY) Total GGR (YoY) Figure-16: Macau Total, VIP & Mass GGR Growth (QoQ) Mass (QoQ) VIP (QoQ) Total GGR (QoQ) Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15F 4Q15F 1 5% -5% -1-15% - -25% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15F 4Q15F Source: Gaming Inspection and Coordination Bureau of Macao SAR, Guotai Junan International. Source: Gaming Inspection and Coordination Bureau of Macao SA, Guotai Junan International R. With weak June and July GGR indicating that new casinos are not attracting significant incremental gaming revenue, along with our expectation for a full smoking ban in casinos some time in 2016, we maintain our forecast for a 34.1% decline in 2015 GGR; maintain "Underperform" sector rating. We forecast a 2. MoM increase in Aug. GGR since historically, for the last seven years, GGR has increased MoM in August. We forecast flat GGR MoM growth for Sept. through Dec. See the last page for disclaimer Page 14 of 40

15 COMPANY History and Background Sands China (01928 HK, the "Company") completed its IPO in November 2009 and currently operates the largest collection of integrated casino resorts in Macao. The Company's subsidiary, Venetian Macao S.A. (also known as Venetian Macao Ltd.), holds one of six concessions or sub-concessions permitted by the Macao government to operate casinos or gaming areas in Macao. The Company also owns CotaiExpo, one of the largest convention and exhibition halls in Asia; Macao s largest entertainment venue, the Cotai Arena; and one of the two major high speed ferry companies operating between Hong Kong and Macao. Sands China currently owns and operates four casino resorts, namely, the Venetian Macao, Sands Cotai Central, Four Seasons Hotel Macao & Plaza Macao and Sands Macao. In addition, the Company is constructing its St. Regis hotel, the fourth hotel and mixed-use tower at Sands Cotai Central, and is also developing a fifth casino resort, the Parisian Macao, which could open as early as July As at December 31, 2014, the Company had 9,277 hotel rooms and suites, 19 Paiza Mansions, 125 restaurants, 1.5 million square feet of retail, 1.5 million square feet of meeting space, permanent theaters, a 15,000-seat arena and some of the world s largest casinos with a total of 1,535 gaming tables and 4,082 slot machines. Figure-17: Sands China's Casino Resorts Map Source: the Company. See the last page for disclaimer Page 15 of 40

16 Table-11: Sands China's Casino Resorts Facilities Property Venetian Macao Sands Cotai Central Plaza Macao Sands Macao Current Total Parisian Macao 2016 Total Opening dates 8/ * 8/2008 5/ Gaming tables , ** 1,685 Slot machines 1,857 1, ,082 2,500 6,582 Total gaming space (sq. ft.) 376, , , ,000 1,092,000 Unknown n.a. Paiza suites Paiza mansions Hotel rooms 2,841 5, ,162 3,000 12,162 Number of shops Number of restaurants Unknown 125*** Total retail (sq. ft.) 925, , ,000 16,000 1,529,000 Unknown 1,529,000*** MICE (sq. ft.) 1,200, ,000 25, ,548, ,000 2,000,000 Theater (seats) 1, ,450 Unknown 2,450*** Arena (seats) 15, ,000 Unknown 15,000*** Note: * Sands Cotai Central opened in three phases with phases 1-3 opening in April 2012, Sept and Jan. 2013, respectively. ** Parisian Macao has capacity for 400 gaming tables but we assume only 150 new tables will be granted by the Macao government. *** At least this much/many, but could be more depending on how many/much additional from the Parisian Macao. Chairman and CEO Sheldon Adelson pioneered the convention-centered approach in 1999 with the original Venetian in Las Vegas. Adelson has also been chairman and CEO of parent Company Las Vegas Sands Corp. (LVS US) or its predecessor company since April With the original Venetian in Las Vegas opened in 1999, Adelson pioneered the convention-centered approach. At the time, the traditional strategy was to keep hotel rooms minimal, so as to encourage guests to spend as much time as possible in the casino. Adelson, however, had all his hotel rooms made into luxury suites so that he could attract business from the Sands Expo and Convention Center to keep mid-week occupancy strong. This strategy proved correct, with LVS now making more money in Las Vegas from conventions than gambling. The convention-centered approach, once considered unorthodox, is now the paradigm in the casino industry in Las Vegas. Adelson was also among the first to foresee the gaming potential of Macau and later the Cotai Strip. With Sands Macao opened in 2004, Las Vegas Sands became the first American gaming company to open a casino in Macau. With one billion people within a three-hour flight of Macao and around three billion people estimated to live within a five-hour flight, Adelson envisioned creating not one casino-hotel, but establishing an entire strip, the "Cotai Strip" in Macao, featuring many casinos and hotels of various styles and price ranges. His company spearheaded the effort to reclaim the land to fill the bay between Macau's Coloane and Taipa islands. The Company's luxury and mid-market retail malls feature approximately 600 shops with well-known retail brands. Brands include Bottega Veneta, Brioni, Bulgari, Cartier, Chanel, Dior, Dolce and Gabbana, Giorgio Armani, Gucci, Hermès, Louis Vuitton, Marks and Spencer, Montblanc, Omega, Prada, Ralph Lauren, Saint Laurent, Tiffany & Co., Uniqlo, Valentino, Versace, Victoria s Secret and Zara. Sands China's ultimate plans for Cotai include several interconnected integrated resorts leveraging a wide range of branded hotel and resort offerings to attract different segments of the market. When fully completed, the Company's Cotai Strip development is expected to contain over 12,000 hotel rooms, nearly 2.0 million square feet of MICE ("Meetings, Incentives, Conferences and Exhibitions") space, approximately 2.0 million square feet of retail malls, theaters and other amenities. See the last page for disclaimer Page 16 of 40

17 Non-Casino Businesses The Company's transportation operations consist of its high-speed "CotaiJet" ferry service between Hong Kong and Macao, "CotaiLimo" service, "CotaiShuttle" bus service, airplane service for VIP and premium players, and a travel agency. "CotaiJet" ferry service has the ability to run its 14 ferries on 15-minute intervals as needed to meet demand. In November 2007, the Company launched its high-speed CotaiJet ferry service between the Hong Kong Macao Ferry Terminal and the Taipa Temporary Ferry Terminal near the Company's Cotai Strip development. The Company transferred approximately 21,300 passengers per day for the year ended December 31, 2014, an increase of 5% compared with In 2014, the Company provided an average of approximately 44 daily round trip sailings between Macao and Hong Kong. "CotaiLimo" service fleet consists of 107 limousines. It operates 24 hours per day and includes three signature brand vehicles (a Maybach 62, a Bentley Arnage and six Rolls-Royce Phantom EWB), which are provided on an exclusive basis to VIP and premium players. Fleet deployment is managed through a centralized dispatch office for all pre-booked services, while additional vehicles are at various locations to provide on demand services. "CotaiShuttle" bus service operates a fleet of 168 (78 owned, 90 rented) complimentary shuttle buses. The shuttle buses transport passengers between the Company's properties and the Macao's various ferry terminals as well as the airport every five to ten minutes during peak periods. These shuttle buses are also supported by an additional 30 coaches to serve increased demand. The CotaiShuttle also runs to and from two border checkpoints with mainland China, the Gongbei Border Gate and the Lotus Flower Bridge, transporting visitors directly to and between the Company's properties every five to eight minutes during peak periods. The services between the Taipa Temporary Ferry Terminal and the Company's properties operate 24 hours per day. In 2014, 17.6 million passengers arrived at The Venetian Macao, Sands Cotai Central, Four Seasons Hotel Macao & Plaza Macao and Sands Macao on the Company's complimentary shuttle bus service, up 7% compared to In addition, a complimentary shuttle bus service operates between the Company's Cotai properties and Galaxy Macao. All of these routes maintain a regular schedule. Most routes operate for a minimum of 16 hours every day. The Company has access to a fleet of 18 corporate airplanes, six of which are currently stationed permanently in Asia. Through a shared services agreement with parent company Las Vegas Sands Corp. (LVS US), the Company can deploy these airplanes to bring VIP and premium players from around the globe to its properties in Macao. "CotaiTicketing" provides all ticketing requirements for events and services at all of the Company's properties. Established in 2007, CotaiTicketing currently sells tickets for the Cotai Arena, and events at Venetian Theatre, Sands Theatre, Venetian Ballroom, Sands Cotai Central Ballroom and Venetian pool-side, as well as gondola rides and the CotaiJet ferry. The Company's CotaiTicketing operations consist of seven box office locations across all properties and a call center based in Macao with three language options and Macao and Hong Kong direct phone numbers. "CotaiTravel" is Sands China's travel agency. The Company has developed partnerships with a large number of tour and travel companies throughout Asia to assist with reservations and booking for travel to Macao and for various shows and other activities and entertainment amenities at the Company's properties. See the last page for disclaimer Page 17 of 40

18 Casino Properties The Venetian Macao Opened in August 2007, the Venetian Macao has the most visited hotel in Macau and had 376,000 square feet of casino areas with 598 table games and 1,857 slot machines as at December 31, The Venetian Macao features a 39-floor five-star hotel tower with 2,841 standard hotel suites and 64 Paiza suites, which range from 2,300 to 8,000 square feet and which each offers a living room, a dining room, at least two bedrooms and private concierge service. Some larger suites include a private massage room, gym, pool and media/karaoke room. The Venetian Macao is the Company's anchor property, and is located in the Cotai Strip, three kilometers from the Taipa Temporary Ferry Terminal. The mass market gaming floor is divided into four uniquely designed areas: Red Dragon, Golden Fish, Phoenix and Imperial House. The Venetian Macao, with a theme similar to that of The Venetian Las Vegas, features replicas of many famous sites in Venice, Italy. During 2014, The Venetian Macao had approximately 31.6 million visitors, up 2.9% from The Venetian Macao has over 900,000 sq.ft of retail space, a 1.2 million sq.ft. convention center, the 15,000-seat "Cotai Arena" and a 1,800-seat theater. Retail and dining areas at the Shoppes at Venetian include more than 330 stores and over 50 world-class restaurants set along streetscapes reminiscent of historical Venice. In addition, The Venetian Macao features a convention center and meeting room complex of approximately 1.2 million square feet that can be configured to provide small, mid-size or large meeting rooms and/or accommodate large-scale multi-media events or trade shows. MICE events typically take place on weekdays, drawing traffic during the portion of the week when hotels and casinos normally experience lower demand. In 2014, the Company had 1.6 million MICE visitors and hosted 54 trade shows attracting 1.5 million visitors and 276 corporate groups with more than 80,000 delegates. Figure-18: The Venetian Macao Figure-19: The Venetian Macao, Interior Source: Source: Sands Cotai Central Sands Cotai Central, opened in April 2012, had 370,000 square feet of gaming space with 522 table games and 1,318 slot machines as at December 31, Located across the street from The Venetian Macao and Four Seasons & Plaza Macao, it is the Company's largest integrated resort on Cotai. It consists of three hotel towers including 636 five-star rooms and suites under the Conrad brand, 1,224 four-star rooms and suites under the Holiday Inn brand and 3,863 rooms and suites under the Sheraton brand. In April 2012, the Company opened the Conrad and Holiday Inn tower, a variety of retail offerings, more than 300,000 square feet of meeting space, several food and beverage establishments, along with the Himalaya casino and VIP gaming areas. In September 2012, the Company opened the first Sheraton tower featuring 1,796 rooms and suites, See the last page for disclaimer Page 18 of 40

19 the Pacifica casino and additional retail, entertainment, dining and meeting facilities. In January 2013, the Company opened the second Sheraton tower featuring an additional 2,067 rooms and suites. During 2014, Sands Cotai Central received 475 corporate groups with more than 105,000 delegates, and had a total of approximately 20.1 million visitors. The Company is constructing its St. Regis hotel, the fourth hotel and mixed-use tower at Sands Cotai Central. The St. Regis tower is expected to also have gaming areas and will be the final phase of Sands Cotai Central. Figure-20: Sands Cotai Central Figure-21: Sands Cotai Central, Casino Source: Source: Four Seasons Hotel Macao & Plaza Macao Four Seasons & Plaza Macao, opened in August 2008, had 105,000 square feet of gaming space with 141 table games and 147 slot machines as at December 31, The Plaza Macao is located adjacent to The Venetian Macao and includes the 360 room Four Seasons Hotel, the Plaza Casino, 19 Paiza Mansions, several food and beverage offerings, conference and banquet facilities and the Shoppes at Four Seasons, which comprise retail space of approximately 258,000 square feet and is connected to the Shoppes at Venetian. The ultra-exclusive Paiza Mansions at The Plaza Macao were completed and introduced to the VIP market in July During the year ended December 31, 2014, The Plaza Macao had a total of approximately 11.9 million visitors. The Plaza Macao will also feature an apart-hotel tower consisting of approximately 1.0 million square feet of luxury apart-hotel units and common areas, and is expected to be branded and serviced by Four Seasons. The Company has completed the structural work of the tower and is advancing its plan to monetize units within the apart-hotel tower. Figure-22: Four Seasons & Plaza Macao Source: Source: See the last page for disclaimer Page 19 of 40

20 Sands Macao Sands Macao, opened in May 2004, had 289 suites, 241,000 square feet of gaming space, 274 table games and 760 slot machines as at December 31, Sands Macao was the first Las Vegas-style casino in Macao and currently contains a mix of gaming areas for mass market, VIP and premium players, and entertainment and dining facilities. Sands Macao is situated on the Macao Peninsula near the Macao Maritime Ferry Terminal, on a waterfront parcel centrally located between the Gongbei border gate and the central business district in Macao. This location provides Sands Macao access to a large customer base, particularly the approximately 12.1 million visitors who arrived in Macao in 2014 by sea at either the Taipa Temporary Ferry Terminal, the inner harbor or the Macao Maritime Ferry Terminal. During 2014, Sands Macao had a total of 6.1 million visitors. Sands Macao also includes restaurants, spa facilities, entertainment areas and other amenities. Figure-23: Sands Macao Source: Source: The Parisian Macao The US$2.7 billion Parisian Macao is currently under construction and could open as early as July The Parisian Macao will have capacity for 2,500 slot machines and 450 gaming tables, although the actual number of additional tables granted by the Macao government is expected to be much less (for example, Galaxy Macau phase II opened in May 2015 with capacity for 500 gaming tables but was only granted permission for 150 new tables). The Parisian will have a hotel with over 3,000 rooms and suites as well as a retail mall, 5 scale replica Eiffel Tower, entertainment, dining and meeting facilities. The new resort will be connected to the Venetian Macao, Four Seasons & Plaza Macao and Sands Cotai Central through mall access and other pedestrian connectivity including a walkover bridge. During the Company's 2Q15 earnings call on July 22, Chairman Sheldon Adelson said "right now it looks like we're probably going to have an opening in about 12 months." Figure-24: Parisian Macao Source: the Company. Source: the Company. See the last page for disclaimer Page 20 of 40

21 With the completion of the St. Regis tower and the Parisian, the Company will have a total of: Almost 13,000 hotel rooms 4 inter-connected resorts (plus the non-connected Sands Macao) 4 shopping malls 840 retail stores 2,000,000 square feet of meeting and exhibition space 4 performance and event venues Figure-25: Cotai Properties & Development Map Source: the Company. See the last page for disclaimer Page 21 of 40

22 FINANCIAL ANALYSIS Revenue Sands China has the highest proportion of revenue from non-gaming among Macau casino operators. In 2014, 88% of Sands China's revenue came from its casino business. In 2014, mall operations and hotel rooms contributed 4. and 3.6% of total revenue, respectively; food and beverage contributed another 1.8% and convention, ferry, retail and other combined contributed 2.5% of total revenue. Besides generating revenue, the non-gaming businesses also act to attract more mass market patrons, who yield higher profit margins compared to the VIP segment. Among its properties and other operations, the Venetian Macao accounts for the largest share of revenue. The Venetian Macao, the Company's flagship property, accounted for 42% of all revenue in 2014, followed by Sands Cotai Central, which accounted for 32.6% of revenue in Figure-26: Sands China Revenue Breakdown by Business Figure-27: Sands China Revenue Breakdown by Property 42.2% Venetian % 2.5% 1.8% Casino Mall Hotel Rooms Other* F&B % 11.6% % Sands Cotai Central Sands Macao Plaza Macao 12.2% Ferry & Other Note *: Other includes Net Convention, Ferry, Retail & Other Revenue Sands China focuses more on the high margin mass market than the VIP segment. While the Company does not disclose its gaming table allocation to the mass vs. VIP segments, we can see that compared to its share of total gaming tables in Macau, Sands China generates a disproportionately high amount of mass market GGR and lower proportions of VIP and total GGR. For example In 2014, Sands China operated 26.9% of all gaming tables in Macao but garnered 31.9% of all mass market table GGR, but generated just 17. of VIP GGR and 21.7% of total GGR. Figure-28: Gaming Table & Slots Share Sands China Total Slots Share Sands China Total Table Share 45% 4 35% 3 25% 15% 1 5% 22.6% 21.8% 29.9% 37.7% 37.4% 38.5% 34.6% 25.5% 26.3% 26.8% 26.9% Q15 2Q15 Figure-29: GGR, VIP & Mass Market Share Sands China Total GGR Market Share Sands China VIP GGR Market Share 4 Sands China Mass Tables GGR Market Share % 31.2% 31.9% 30.6% % 26.4% 25% 21.7% 20.6% 21.4% 14.9% 20.4% 17.6% 15% 15.9% 17.2% % 12.3% 16.2% 5% Q15 2Q15 See the last page for disclaimer Page 22 of 40

23 The Company's mass market table revenues typically generate a gross margin that is approximately four times higher than that of VIP table revenues. Additionally, because mass market players do not receive extensive complimentary services, including provision of hotel rooms, meals or other products or services, they contribute significantly to non-gaming revenues. The mass market segment is expected to continue to be the best performing segment as a result of the introduction of more high-quality gaming facilities and non-gaming amenities into the market. We forecast total Company net revenue of US$7.102 billion, US$7.090 billion and US$8.199 billion, reflecting growth of -25.3%, -0.2% and 15.6%, respectively. With Galaxy Entertainment (00027)'s Galaxy Macau Phase II and Broadway opened on 27 May, and Melco Crown's Studio City expected to open in 3Q15, we expect revenue at the Company's casinos to drop in 2015 and for it to lose market share to the new casinos. With four competitor casinos being opened in 2016 (Wynn Palace, Louis XIII, MGM Cotai and SJM's Casino Jai Alai), we expect the Company's revenue to further decline in 2016 as it loses market share, although the loss will be partially offset by the opening of the Company's new casino resort, the Parisian Macao, in mid or late Figure-30: Sands China Net Revenue Net Revenue YoY US$ Million 10, % 9,000 8, % 7, % 6,000 5, % 7,102 4,000 3, % 2,000 1,000 8,908 9,505 7,090 8, A 2014A 2015F 2016F 2017F Figure-31: Sands China Net Casino Revenue Net Casino Revenue YoY US$ Million 9,000 8, % 7, % 6, % 5, % 4,000 5,829 3,000 2, % 1,000 7,905 8,362 5,668 6, A 2014A 2015F 2016F 2017F Sands China's total 2014 net revenue increased by 6.7% YoY to US$9,505.2 million, compared to the 2.6% decrease in Macao's total GGR for the same period. Net revenues increased in all segments, mainly driven by an increase in visitation resulting from efforts in marketing and management s focus on driving the high-margin mass market gaming segment, while continuing to provide luxury amenities and high service levels to VIP and premium players net casino revenues increased 5.8% YoY to US$8,361.7 million, despite the challenging market environment, especially in the VIP segment. The increase was primarily attributable to an increase of US$358.8 million at Sands Cotai Central and an increase of US$134.4 million at The Venetian Macao, which were driven by increases in mass market business, partially offset by decreases in VIP rolling chip volume due to decreased demand in the VIP market. Net mall revenues for 2014 were US$380.4 million, up 17.3% YoY. The increase was primarily driven by higher base fees due to contract renewals and replacements, as well as additional stores opened at Sands Cotai Central in June 2014 and the reopening of remodeled stores at the Plaza Macao. Net room revenues for 2014 were US$346.4 million, an increase 11.5% YoY. The increase was primarily driven by business ramp up at Sands Cotai Central. See the last page for disclaimer Page 23 of 40

24 Figure-32: Sands China Net Mall Revenue Net Mall Revenue YoY US$ Million % % 13.2% 13.6% A 2014A 2015F 2016F 2017F 18% 16% 14% 12% 1 8% 6% 4% 2% Figure-33: Sands China Net Room Revenue Net Hotel Rooms Revene US$ Million % % 9.6% % 2013A 2014A 2015F 2016F 2017F YoY 4 35% 3 25% 15% 1 5% Net convention, ferry, retail and other revenues for 2014 were US$241.6 million, up 12.4% YoY. The increase was primarily due to increases in entertainment revenue from the events at the Cotai Arena and ferry revenue driven by increases in ticket sales volume and ticket prices net food and beverage revenues increased 14.3% YoY to US$175.1 million. The increase was primarily due to business ramp up at Sands Cotai Central. Food and beverage outlets in other properties also experienced better performance as a result of increased property visitation. Figure-34: Sands China Net Convention, Ferry, Retail & Other Revenue Net Convention, Ferry, Retail & Other Revenue YoY US$ Million % 13.5% % 14% 11.3% 11.7% % % 8% 150 6% 100 4% 50 2% A 2014A 2015F 2016F 2017F Figure-35: Sands China Net Food & Beverage Revenue Net Food & Beverage Revenue US$ Million % % 11.2% 11.6% 13.4% 2013A 2014A 2015F 2016F 2017F YoY 5 45% 4 35% 3 25% 15% 1 5% See the last page for disclaimer Page 24 of 40

25 Casino Property Revenue Forecasts Table-12: The Venetian Macao US$ Million 2013A 2014A 2015F 2016F 2017F Number of Tables Rolling Chip Turnover 54,420 47,871 31,333 28,812 29,296 Rolling Chip Win % VIP Win 1,807 1, Non-Rolling Chip Drop 7,201 8,961 6,881 6,330 6,436 Non-Rolling Chip Win % Non-Rolling Chip Win 1,930 2,258 1,770 1,646 1,673 Number of Slot Machines 1,953 1,857 1,857 1,857 1,857 Slot Machine Handle 4,782 5,565 3,971 3,674 3,735 Slot Machine Win % Slot Machine Win Casino Gross Revenue 4,000 4,067 2,873 2,647 2,691 Commissions (614) (547) (520) (319) (324) Casino Revenue 3,385 3,520 2,353 2,328 2,367 YoY % -1.1% 1.7% Hotel Rooms 2,841 2,841 2,841 2,841 2,841 Available Rooms 2,784 2,784 2,784 2,784 2,784 Hotel Room Revenue Other Revenue Property Revenue 3,835 4,024 2,962 2,728 2,774 YoY 26.8% 4.9% -26.4% -7.9% 1.7% Table-13: Sands Cotai Central US$ Million 2013A 2014A 2015F 2016F 2017F Number of Tables Rolling Chip Turnover 61,074 46,861 20,510 18,219 18,525 Rolling Chip Win % VIP Win 1,625 1, Non-Rolling Chip Drop 5,374 7,433 6,017 5,521 5,614 Non-Rolling Chip Win % Non-Rolling Chip Win 1,209 1,620 1,321 1,237 1,257 Number of Slot Machines 1,493 1,318 1,318 1,318 1,318 Slot Machine Handle 5,686 7,630 6,129 5,664 5,759 Slot Machine Win % Slot Machine Win Casino Gross Revenue 3,055 3,331 2,143 1,960 1,993 Commissions (648) (564) (282) Casino Revenue 2,408 2,766 1,861 2,197 2,234 YoY 153.2% 14.9% -32.7% 18.1% 1.7% Hotel Rooms 5,723 5,723 5,723 5,723 5,723 Available Rooms 5,609 5,609 5,609 5,609 5,609 Hotel Room Revenue Other Revenue Property Revenue 2,679 3,106 2,417 2,460 2,502 YoY 156.3% 15.9% -22.2% 1.8% 1.7% See the last page for disclaimer Page 25 of 40

26 Table-14: Sands Macao US$ Million 2013A 2014A 2015F 2016F 2017F Number of Tables Rolling Chip Turnover 23,243 17,664 9,485 8,788 8,936 Rolling Chip Win % VIP Win Non-Rolling Chip Drop 3,489 3,938 3,089 2,903 2,952 Non-Rolling Chip Win % Non-Rolling Chip Win Number of Slot Machines Slot Machine Handle 2,699 3,236 2,676 2,486 2,528 Slot Machine Win % Slot Machine Win Casino Gross Revenue 1,439 1, Commissions (244) (226) (217) (120) (122) Casino Revenue 1,195 1, YoY -1.3% -5.1% % Hotel Rooms Available Rooms Hotel Room Revenue Other Revenue (0) (0) Property Revenue 1,227 1, YoY -1.3% -5.4% -22.9% -8.6% 1.7% Table-15: Four Seasons & Plaza Macao US$ Million 2013A 2014A 2015F 2016F 2017F Rolling Chip Turnover 39,281 27,073 16,459 15,782 16,046 Rolling Chip Win % VIP Win Non-Rolling Chip Drop 900 1,336 1,056 1,045 1,062 Non-Rolling Chip Win % Non-Rolling Chip Win Number of Slot Machines Slot Machine Handle Slot Machine Win % Slot Machine Win Casino Gross Revenue 1,263 1, Commissions (346) (330) (198) (192) (195) Casino Revenue YoY -5.7% 2.8% -40.3% -8.5% 1.7% Hotel Rooms Available Rooms Hotel Room Revenue Other Revenue Property Revenue 1,061 1, YoY % -7.7% 1.7% See the last page for disclaimer Page 26 of 40

27 Table-16: The Parisian Macao US$ Million 2013A 2014A 2015F 2016F 2017F Number of Tables Rolling Chip Turnover ,777 24,718 Rolling Chip Win % VIP Win Non-Rolling Chip Drop ,582 Non-Rolling Chip Win % Non-Rolling Chip Win Number of Slot Machines Slot Machine Handle Slot Machine Win % Slot Machine Win Casino Gross Revenue ,094 Commissions Casino Revenue ,094 YoY n.a % Hotel Rooms ,300 3,300 Available Rooms ,234 3,234 Hotel Room Revenue Other Revenue Property Revenue ,306 YoY n.a % See the last page for disclaimer Page 27 of 40

28 Operating Expenses Among the six Macao gaming operators, Sands China has consistently had the highest or second highest adjusted property EBITDA margin, reflecting its cost advantage. The Company leverages its scale of operations to create and maintain a cost advantage. Sands China benefits from lower unit costs due to the economies of scale in its operations. Opportunities for lower unit costs include lower utility costs; more efficient staffing of hotel and gaming operations; and centralized laundry, transportation, marketing and sales, and procurement. In addition, the Company's scale allows it to consolidate certain back office functions and, where appropriate, to relocate these functions to Zhuhai, China. Zhuhai labor rates are approximately one third of those in Macao. Figure-36: Macao Casino Operators' Adjusted Property EBITDA Margins Macau Avg. Sands China (01928 HK) Wynn Macau (01128 HK) Melco Crown (MPEL US) MGM China (02282 HK) Galaxy Ent. (00027 HK) SJM (00880 HK) % % 30.1% 3 1 Source: the Companies The Company's operating expenses consist of gaming tax, employee benefit expenses, depreciation and amortization, gaming promoter/agency commissions, inventories consumed and other expenses and losses. We expect the largest operating expense, the gaming tax, to remain steady at 39.4% of gross gaming revenue. The Company is required to pay a 35% gaming tax on gross gaming revenues, which represents net wins from casino operations. The Company must also pay an additional 4% of gross gaming win as public development and social related contributions. On a monthly basis, Sands China also makes certain variable and fixed payments to the Macao Government based on the number of slot machines and table games in its possession. All of these expenses are reported as Gaming tax. We expect employee benefit expense and other expenses to revenue ratio to increase in 2015 on lower labor supply and higher cost inflation. The Company's employee benefit expense ratio surged to 16.3% in 1Q15, compared to just 9.3% in 1Q14 and 11.3% for full year Macao is a laborer's market, with current unemployment at just 0.3%. We expect labor expense to continue to increase going forward as more casinos open, bringing more jobs and thus given laborers more bargaining power. The Company's other expenses ratio increased to 13.3% in 1Q15, compared to just 9. in 1Q14 and 9.6% for full year Other expenses consist mostly of utilities and operating supplies, advertising and promotions, contract labor and services, repairs and maintenance and other support services. Gaming promoter commissions were relatively stable at 0.21% and 0.23% of VIP turnover in 2013 and 2014, respectively. Gaming promoter commissions are calculated based on certain percentages of net gaming wins or VIP rolling chip amounts. Gaming promoters bring in VIP customers to casinos and loan them rolling chips. See the last page for disclaimer Page 28 of 40

29 Figure-37: Macao Unemployment Rate % Macao Unemployment Rate Source: Government of Macao Special Administrative Region, Statistics and Census Service. We forecast D&A to net revenue ratio of 6.1%, 6. and 7.2%, respectively. Total depreciation and amortization expense was equivalent to 5.6%, 5.5% and 7.7% of net revenue in 2013, 2014 and 1Q15, respectively. D&A expenses increased by 4.8% in 2014 and by 6.4% YoY in 1Q15 due to expansions and additions at Sands Cotai Central and The Venetian Macao. Since the Company's next major project, the Parisian Macao, isn't planned to go into operation until July 2016 at the earliest, we expect 2016 D&A expense to increase by just 5.7% YoY but to increase by 48.7% in 2017 as The Parisian Macao depreciates for the full year. We forecast total operating expense to net revenue ratio of 73.9%, 71.8% and 75.5%, respectively. We expect higher operating expense ratio in 2015 mainly due to higher employee and other expenses. After dipping somewhat in 2016, we expect operating expense ratio to increase substantially in 2017 as the Parisian Macao, expected to open in July 2016 at the earliest, will begin to depreciate for the full year. Figure-38: Sands China Operating Expenses to Revenue Ratios Gaming Tax Employees Other D&A Promoter Commissions Inventories 5 4 Figure-39: Sands China Total Operating Expenses to Revenue Ratio Total Operating Expenses 76% 75.5% 75% 74.3% 73.9% 74% 3 73% 72% 72.4% 71.8% 1 71% 2013A 2014A 2015F 2016F 2017F A 2014A 2015F 2016F 2017F See the last page for disclaimer Page 29 of 40

30 Non Operating Expenses We expect the Company to take on more debt and hence incur higher net interest expense in 2015 and 2016 to cover capex needs for the US$2.7 billion Parisian Macao. However, we expect total debt and net interest expense to decrease in 2017 since capex for the Parisian Macao will be done by 2016 and as operating cash flows can be used to pay down debt in The Company had negligible income tax expense of US$1.9 million and US$8.5 million in 2013 and 2014, respectively. Since 2004, the Company has been exempt from the Macao complementary tax on its gaming activities and has since been granted an extension through Figure-40: Sands China Net Finance Expense to Net Revenue Ratio Net Finance Expesne to Net Revenue Ratio Figure-41: Sands China Effective Tax Rate Efffective Tax Rate 6% 5% 4.2% 4.9% 4.8% 0.4% 0.3% 0.3% 0.3% 0.3% 4% 3% 3.3% 2.7% 0.3% 0.2% 2% 1% 0.1% 0.1% A 2014A 2015F 2016F 2017F 2013A 2014A 2015F 2016F 2017F Operating Income, EBITDA & Net Profit We forecast operating profit of US$1,851 million, US$1,996 million and US$2,013 million, representing growth of -29.5%, 7.8% and 0.8%, respectively. For 2015 we expect low revenue growth combined with higher operating expenses, including higher employee expenses. As a result, we forecast operating profit margin dropping from 27.6% in 2014 to 26.1% in The Company's adjusted EBITDA margin increased from 32.6% in 2013 to 34.3% in The increase was driven by revenue increases in all of the business segments, as a result of an increase in visitation, management s continued focus on driving the high-margin mass table and slot businesses while continuing to provide high service levels to VIP and premium players, and the integrated resort business model, which drove growth in the high-margin rooms, mall and other non-gaming businesses. In addition, management continued to focus on driving operational efficiencies throughout both gaming and non-gaming areas of the business, further improving adjusted EBITDA. Adjusted EBITDA is profit before: share-based compensation, pre-opening expense, depreciation and amortization, net foreign exchange gains/(losses), gain/(loss) on disposal of property and equipment, investment properties and intangible assets, fair value losses on financial assets at fair value through profit or loss, interest, loss on modification or early retirement of debt, income tax expense and corporate expense. Corporate expense is royalty fees for the use of trademarks and other intellectual property rights, management fees and other fees paid to parent company Las Vegas Sands (LVS US). Corporate expense in 2014 was US$60 million, equivalent to 1.8% of adjusted EBITDA,. We forecast adjusted EBITDA of US$2,322 million, US$2,375 million and US$2,812 million, representing growth of -28.8%, 2.3% and 18.4%, respectively. 1H15 adjusted EBITDA plunged by 63.1% YoY and 71.9% HoH while See the last page for disclaimer Page 30 of 40

31 adjusted EBITDA margin fell from 34.2% in 1H14 to 31.1% in 1H15. The deterioration in adjusted EBITDA was the result of a 35. decline in net revenue combined with higher operating costs. Adjusted EBITDA in declined at all of the Company's properties and businesses. We expect the Company's EBITDA margin to be under pressure in 2015 largely due to higher operating expenses, including employee costs. Figure-42: Sands China Operating Profit Figure-43: Sands China EBITDA Operating Profit YoY US$ Million 3, % 2,500 2,000 1, % 1, % 0.8% 1, % 500 2,290 2,624 1,996 2, A 2014A 2015F 2016F 2017F Adjusted EBITDA YoY US$ Million 3, % 3,000 2, % 18.4% 2, % 1,500 1, % 500 2,901 3,261 2,322 2,375 2, A 2014A 2015F 2016F 2017F We forecast net profit of US$1,771 million, US$1,896 million and US$1,913 million, representing growth of -30.5%, 7.1% and 0.9%, respectively. Profit for 2014 was US$2,547.7 million, an increase of 15. compared to However, we expect net profit to decline in 2015 due to decline in net revenue and also lower profit margin. After increasing in 2016, we expect net profit to be flat in 2017 on higher depreciation expense from the Parisian Macao. Figure-44: Sands China Net Profit Figure-45: Sands China Profit Margins Net Profit YoY US$ Million 3, % 2,500 2,000 1, ,771 1, % 7.1% 0.9% 500 2,215 2,548 1,896 1, A 2014A 2015F 2016F 2017F % 34% 32% 3 28% 26% 24% 22% Operating Profit Margin EBITDA Margin Net Profit Margin 34.3% 34.3% 33.5% 32.6% 32.7% 27.6% 28.2% 25.7% 26.1% 26.8% 26.7% 24.5% 24.9% 24.9% 23.3% 2013A 2014A 2015F 2016F 2017F Dividends We expect a stable dividend payout ratio of about 8 in 2015 since the Company can take on more debt to pay dividends while maintaining low net gearing. The Company maintained a stable dividend payout ratio of 81.1% in 2013 and 81.4% in At the same time, net gearing increased from just 4.7% in 2013 to 10.2% in While the Company does not have a dividend policy, we assume it will take on more debt in order to cover capex needs as well as to maintain a steady dividend payout ratio. We assume a payout ratio of 80. from 2015 to 2017, which (along with capex needs) pushes up net gearing to 26.8%, 35.8% and 26.4% in , well below the current sector average of 60.6% for Macau casino operators. See the last page for disclaimer Page 31 of 40

32 VALUATION The Macao gaming sector last closed at forward adjusted EV/EBITDA of 12.5x, which is an 11.6% discount to its historical average level of 14.1x. We think a Macao sector valuation discount relative to its historical average is warranted given the large expected decrease in Macao's GGR. The current sector valuation is well below its five year high of 18.4x, reached in January 2014, but also not as low as the five year low of 7.4x reached in July, The sector last closed with valuation at a 2.2% premium to U.S. casino operators, significantly less than historical average premium of 21.1%. We set Sands China's investment rating at "Neutral" with target price of HK$31.70, which is equivalent to 15.0x 2015 adjusted EV/EBITDA. Based on Bloomberg consensus forecasts, Sands China last closed at 14.1x forward adjusted EV/EBITDA, which is a 12.9% premium to the Macao peers group, more than the 4.9% historical average premium to Macau peers, but 4.9% less than its own historical average. Our target price is equivalent to 15.0x 2015 / 14.7x 2016 / 12.4x 2017 EV/adjusted EBITDA and is equivalent to 18.6x 2015 / 17.4x 2016 / 17.3x 2017 PE. Our target price is a 17.6% discount to our DCF derived NAV per share of HK$ Table-17: Gaming Sector Peers Comparison Company Stock Crncy Price M-Cap PE EV/Adjusted EBITDA ROE PB Code HKD mil Hist Avg Current Hist Avg Current 15F 15F Fwd Fwd 15F 16F 17F Fwd Fwd 15F 16F 17F (%) Macao Operators Galaxy Entertain HK HKD , Melco Crown-Adr MPEL US USD , Mgm China HK HKD , Sands China Ltd HK HKD , Sjm Holdings Ltd HK HKD , Wynn Macau Ltd HK HKD , Simple Average Weighted Average USA Operators Boyd Gaming Corp BYD US USD , Caesars Entertai CZR US USD , n.a. n.a n.a. n.a. n.a. n.a. n.a. n.a. Isle Of Capri ISLE US USD , Las Vegas Sands LVS US USD , Mgm Resorts Inte MGM US USD , Penn Natl Gaming PENN US USD , Simple Average Weighted Average Other - Listed Genting Singapor GENS SP SGD , Genting Malaysia GENM MK MYR , Bloomberry Res BLOOM PM PHP , Echo Entert Grp EGP AU AUD , Belle Corp BEL PM PHP , Simple Average Weighted Average Source: Bloomberg, Guotai Junan International. See the last page for disclaimer Page 32 of 40

33 Aug/10 Jan/11 Jun/11 Nov/11 Apr/12 Sep/12 Feb/13 Jul/13 Dec/13 May/ Oct/14 Mar/15 Aug/15 Aug/10 Jan/11 Jun/11 Nov/11 Apr/12 Sep/12 Feb/13 Jul/13 Dec/13 May/14 Oct/14 Mar/15 Aug/15 Table-18: DCF Valuation Risk Free Rate 1.8 Sum of PV FCFF (US$ mn) 15,106 Market Return 13.87% + PV Terminal Value (US$ mn) 26,840 Market Risk Premium 12.07% Enterprise Value (US$ mn) 41,946 Adj. Beta Net Debt/(cash) (US$ mn) 1,917 Equity Discount Rate 13.87% Equity Value (US$ mn) 40,029 After Tax Cost of Debt 4.8% Shares Outstanding (mn) 8,069.0 D/(D+E) 41.7% NAV per Share (US$) 4.96 E/(D+E) 58.3% Exchange Rate 7.75 WACC 10.1% NAV per Share (HK$) Long term growth rate 3. Source: Bloomberg, the Company, Guotai Junan International. Figure-46: Sands China's Forward PE BEst P/E Ratio (Curr Ann) Mean +1 ST. DEV. -1 ST. DEV Figure-47: Sands China's Forward EV/Adjusted EBITDA BEst EV / BEst EBITDA (Curr Ann) Mean +1 ST. DEV ST. DEV Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International. RISKS Downturn in Chinese economy or decrease in China's money supply. The Company might not secure extension of its gaming concession which expires in 2022, or the Macau government might exercises its redemption right in With U.S. listed Las Vegas Sands (LVS US) as the Sands China's majority shareholder, Sands China is subject to certain U.S. and Singapore gaming laws. Potential violations of the Foreign Corrupt Practices Act or Anti-Money Laundering Laws. Current gaming income tax exemption expires in 2018 and might not be extended. Change in P.R. China or Macau government policy and restrictions including possible visas limitations. See the last page for disclaimer Page 33 of 40

34 FINANCIAL STATEMENTS AND RATIOS Income Statement Year end Dec. 31 (US$ mn except EPS) 2013A 2014A 2015F 2016F 2017F The Venetian Macao 3,835 4,024 2,962 2,728 2,774 Sands Cotai Central 2,679 3,106 2,417 2,460 2,502 Sands Macao 1,227 1, Plaza Macao 1,061 1, The Parisian Macao ,306 Ferry and Other Operations Inter-segment revenues (23) (30) (30) (29) (29) Net Revenue 8,908 9,505 7,102 7,090 8,199 YoY 36.8% 6.7% (25.3%) (0.2%) 15.6% Gaming Tax (3,846) (3,950) (2,673) (2,556) (2,926) Employee Benefit Expenses (911) (1,075) (1,035) (993) (1,230) Depreciation And Amortization (499) (523) (415) (439) (652) Gaming Promoter/Agency Commissions (374) (317) (160) (162) (205) Inventories Consumed (90) (102) (93) (93) (107) Other Expenses (897) (914) (875) (851) (1,066) Total Operating Expenses (6,618) (6,881) (5,251) (5,094) (6,187) Operating (Loss)/Profit 2,290 2,624 1,851 1,996 2,013 YoY 78.8% 14.6% (29.5%) 7.8% 0.8% Net Interest Expense (73) (50) (65) (85) (86) Loss On Modification Or Early Retirement Of Debt 0 (18) (10) (10) (10) Profit Before Income Tax 2,217 2,556 1,776 1,901 1,916 Income Tax (Expenses)/Credits (2) (8) (6) (6) (6) Net Profit 2,215 2,548 1,770 1,894 1,910 YoY 79.2% 15. (30.5%) % Adjusted EBITDA 2,901 3,261 2,322 2,375 2,812 YoY 46.7% 12.4% (28.8%) 2.3% 18.4% Basic EPS (US$) YoY 79.1% 14.9% (30.6%) 6.9% 0.8% Diluted EPS (US$) YoY % (30.6%) 6.9% 0.8% Ratios 2013A 2014A 2015F 2016F 2017F Margins Effective Gaming Tax Rate 39.4% 39.4% 39.4% 39.4% 39.4% Operating Margin 25.7% 27.6% 26.1% 28.2% 24.5% Net Profit Margin 24.9% 26.8% 24.9% 26.7% 23.3% Adj. EBITDA Margin 32.6% 34.3% 32.7% 33.5% 34.3% Return Ratios ROA 20.3% 22.3% % 14.9% ROE 36.8% 39.6% 27.1% 28.4% 27.6% Return on Capital Invested 42.7% 36.9% 22.7% 20.9% 20.1% Liquidity & Leverage Leverage (i.e., Gearing) 53.7% 49.7% 66.7% 71.9% 61.1% Net Gearing 4.7% 10.2% 29.4% 43.4% 33.4% Interest Coverage Ratio % % % % % Current Ratio 195.7% 197.2% 215.1% 171.4% 152.6% See the last page for disclaimer Page 34 of 40

35 Balance Sheet As at Dec. 31 (US$ mn except BPS) 2013A 2014A 2015F 2016F 2017F Investment Properties 891 1,143 1,200 1,260 1,323 Property And Equipment, Net 6,723 6,913 8,051 9,041 8,964 Intangible Assets, Net Deferred Income Tax Assets Other Assets, Net Trade & Other Receivables & Prepayments, Net Total Non-Current Assets 7,682 8,153 9,339 10,393 10,386 Inventories Trade & Other Receivables & Prepayments, Net Restricted Cash Cash And Cash Equivalents 2,943 2,535 2,426 1,890 1,912 Total Current Assets 3,783 3,195 2,921 2,386 2,485 Total Assets 11,466 11,348 12,260 12,779 12,870 Trade And Other Payables Borrowings 3,023 3,194 4,200 4,600 4,000 Deferred income tax liabilities Total Non-Current Liabilities 3,083 3,298 4,285 4,685 4,094 Trade And Other Payables 1,724 1,608 1,202 1,200 1,387 Current Income Tax Liabilities Borrowings Total Current Liabilities 1,933 1,620 1,358 1,392 1,628 Total Liabilities 5,016 4,918 5,642 6,077 5,722 Total Shareholders' Equity 6,450 6,429 6,617 6,702 7,148 BPS (US$) Cash Flow Statement Year end Dec. 31 (US$ mn) 2013A 2014A 2015F 2016F 2017F Net Income 2,215 2,548 1,770 1,894 1,910 Depreciation & Amortization Other Non-Cash Adjustments Changes in Working Capital (262) (2) 120 Cash From Operations 3,079 3,224 1,944 2,361 2,685 Capital Expenditures (580) (720) (1,500) (1,366) (500) Addition to Investment Properties (21) (210) (57) (60) (63) Interest Received Other Investing Activities (10) (7) (155) (194) 0 Cash From Investing Activities (598) (917) (1,692) (1,600) (545) Dividends Paid (1,382) (2,601) (1,416) (1,515) (1,528) Change in Borrowings (31) (30) 1, (552) Proceeds from exercise of Share Options Other Financing Activities (88) (93) (112) (237) (64) Cash from Financing Activities (1,481) (2,713) (361) (1,292) (2,112) Net Changes in Cash 1,000 (406) (110) (535) 22 Year Beginning Cash 1,948 2,943 2,535 2,426 1,890 Effect of Exchange Rate (5) (2) Year End Cash 2,943 2,535 2,426 1,890 1,912 See the last page for disclaimer Page 35 of 40

36 APPENDIX Macau Gaming Operators Comparison Table-1: Macau Gaming Operators Adjusted Property EBITDA Margins Q15 2Q15 Galaxy Ent. (00027 HK) 14.3% 17.9% 19.6% 18.9% 16.8% n.a. Melco Crown (MPEL US) % 27.1% 26.8% 23.8% 21. MGM China (02282 HK) 23.4% 24.2% 24.5% 25.9% 23.6% 23.7% SJM (00880 HK) 8.8% 9.2% 9.3% 9.4% 8.6% 7.7% Sands China (01928 HK) % 32.3% 34.5% 29.8% 31.5% Wynn Macau (01128 HK) 31.6% 31.8% 32.8% 33.1% 30.1% 28.1% M-Cap Wt. Avg. 17.3% 18.3% 19.4% 19.5% 17.5% 13.2% Source: the Companies, Bloomberg. Table-2: Gross Gaming Revenue Market Share Q15 2Q15 Galaxy Ent. (00027 HK) 17.3% 20.4% 20.1% 24.5% 25.7% 30.1% Melco Crown (MPEL US) 15.9% 13.9% 14.3% 12.4% 14.4% 12.3% MGM China (02282 HK) 11.3% 10.6% 11.1% 10.6% % SJM (00880 HK) 28.1% 26.2% 24.6% 23.8% 23.7% 20.4% Sands China (01928 HK) 12.3% 15.9% 17.2% % 16.2% Wynn Macau (01128 HK) % 12.6% 11.7% 11.2% 11.5% VIP Galaxy Ent. (00027 HK) 7.8% % 13.8% 14.9% 8.5% Melco Crown (MPEL US) % 13.2% 13.7% 14.6% 15. MGM China (02282 HK) % % 8.8% SJM (00880 HK) 37.1% 32.3% 26.9% 24.9% 23.6% 25.2% Sands China (01928 HK) 25.4% 26.4% 31.2% 31.9% 30.6% 35. Wynn Macau (01128 HK) 10.7% 8.8% 7.6% 7.7% 8.5% 7.5% Mass Market (Tables) Galaxy Ent. (00027 HK) 7.7% 10.9% 11.8% 12.3% 12.3% 14.9% Melco Crown (MPEL US) 20.4% 17.5% 15.9% 12.2% 11.9% 12. MGM China (02282 HK) 13.9% 15.7% 15.5% 14.2% 14.5% 14.6% SJM (00880 HK) 26.4% 30.3% 34.1% 37.7% 37.2% 35.4% Sands China (01928 HK) 12.7% 11.2% 9.6% 9.3% % Wynn Macau (01128 HK) 18.8% 14.3% 13.1% 14.3% 13.1% 13.6% Slots Galaxy Ent. (00027 HK) % 20.3% 22.4% 23.2% 28.3% Melco Crown (MPEL US) 12.9% % % 12.3% MGM China (02282 HK) % 8.4% 8.3% 8.4% 8.1% SJM (00880 HK) 33.9% 30.9% 28.6% 26.3% % Sands China (01928 HK) 14.9% 17.6% 20.4% 21.7% 20.6% 21.4% Wynn Macau (01128 HK) 12.5% 10.5% 9.7% 9.2% % Gross Gaming Revenue Source: the Companies, Gaming Inspection and Coordination Bureau of Macao SAR. See the last page for disclaimer Page 36 of 40

37 Table-3: Share of Gaming Tables Q15 2Q15 Galaxy Ent. (00027 HK) 15.1% 13.7% 16.1% 15.9% % Melco Crown (MPEL US) % 10.8% 10.9% % MGM China (02282 HK) 8.1% 7.7% 7.3% 7.4% 7.4% 7.2% SJM (00880 HK) 33.8% 32.6% 30.9% 30.9% 30.5% 29.8% Sands China (01928 HK) 21.8% 25.5% 26.3% 26.8% 26.9% 26. Wynn Macau (01128 HK) 9.3% % 8.1% 8.2% 8.1% Macau Gaming Source: the Companies, Gaming Inspection and Coordination Bureau of Macao SAR. Table-4: Share of Slot Machines Q15 2Q15 Galaxy Ent. (00027 HK) 10.1% 9.2% 6.1% 15.7% 15.1% 25. Melco Crown (MPEL US) 22.8% 20.8% % 10.4% 8. MGM China (02282 HK) 7.8% 7.6% 9.2% 9.3% 8.9% 8.1% SJM (00880 HK) % 22.2% 22.1% % Sands China (01928 HK) 22.6% 29.9% 37.7% 37.4% 38.5% 34.6% Wynn Macau (01128 HK) 6.6% 5.6% 5.8% 5.3% 5.1% 5. Macau Gaming Source: the Companies, Gaming Inspection and Coordination Bureau of Macao SAR. See the last page for disclaimer Page 37 of 40

38 Macao Gaming s Historical Development Macao, the only jurisdiction in P.R. China where casinos are allowed, has more casinos than any other region in Asia and has been the world s largest gaming destination in terms of gross gaming revenue since The Macao Special Administrative Region of the PRC, with total area of only 28.2 sq km, was established on 20 December 1999 after more than 400 years of Portuguese administration. Located on the western side of the Pearl River Delta, 60 km across from Hong Kong to the east, bordered by Zhuhai in Guangdong province to the north and facing the South China Sea to the east and south, Macao is the only area in China where casinos are allowed by the government. STDM monopolized gaming from 1962 to Gaming was formally legalized in Macao in By the 1850s, there were more than two hundred Fantan stalls operating in Macao. By the late 19th century, gaming tax had already become the government s main source of income. In 1930, Hou Heng Company won Macao s first casino gaming monopoly concession, which was subsequently granted to Tai Heng Company in 1937 and expired at the end of 1961, when the concession became open for public bidding. With only the incumbent Tai Heng Company and a new company, Sociedade de Turismo e Diversões de Macao (STDM), bidding, STDM won the bidding and obtained the monopoly concession in For the next 40 years, STDM monopolized Macao s gaming market. In 2012, 88% of Macao s GDP and 83% of Macao s total public revenue came from gaming revenue. The government will collect about MOP140 billion (US$17.5 billion) in taxes and other levies on gaming in 2013, according to calculations by the Portuguese news agency Lusa using data for the 12 months ended on November 30. Lusa forecasts that the 35 percent direct tax on gross gaming revenue will bring in about MOP124.4 billion and other indirect taxes will bring in about MOP14.2 billion. Additionally, casino operators paid around MOP1 billion in licensing fees for gambling tables and slot machines in Macao casinos are in the Macao Peninsula and Cotai. Macao consists of four segments: 1) the Peninsula (9.3 sq. km) in the North, which borders Zhuhai, China; the Southern islands of 2) Taipa and 3) Coloane, which aren t really separate islands anymore since they are unified by 4) Cotai (5.6 sq. km.), the reclamation area connecting the two islands. Three bridges link the Peninsula to Taipa. Macao s casinos are all in the Peninsula, the historical gaming center, and Cotai, the new gaming center still under development. Figure-1: Macao Geography Source: Globe-trotter Macao-map.svg. See the last page for disclaimer Page 38 of 40