Inside Asian Gaming

October 2011 | INSIDE ASIAN GAMING 13 mass, VIP); better slot offering that appeals to Chinese customers, etc. • Growth in the mass-market segment, which carries about 40% margins, compared with the VIP business’s 10%. • Growth in non-gaming businesses, such as hotels, retail, dining and other entertainment, which carry wider margins than VIP and have a high fixed- cost base. • More powerful operating leverage across mass and non-gaming segments. Note that the VIP business does not have very high operating leverage given the high taxes and commission rates. • Improvement in operational-cost efficiency. • Low financial leverage, especially now versus during the global financial crisis. This will support faster growth at the net profit level. Property Ebitda, 11CL Property ROIC, 11CL Source: CLSA Asia-Pacific Markets Macau casino Cagrs Source: Companies, CLSA Asia-Pacific Markets Sands Macao, the first American-built casino in Macau, has the highest ROIC of 133% in 11CL. CLSA Market Outlook