Journey to Wealth
B Sports Toto - Healthy ticket sales growth
- Maintain a HOLD on Berjaya Sports Toto (BToto) with an unchanged DCF-based fair value of RM4.70/share.
- BToto's 1QFY13 results were in line with our expectations and consensus estimates as we expect the prize payout to increase in the following financial quarters. The group's net profit rose 20.2% YoY to RM110.7mil in 1QFY13, underpinned by an RM8.8mil gain on disposal of investments, 6.4% expansion in revenue and lower prize payout.
- BToto has received approvals from Bank Negara Malaysia and the Ministry of Finance to list its lottery operations in Singapore via a business trust.
- What are outstanding are approvals from the authorities in Singapore, BToto's shareholders and holders of the RM550mil medium-term notes.
- The listing of Sports Toto Malaysia-Trust (STM-Trust) is expected to take place at the end of the year. The IPO prospectus is targeted to be issued by 4Q2012. Upon receipt of proceeds from the listing of STM-Trust, BToto would pay out special or additional dividends of 40-50 sen/share.
- After the listing of STM-Trust, we estimate that BToto's FY14F net profit would decline 20% to 25% due to the increase in minority interest. BToto would be a holding company of STM-Trust. We have not factored in the impact of the listing of STM-Trust in our earnings forecasts yet.
- BToto's ticket sales per draw rose 6% YoY to RM17.7mil in 1QFY13. There were 44 draws each in 1QFY13 and 1QFY12.
- BToto's ticket sales per draw were robust due to a full quarter of earnings contributions from the 4D Jackpot game, which was launched in June 2011. Also, there was good response to the Power Toto 6/55 game. Currently, the first prize of the Supreme Toto 6/58 game is RM36.1mil.
- In comparison, Magnum Corporation's gross ticket sales per draw shrank 2.9% YoY in 1HFYE12/12.
- BToto's NFO operating profit climbed 13.7% YoY to RM117.2mil in 1QFY13 due to higher sales and a decrease in the prize payout ratio. We estimate the prize payout at 63.4% in 1QFY13 versus 64.4% in 1QFY12.
- On a QoQ basis, BToto's ticket sales were relatively flat in 1QFY13. There were 44 draws in 1QFY13 against 45 draws in 4QFY12. Prize payout slid from an estimated 66.4% in 4QFY12 to 63.4% in 1QFY13.
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....
