Company Name: BERJAYA SPORTS TOTO BHD
| Research House: HLG | Price Call: BUY | Target Price: 4.92 |
Stock Name: TRC
Company Name: TRC SYNERGY BHD
| Research House: HLG | Price Call: BUY | Target Price: 0.69 |
BToto (BUY)
Consistent On Jackpot, Falling on Lotto
'' BToto will be releasing its 2QFY12 results on 12th Dec (Mon). Its 4D Jackpot game has shown good performance with the ability to maintain at a range of RM1.5-2.1m sales per draw for the past 6 months since its launch. In average, 4D Jackpot sales per draw was RM1.7m.
'' To date, the market share for BToto's 4D Jackpot was 45.5% vs. Magnum's 54.5%. However, the impressive performance from 4D Jackpot has also resulted in higher-than-expected cannibalization on BToto's lotto games.
'' Our regression results showed that the impact has widened to circa RM500-600k per draw. Despite the larger-than-expected cannibalization, the 4D Jackpot would still have added RM1.1-1.2m per draw to overall non-4D sales.
'' Hence, we have lowered our assumption of RM1.3m net sales per draw under the 4D Jackpot previously to RM1.0m as the proxy to the larger-than-expected cannibalization on lotto games.
'' FY12-14 net profit forecast reduced 1-1.3% to reflect a more conservative view by factoring in the additional cannibalization on BToto's lotto games.
'' TP reduced to RM4.92 based on DCF. Maintain Buy given total potential return of 23%.
''
TRC Synergy (BUY)
2nd Putrajaya housing project
'' TRC has clinched a RM38.1m Putrajaya housing project from Putrajaya Holdings for the construction of 14 units 2-storey terrace house and 14 units 2-storey semi-D house at Precinct 14-3; and 72 units 2-storey terrace house at Precinct 14-6A.
'' The order is TRC's second housing project from Putrajaya Holdings in FY11 after bagging a similar job for semi-D homes in Precinct 8 during April, bringing its YTD order wins of >RM500m. Overall, total outstanding order book is estimated at ~RM1.47bn, translating to ~3.9x FY10's revenue and ~5.2x order book-to-market cap ratio.
'' We have cut FY11 earnings by another -7% to RM16.1m from RM17.4m previously while maintaining FY12-FY13 earnings.
'' The execution of the LRT project has been a steep learning curve for TRC. However, we maintain our BUY call with a TP of RM0.69 in view of its growing order book which is diversifying away from the LRT project and strong balance sheet with net cash of ~26 sen/share.
''
DRB Hicom (BUY)
DRB Hicom To Acquire Proton
'' According to Business Times, three parties have submitted a bid to Khazanah's stake in Proton. Among the bidders are DRB-Hicom and Naza. The price was believed to be in the range of RM6-7 per share.
'' Khazanah currently has 42.74% shares in Proton. Assuming Khazanah paring down its entire stake, the total cost is estimated to range RM1.41 -1.64bn.
'' Based on Proton's latest quarterly report, Proton's Book Value/share of RM9.81 and NTA/share of RM7.62.
'' We opined that DRB could harvest synergistic values by tying-up its existing business units with Proton. DRB already has existing close business relation with Proton (EON ' Proton Edar, Tanjung Malim land development).
'' DRB will be able to ride on Proton's existing automotive manufacturing license, effectively expanding its automotive value chain from the existing automotive assembly, distribution and sales.
'' However, we have upmost concern on the turnaround of Proton's 100% owned Lotus Group, which incurred huge losses and needed substantial capex for its turnaround plan.
'' We are unsure if there are covenants or conditions of the sales, which may impede DRB's flexibility in restructuring Proton.
'' Pricing and payment method could also become a concern given the potential of huge EPS dilution. However, it could be mitigated if Lotus is not part of the deal.
'' Forecasts remained unchanged. Maintain target price at RM2.90 (pending review) based on 20% discount to SOP.
''
KLCI: More sideways trading
'' The KLCI's powerful rebound of 4% last week has injected some optimism to our market. Nevertheless, with the sighting of three Doji stars and ahead of the EU summit, the KLCI is likely to trade sideways within the 100-d SMA (1473) and 200-d SMA range (1503).
UNIMECH: Upside targets at RM1.00-1.08
'' UNIMECH has been climbing steadily along the uptrend channel since its trough in mid Sep by overcoming resistance of 100-d SMA (RM0.81), 200-d SMA (RM0.83) and mid Bollinger band (RM0.85) levels. Resistance levels are RM0.94-1.00. Significant resistance is near RM1.05 (upper channel ' weekly chart). Supports are RM0.80-0.84. Cut loss below RM0.78. ''
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