I've never seen maybank's analysis of stocks, realized in the stock market. So it's all rubbish. If sptoto can fall again, you buy more. dividen yield 2 times with FD rate
Gaming industries are shaky as conservative political parties won more votes in the last general election. An additional state, Kedah has banned all legal 4D outlets in the State. Investors are cautious about what will the future be for gaming industries in the country. Genting Bhd, for example, has aggressively planned its casino business expansion to overseas, including the bidding for a new casino in New York.
We maintain OVERWEIGHT on the gaming sector as leisure travel normalises post the pandemic. Tourism Malaysia projects 16.1m tourist arrivals in Malaysia in 2023, up 60% from 10.1m in 2022. Over the causeway, the Singapore Tourism Board expects a big jump in visitor arrivals to the island republic of 12m-14m this year over 4.7m recorded last year, underpinned by the return of international tourists, especially those from China. This should benefit casino operators GENM (OP; TP: RM3.56) and GENS (Not Rated), as well as their parent company GENTING (OP: TP: RM5.86). Meanwhile, we project ticket sales of number forecast operators (NFOs) to return to 90% of pre-pandemic levels by end-2023. Largely domestically-driven, their earnings are less directly exposed to external headwinds. Our top picks for the sector are GENTING, being a proxy to the recovery of tourism in both Malaysia and Singapore, and SPTOTO (OP; TP: RM1.95) given its double-digit dividend yields.
• There is a business continuity concern for operations of NFOs in Selangor, Penang and Negri Sembilan in the event of a change in the state government post the state election, widely expected to be held in Jun 2023 (NFO operations have already been banned three other states due for the state election, i.e., Kelantan, Terengganu and Kedah). There is also concern over sustained high inflation eating into consumer disposable income affecting spending on betting games.
• The good news is that NFO ticket sales are mainly domestically-driven and therefore less directly exposed to external headwinds. We expect the ticket sales recovery to plateau at 80%-85% of pre-pandemic levels before slowly picking up to the 90% level by end-2023. We expect SPTOTO to have a stronger recovery path with ticket sales returning to 87% of pre-pandemic level by FY23 (FYE: June) and 90% by FY24, given the potential boost from a spike in ticket sales of lotto games in the event their jackpots snowball, while MAGNUM (OP; TP: RM1.39) may only see its ticket sales recovering to 78%/80% of the pre-pandemic level by FY23/FY24 as we expect the return of its customers, predominantly in the older-age group, to be gradual. Overall, we prefer SPTOTO to MAGNUM for the former’s stronger recovery of ticket sales and hence superior earnings.
Regulatory risk. Meanwhile, we rate the risk of casino and NFO licenses being revoked in Malaysia as low following the formation of a “unity” government led by a moderate Pakatan Harapan coalition.
Upcoming dividend of RM0.025 per share at 8.3% yield (March 28) Eligible shareholders must have bought the stock before 04 April 2023. Payment date: 21 April 2023. Payout ratio is a comfortable 49% and this is well supported by cash flows. Trailing yield: 8.3%. Within top quartile of Malaysian dividend payers (5.4%). Higher than average of industry peers (5.3%).
Tom Yam, the long term dividend yield of SPTOTO has probably dropped from the old days of paying 4 sen dividend 4 times a year or 16 sen per year. The lowest yearly dividend is 7 sen which is in 2022. The last 4 Quarter dividend sum is 9.5 sen. If SPTOTO can pay back dividends 4 times per year at 2.5 sen, total is 10 sen.
At RM1.43: - 10 sen dividend yield = 10/143 = 6.99% or nearly 7%. That's quite decent. - 7 sen minimum historical dividend yield = 7/143 = 4.90% which still beats FD.
This assumes SPTOTO share price is near bottom, and it probably is based on its 20 year share price history.
Market questions if SPTOTO could go back to its glory days. One doesn't buy SPTOTO in order to break-it up as its NAV is only 72 sen, lower than current price. One owns SPTOTO because of its dividend paying ability, it's business and license to generate profits consistently. However, in past 3 years, its ability to generate consistent dividend is questionable, its future outlook less certain than 5 years ago. Nevertheless, the lower price compensates for that less certain outlook. IF it can relive its glory days, then, current price is a good investment. IF not, then, it should still beat FD rates although slightly less clear (still majority odds) it should edge out EPF returns.
The ability to pay dividends for the last 3 years have to take in to account on the MCO lockdown which caused them to pause operations for a long time. There's already a recovery on the payout since last year. Only thing is whether when are they gonna fully recover to its pre-pandemic levels. IMHO.
The govt should nurture this goose that lays golden eggs instead of listening to certain religious quarters who claim that it's evil yet willing to turn a blind eye to egregious corruption.
If it's evil, the solution is simple - don't play the game & don't enjoy the revenue generated.
Let's ponder over the question of what is the possibility of change of govts in Selangor, Penang, and Negeri Sembilan? Maybank IB seem to have jumped the gun to signal that these states will fall and downgraded Sports Toto's rating to SELL.
At this price RM1.27, I am slowly adding. If price goes lower, will keep adding until I get a full position. Keep each stock a small % of your dividend portfolio and if you are wrong, it won't hurt you. If it pays 2 sen dividend every quarter, 8 sen per year, 8 / 1.27 = 6.3% which beats EPF already. Be patient.
States that do not allow outlets should not get their share of Federal money since they were responsible for reducing gaming revenue or else it amounts to taking gaming taxes from other states. It's haram. The ever wise omnipresent Man up there knows it and they know that he knows it.
The easy part is asking for handouts. The hard part is earning it.
allow TOTO/Magnum to sell online will help goverment to collect taxes, if not , illegal tax will flow to PAS-PN (that why they love to ban legit shop mah)
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....
speakup
26,985 posts
Posted by speakup > 2023-03-07 07:54 | Report Abuse
Last time Batik Man Jalil say Berjaya selling Sptoto, is it still on?