Journey to Wealth
Multi-Purpose - Ticket sales expected to recover in FY12F BUY
' Maintain BUY on Multi-Purpose Holdings Bhd (MPHB), with adownward revised RNAV-based fair value of RM3.60/share (vs. RM3.70/sharepreviously). We havereduced our assumption of ticket sales per draw growth from4% to 2% for FY12F.
' We remain positive on the group as we believe that thefall in ticket sales has bottomed.
' MPHB's FY11 net profit (including profits from discontinuedoperations but excluding gain on disposal of property) was within ourexpectation but fell 10% short of consensus. Included in the group's net profitwas a RM199.6mil gain on disposal of Menara Multi-Purpose.
' All of MPHB's core divisions reported improved earnings. Inspite of a decline in revenue, pre-tax profit of the gaming division rose 3.7%YoY to RM395.7mil in FY11.
' This was due to a lower prize payout in FY11. Prize payoutof about 66.3% in FY11 was 0.8 of a percentage point lower than the payout of67.1% in FY10.
' Revenue of the NFO division shrank 3.4% YoY to RM3.2bil inFY11. Number of draws amounted to 177 in FY11 compared with 175 in FY10. On aper draw basis, ticket sales declined 4.5% from RM20.5mil in FY10 to RM19.6mil inFY11.
' We attribute the slide in ticket sales to competition fromBerjaya Sports Toto's 4D jackpot, which was launched in June 2011 and the 6/58lotto game, which saw a run-up in the first prize winnings to RM57mil.
' Among all of MPHB's non-gaming divisions, thebestperforming was the insurance division, which recorded a 6.9% YoY increasein pre-tax profit in FY11. EBIT of the insurance division was RM63.1mil in FY11versus RM59.1mil in FY10.
' MPHB has declared a final gross DPS of 5 sen for FY11. This,coupled with interim gross DPS of 10 sen, brings total gross DPS to 15 sen(FY10: 9 sen), which implies a yield of 5.4%.
' We believe that MPHB would be using the bulk of the RM375milproceeds from the disposal of its building to pare down borrowings. Grossborrowings stood at RM2.5bil as at end-FY11 (FY10: RM2.2bil).
Source: AmeSecurities
Source: AmeSecurities
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
