Yahoo! Inc. (YHOO), Yum! Brands, Inc. (YUM), Las Vegas Sands Corp. (LVS): If China Is Really Crashing, These US Companies Could Be Crushed

Shares of Yum! Brands, Inc. (NYSE:YUM) have been highly volatile over the last year, as criticism from Chinese health officials coupled with bird flu scares have sent shares tumbling as much as 17%.

Yum! Brands, Inc. (NYSE:YUM) other major fast food chain, Taco Bell, has been performing well in the US. The company continues to ride high on its Doritos Locos Taco, perhaps the single most successful fast food item ever.

But ultimately, Yum! Brands, Inc. (NYSE:YUM) Chinese exposure cannot be overlooked. No matter how well Taco Bell is doing in the US, KFC’s Chinese exposure may be too much to overcome. If China crashes, Yum! Brands could crash with it.

Las Vegas Sands Corp. (NYSE:LVS) has big exposure to Macau

China’s Macau is the world’s largest casino market, surpassing Las Vegas in 2007. Las Vegas Sands Corp. (NYSE:LVS) owns The Venetian and The Palazzo on the Vegas strip, but its Chinese exposure might be far more crucial to the company’s performance.

Las Vegas Sands Corp. (NYSE:LVS) Sands’ Macau-based properties accounted for roughly 40% of the company’s adjusted property EBITDA (management’s preferred metric for gauging operating performance) in 2011.

Interestingly enough, while Chanos has bet heavily against Chinese property companies, he has said he’s hedged his bet with long positions on companies exposed to China’s gambling industry.

At any rate, it’s difficult to imagine the gambling industry doing well in the midst of a financial crisis.

Is this it for China?

For years, market observers have been calling for a Chinese economic collapse. To date, that hasn’t happened, but recent events have put that outcome back on the table.

Should that scenario play out, investors likely won’t do well holding Yahoo! Inc. (NASDAQ:YHOO), Yum! Brands, Inc. (NYSE:YUM) or Las Vegas Sands Corp. (NYSE:LVS) shares. All three companies are heavily exposed to the Chinese economy.

Salvatore “Sam” Mattera has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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