Las Vegas Sands to Break Ground in Hengqin (Update1)
Written on January 15, 2007 by admin
“Contrary to earlier reports, it seems that approval still has to be given to Las Vegas Sands. Shares of casino operator Las Vegas Sands Corp. have shot up on a misleading report that the Chinese government had given the green light to a Sands resort complex on an island neighboring the gambling enclave of Macau.
Las Vegas Sands, the world’s biggest casino-operator by value, said a Chinese city government has set up a committee to review a planned $2 billion resort on an island near Macao.
The liaison committee, set up by the government of Zhuhai, next to Macao, will help “advance” the development of Las Vegas Sands’ resort on Hengqin Island, the company said Thursday in a statement released through PRNewswire. The resort still requires government approval, it said, describing the move as a “positive step forward.”
It seems that Las Vegas Sands now have received to the long-awaited approval to start development on Hengqin Island. In fact they have already started the infrastructure works some time ago.
Shares of Las Vegas Sands Corp., the world’s largest casino company by market value, hit a record after Jefferies & Co. said the company was granted the rights to build a hotel complex on China’s Hengqin Island.
Unnamed Las Vegas Sands executives told Jefferies analysts that they hope to break ground before Chinese New Year on Feb. 14 on a development that includes condominiums and hotels, Lawrence Klatzkin of New York-based Jeffries wrote today.
Hengqin is located near Macau, the only region in China where gambling is legal and site of the company’s Sands Macao. The casino operator plans to spend $2 billion there over the next five years as it expands in Asia. Sands President William Weidner told analysts in November Chinese government approval was in its final stage with word expected by the end of 2006.
Sands spokesman Ron Reese didn’t reply to a telephone call or an e-mail seeking confirmation of the Jefferies report.
Shares of the Las Vegas-based company rose $10.42, or 11 percent, to $102.80 at 4 p.m. in composite trading on the New York Stock Exchange. The stock more than doubled in 2006.
The planned 2,000-acre complex to be built over 11 years is worth $34 a share, Klatzkin wrote today, reiterating an earlier valuation. He rates the shares as “buy.” In late November, the New York-based analyst raised his price target on Sands to $124.50.
“After speaking with management today, we learned that LVS was officially granted the right to develop Hengqin Island, as we expected,” Klatzkin wrote. “Management indicated they are hoping to break ground before the Chinese New Year.”
Third-quarter revenue increased 39 percent at the Sands Macao, the first U.S. casino to open in China, and climbed 11 percent at the Venetian Resort Hotel Casino, its flagship Las Vegas property.
Billionaire Chief Executive Officer Sheldon Adelson plans to build another 20,000-room project in Macau as well as open the first casino in Singapore.
Source | Bloomberg
Technorati Tags: macao, macau, sands macao
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