PublicInvest maintains neutral on BToto

  • Analyst Reports
  • Thursday, 20 Sep 2018

KUALA LUMPUR: BERJAYA SPORTS TOTO BHD announced a 16.9% increase in 1QFY19 net profit to RM86.9mil mainly due to higher contribution from Malaysia's number forecasting operations on lower prize payout ratio. 

PublicInvest Research said in its results overview that the results accounted for 31% of its and consensus full-year estimates.

"However, we are retaining our earnings forecasts as we expect the prize payout ratio to fluctuate from quarter to quarter," it said.

The research house said it believes earnings growth will remains subdued in the long run given the structural issue of persistent competition from non-mainstream gaming operators. 

It added that it is unclear whether the new government would implement its proposal to reduce special draws by the number forecat operators in 2019.

"Based on our estimates, Btoto’s FY19F earnings will be reduced by 0.7% for every 1 special draw reduction," it said.

PublicInvest said Berjaya Sports Toto's future prospects even as yield remains attractive at 7%.

It maintained its neutral rating on the counter with a target price of RM2.62.
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