Morgan Stanley questions Sands China’s ability to convert volume gains into profit growth
The brokerage says Sands China’s second-quarter market share gains and higher gaming volumes continue to be offset by EBITDA margin pressure.
Macau.- Morgan Stanley has raises concerns about margins following Sands China’s second-quarter 2026 results. In a note following the earnings release, analysts Praveen Choudhary and Anson Lee said Sands China’s reinvestment strategy had yet to translate into sustained EBITDA share gains.
Sands China posted mass gross gaming revenue (GGR) growth of 8 per cent year-over-year in the second quarter, outperforming the overall market growth of 4 per cent. Total GGR rose 4 per cent while the wider market remained broadly flat, with the operator also capturing a leading 26 per cent share of VIP rolling chip volume.
However, analysts wrote: “We don’t see Sands gaining EBITDA share consistently despite intense reinvestment since June 2025.”
Sands China’s net revenue for Q2 was US$1.78bn, down 0.8 per cent. Net income declined 50 per cent to US$107m, while adjusted property EBITDA fell from US$566m to US$430m. Parent company Las Vegas Sands attributed part of the decline to exceptionally weak VIP rolling hold of 1.35 per cent during the quarter, noting that Macau EBITDA would have reached US$517m under normalised hold conditions.
Morgan Stanley downgraded Sands China’s stock to equal weight in June after downgrading the Macau industry in March.
