KUALA LUMPUR (March 22): RHB Research Institute is maintaining its forecast and discounted cashflow-based fair value of RM4.85 for Berjaya Sports Toto (BToto).
It said on Thursday the nine-month net profit ended Jan 31, 2012 was in line with expectations.
BToto declared a third interim single-tier dividend per share of 6.0 sen (3Q11: 6.0 sen), bringing the nine-month DPS to 22 sen versus its FY12 forecast of 25 sen.
“We maintain our dividend payout projections at 80%-85%, which translate to net yields of 5.5% to 6.5% per annum,” it said.
RHB Research said although it agrees with the management’s view that it would be able to grow lotto sales by strong double digits in FY04/12 (9MFY12: up 82.4% on-year),it believed its target of growing 4D sales by single digits was not as achievable.
The research said this was because that up to the nine-month period, 4D sales registered a 1.1% on-year decline, possibly due to cannibalisation from the 4D jackpot game.
“We estimate BToto’s 3Q lotto sales contributed 17.2% of total sales (vs. 15.9% in the 2Q),” it said.
“Given our more upbeat outlook on the economy, we believe BToto’s defensive qualities may no longer appeal to investors who are now looking for higher beta stocks.
“We believe earnings prospects from the 4D jackpot have already largely been reflected in its share price and consensus estimates. Maintain Market Perform,” said RHB Research.
It said on Thursday the nine-month net profit ended Jan 31, 2012 was in line with expectations.
BToto declared a third interim single-tier dividend per share of 6.0 sen (3Q11: 6.0 sen), bringing the nine-month DPS to 22 sen versus its FY12 forecast of 25 sen.
“We maintain our dividend payout projections at 80%-85%, which translate to net yields of 5.5% to 6.5% per annum,” it said.
RHB Research said although it agrees with the management’s view that it would be able to grow lotto sales by strong double digits in FY04/12 (9MFY12: up 82.4% on-year),it believed its target of growing 4D sales by single digits was not as achievable.
The research said this was because that up to the nine-month period, 4D sales registered a 1.1% on-year decline, possibly due to cannibalisation from the 4D jackpot game.
“We estimate BToto’s 3Q lotto sales contributed 17.2% of total sales (vs. 15.9% in the 2Q),” it said.
“Given our more upbeat outlook on the economy, we believe BToto’s defensive qualities may no longer appeal to investors who are now looking for higher beta stocks.
“We believe earnings prospects from the 4D jackpot have already largely been reflected in its share price and consensus estimates. Maintain Market Perform,” said RHB Research.
