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Yes, this past week’s table revenues were awful. But that’s not the reason we like the Macau stocks on the short side. Following last week’s relief rally, which was totally predictable, valuations are full again and the most disconcerting issue – base mass trends are decidedly negative – is not well understood nor projected by the Street. Thus, even if GGR trends hold, the mix is unfavorable and Street estimated margins and EBITDA need to come down considerably for 2015 and especially 2016.

As we discussed in our Macau conference call/presentation on Friday, Sands China (LVS) looks most at risk:  it maintains the most exposure to base mass segment – biggest negative delta to current expectations and most targeted segment by upcoming Cotai supply – and LVS’s competitive positioning should outperform in good times and underperform in bad. It’s clear what environment Macau is in now.

Please see our detailed note: