March 23, 2012

SP Setia ' Performed as usual

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: RHBPrice Call: HOLDTarget Price: 3.95

SP Setia ' Performed as usual                                                                              Market Perform
Results Note
-          1QFY12 net profit came in within our estimate but below market expectation. Lower qoq turnover growth was due to slower construction progress, while the improvement in PBT margin, driven by higher selling prices, mitigated the decline in earnings.
-          New sales amounted to RM1.23bn from Nov 2011 to Feb 2012. Taking into account the slew of projects in the pipeline, the company should be able to achieve its sales target of RM4bn.
-          Maintain Market Perform. Fair value is kept at RM3.95, based on 10% discount to RNAV.

Source: RHB Research 23 March 2012

Jaya Tiasa ' 9MFY04/12 core net profit rose by 24% YoY

Stock Name: JTIASA
Research House: RHBPrice Call: BUYTarget Price: 8.92

Jaya Tiasa ' 9MFY04/12 core net profit rose by 24% YoY                                             Outperform
Results Note
-          9MFY04/12 core net profit was below expectations. Key variances are mainly due to lower-than-expected FFB sales volume and lower average selling prices for log in 3QFY04/12.
-          We raised our target PER for Jaya Tiasa's plantation division to 15x (from 13x), in line with the recent upgrade in our target PER for the sector. We also remove the 10% discount in our SOP fair value given the proposed corporate exercises will improve the stock's trading liquidity. Post earnings revision, fair value for Jaya Tiasa is revised to RM8.92 (from RM7.80).
Source: RHB Research 23 March 2012

Glomac ' Strong performance driven by better margins

Stock Name: GLOMAC
Company Name: GLOMAC BHD
Research House: RHBPrice Call: BUYTarget Price: 0.96

Glomac ' Strong performance driven by better margins                                            Market Perform
Results/Briefing Note
-          3QFY12 net profit came in above expectations. A 2.75 sen interim dividend was declared.
-          In view of stronger profit margins, we raise our FY12-13 forecasts by 17-32%. We also revise up FY14 earnings projection by 25% to account for the contribution from the Sg Buloh land project.
-          As we impute the value contribution from the Sg. Buloh land, our fair value is raised to RM0.96, based on an unchanged 35% discount to RNAV. Maintain Market Perform.

Source: RHB Research 23 March 2012

SP Setia - Impacted by slower construction works Hold

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: AMMBPrice Call: HOLDTarget Price: 3.95

- SP Setia's 1QFY12 net profit came in at RM74mil which onlycovers 18% and 21% of our and consensus' estimates respectively. As expected nodividends were declared for the quarter.

- Although revenue slid by 5%, earnings jumped by 19% YoY toRM74mil due to strong GP margins of 30% (previously 25%) ' mainly attributableto strong selling prices and favourable product mix. 

- We believe our estimates are intact given that the grouphas a massive unbilled sales of RM3.9bil (1.8x FY11 revenue) and margins shouldalso be robust as they are realising strong property prices against attractiveland cost e.g. Setia Alam and Setia Eco Park's land cost at RM5-RM8psf.

- However on sequential basis, net profit dropped by 10%because of seasonal factor where construction works was affected by festiveseasons. Hence we are not changing our estimates as we expect net income torebound in the coming quarters underpinned by stronger progress billings.

- Setia broke another record where it generated highest evernew sales in a single quarter of RM933mil (versus RM735mil in 1QFY11) for1QFY12. 

- Latest set of figures also show that Setia already chalkedup a strong RM1.23bil (+23% YoY) in new sales for the first 4 months into thecurrent fiscal year. We believe its target of RM4bil is not a challenge giventhat 1/3 of this has already been secured by strong takeups at KL EcoCity. 

- Sales were driven by mostly from boutique offices from KLEco City and Fulton Lane in Melbourne apart from the bread and butter projectsfrom Setia Alam, Setia Eco Park and Setia Tropika.  

- Going forward, the group would be launching Setia EcoGlades in Cyberjaya, KL Eco City residential tower 1, 18 Woodsville ' maidenSingapore venture and 11 Brook Residences Penang. 

- We maintain our HOLD rating at this juncture with our fairvalue unchanged at RM3.95/share.

Source: AmeSecurities 

Multi-Purpose Holdings - On track towards paying more dividends Buy

Stock Name: MPHB
Research House: AMMBPrice Call: BUYTarget Price: 3.60

- Maintain BUY on Multi-Purpose Holdings Bhd (MPHB) with anunchanged fair value of RM3.60/share.

- We believe that the valuation disparity between MPHB and BerjayaSports Toto Bhd (BToto) would narrow as MPHB pays more dividends and transformsinto a purer gaming company. 

- We forecast MPHB's gross dividend yield at 6.1% in FY12F versusBToto's 6.8% for FYE4/13. On a per share basis, this translates into 17 sen forFY12F against 15 sen in FY11. MPHB's net dividend payout would be about 70% in FY12Fcompared to 45% in FY11.  

- MPHB and its subsidiary, Magnum Corporation Bhd are expectedto reduce their borrowings further, using operating cashflows from the NFOdivision and proceeds from the disposals of property assets.

- We believe that the group's net borrowings would decline fromRM982mil in FY11 to RM875mil in FY12F. Net gearing is estimated to ease from31.4% in FY11 to 27.1% in FY12F.

- This would allow the group's operating cashflows to be freedup for higher dividend payments.

- According to news reports, MPHB is in talks to sell Plaza Magnumat Jalan Pudu for RM54mil. After selling Plaza Magnum and Menara Multi-Purpose,MPHB still has hotel property assets left in its stable. 

- Net book value of the 'Flamingo by the Lake' Hotel at Ampang and  'Flamingo by the Beach' Hotel in Penang stoodat RM88mil as at end March 2011. 

- MPHB also has 4,852 acres of property landbank located in Penang,Johor and Klang Valley, which is not jointly developed with other propertydevelopers yet. Net book value of these landbank is about RM240mil.

- We believe that it would take time to dispose theinsurance and stockbroking divisions due to pricing issues. 

- The value of the insurance assets is expected to be higherthan the stockbroking division due to the former's operating profit of morethan RM50mil a year.   

- Based on a P/BV of 1.5x on an estimated net asset of RM330mil,the insurance division could command a net realisable value of RM495mil.   

EPMB (FV RM0.94- NEUTRAL) Company Update: Provides More Clarity on Acquisition

Stock Name: EPMB
Research House: OSKPrice Call: HOLDTarget Price: 0.94

EPMB's management reassured investors that it can cope withthe high net gearing position after acquiring Maju Expressway as its free cashflow is expected to be reinforced by a likely toll hike in 2013. We slashearnings by 45-58% on expectations that MEX will not be earnings accretiveuntil 2015. While we concur with management that the toll concession is apotential cash cow, EPMB would likely become an unappreciated counter in viewof the depressed margins arising from high interest and depreciation costs andthe fact that the acquisition does not jive with its core automotive business. Assuringconfidence.  Yesterday, EP Manufacturing(EPMB) organized an analyst briefing to address concerns and provide clarity onits recent proposal to acquire Maju Expressway (MEX). The key takeaways of thebriefing are as follows:

- EPMB emerged as the successful bidder, just bidding RM50mhigher than the next bidder which could possibly have been a government-linked investmentfund.

- As traffic growth will be aggressive over the next fewyears (at high teens) from the development of Putrajaya and Cyberjaya and withthe completion of KLIA2 by next year, management is confident that it can copewith the high net gearing position (of 435% up from 33% last year) as its cashflow will be strong. We concur with the management's view on this, but we areconcerned with the higher depreciation and interest costs depressing overallmargins. We estimate that free cash flow generated to be RM45m in FY13 andRM79.4m by FY12. As the toll matures in 10-15 years, free cash flow generatedwill be robust and will exceed RM250m annually.

- Management sees this as an attractive  investment opportunityas in  the  current political climate, building new tollinfrastructures will be an uphill task as this will involve navigating trickyissues related to politics and land acquisition.

- The toll hikes scheduled for 2013, 2018 and 2023 could notbe disclosed as per concession agreement. As EPMB is paying the full price, thepotential tariff hike could be higher than our earlier estimate of RM0.50 sento RM2.40 (from an average collection of RM1.90 per vehicle in the past 3years). We estimate a RM1 tariff increase in our DCF model for MEX.

- Management guided that earnings will only be accretive by2016 at the latest. With the toll hike coming next year (definitely afterelections), we expect MEX to only be profitable by 2014 and report a net incomeof RM7.2m by then.

- The potential opening of the  Seri Kembangan interchangewill be decided by  the government in thenext few months. There are signs that this is likely to go through judging fromthe strong demands by the public to ease traffic congestion in this area.

- Other than revenue from toll collections, advertising andrental collections from R & R outlets, there could be other ways to expandrevenue base.  

- Issuance of RM1.25bn and RM225m sukuk will have 20- and7-year maturities at 5-6%. Indicative rating at AA-, which is the same ratingon the current sukuk floated.

Source: OSK188 

Short Term Pain Long Term Gain

Stock Name: EPMB
Research House: TAPrice Call: SELLTarget Price: 0.89

On Expansion Mode

Stock Name: SCIENTX
Research House: TAPrice Call: HOLDTarget Price: 2.70

SP Setia (HOLD) - 1QFY12 net profit rose 20.9% yoy

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: HLGPrice Call: HOLDTarget Price: 3.95

SP Setia (HOLD)
  • SP Setia's 1QFY12 net profit rose 20.9% yoy, but declined 11.0% qoq toRM74.0m, making up only 17.5% and 20.7% of HLIB and consensus estimatesrespectively.  This was due to slower work progress in the festive period,and should strengthen from 2Q onwards.
  • As of 29th February 2012, cumulative sales for four months stood atRM1.23bn, implying run-rate of  RM3.7bn.  We re-iterate our view thattheir RM4.0bn sales target for this year remains achievable
  • Tan Sri Liew issued a joint statement with PNB to reassure the publicthat they will seek to restore the public shareholding spread back to 25%, butdid not provide further details.
  • Maintain HOLD and target price of RM3.95, which is the offerprice.
Source: HLIB Research 23 March 2012

GLOMAC - 9M FY12 net profit in-line with estimate

Stock Name: GLOMAC
Company Name: GLOMAC BHD
Research House: HLGPrice Call: HOLDTarget Price: 0.87

Glomac (HOLD)
  • Glomac's 9M FY12 net profit of RM63.5m was in-linewith HLIB estimate (77%), but ahead of consensus (81%). 
  • An interim net dividend of 2.1 sen was declared.
  • Their township projects have done well, on track tohit RM120m sales apiece for FY12. 
  • Their two key projects in Bandar Utama and MutiaraDamansara are slated to launched in March, with GDV of RM370m and RM270respectively.  Mutiara Damansara is fetching RM750 psf and has been 60%booked.  Centro @ Bandar Utama is priced from RM550psf onwards.
  • No change to our TP of RM0.87 (50% discount to RNAV).Maintain HOLD.  

Source: HLIB Research 23 March 2012

Genting Bhd (BUY) - Junket Programmes In RWS

Stock Name: GENTING
Company Name: GENTING BHD
Research House: HLGPrice Call: BUYTarget Price: 11.50

Genting Bhd (BUY)
Junket Programmes In RWS
  • According to Business Times Singapore, Casino Regulatory Authority (CRA)has awarded junket licenses to two Malaysians operators to allow casinooperators to extend their international reach.
  • The CRA is still evaluating other applications and isin the midst of conducting probity checks. It has rejected twelve applicationsso far.
  • With this official permits, these two Malaysianoperators will now be allowed to bring in high rollers to the casinos in RWSfor a commission. However, they are only allowed to bring in foreigners and notallowed to target the local community.
  • We expect GenS to be able to experience betterearnings growth going forward with the help of the recently-approved junketlicenses as it will bring in more customers into the casino, especially fromthe VIP segment, hence bring up its market share. MBS still does not haveaccess to licensed junkets.
  • No changes made to our forecast. Maintain BUYwith TP of RM11.50.

Source: HLIB Research 23 March 2012

SPSETIA - On track for growth

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: HWANGDBSPrice Call: HOLDTarget Price: 4.50

SP Setia; Hold; RM3.89
Price Target: RM4.50; SPSB MK

Results in line, earnings visibility underpinned by record unbilled sales and strong launch pipeline. Further landbanking supported by net cash & PNB-backing, potential placement to address public spread post- MGO. Maintain Hold and RM4.50 TP.

Source: HwangDBS Research 23 March 2012

Stock Overview - PERISAI - 23 Mar 2012

Stock Name: PERISAI
Research House: JUPITERPrice Call: BUYTarget Price: 0.95

PERISAI ( 0047 : 0.89 ) : Targeting 0.95-1.00


Resistance : 0.95 1.00
Support : 0.88

RSI of 48
RSI is neutral

It has just started to rebound from its oversold level

While it is hovering at a key support of 0.88, it is expected to recover to 0.95

Trading Strategy
Buy. Stop loss is at 0.88

Source: Jupiter Securities Research 23 March 2012

Stock Overview - CIMB - 23 Mar 2012

Stock Name: CIMB
Research House: JUPITERPrice Call: BUYTarget Price: 8.16

CIMB ( 1023 : 7.62 ) : Targeting 8.16


Resistance : 8.16
Support : 7.40

RSI of 65
RSI remains on uptrend

It is on an upswing

Following the recent consolidation breakout, it is targeting 8.16. Stop loss should be placed at 7.40

Trading Strategy
Buy. Stop loss is at 7.40

Source: Jupiter Securities Research 23 March 2012

Berjaya Sports Toto - MARKET PERFORM - 22Mar12

Stock Name: BJTOTO
Research House: KENANGAPrice Call: BUYTarget Price: 4.52

At RM310.5m, BToto's 9M12 net profit beat the consensus estimatesas it continued to  enjoy a relativelygood luck factor in 3Q12. The EPPR of 58.46% in 3Q12 was still below the 60%theoretical level. The stronger-thanexpected 3Q12 ticket sales, which leapt 13%QoQ, were mainly led by the CNY effect, higher average ticket sales and moredraw days during the quarter. We have upgraded our FY12 EPS forecast by 3% on alower EPPR assumption by 0.5% to 59% but keeping our FY13-FY14 estimates unchangedfor now. Nonetheless, despite the strong 3Q12 and the earnings upgrade, we aredowngrading BToto back to  a  MARKET PERFORM  rating  as it  is  now fairly  priced following the goodrun in the share price in the past three months. Our TP for the stock remainsat RM4.52/share. 

3Q12 above estimates.  Berjaya Sports Toto Bhd (BToto) reported yet againanother strong set of results where 3Q12 net profit rose 7% QoQ to RM112.7m,thanks to the luck factor coupled with solid ticket sales.  This brought its YTD 9M12 net profit toRM310.5m, which accounted for 80% and 78% of ours and the street's  FY12 full year estimates. The main discrepancybetween the actual result and our estimate is due to the 58.85% estimated prizepayout ratio  (EPPR) reported in 9M12 vs.our assumption of 59.5%. However, we view  the  strong 3Q12 ticket  sales as  in line due to the CNY effect and the higherdraw days.

' fuelled by luckfactor again.  Although 3Q12 EPPR hasincreased to 58.8% from 57.9% in the preceding quarter, it is still below thetheoretical  EPPR of 60%. This is thecompany's fifth straight quarter of being blessed with the good luck factorsince 3Q11 as the EPPR is still below or near to the theoretical level. As the3Q12 EPPR was higher QoQ (vs. 57.9%) and YoY (vs. 56.4%), the 3Q12 operatingmargin dipped slightly to 18.0% vs. 18.5% in 2Q12 and 20.3% in 3Q11.

Solid ticket sales onhigher draw days.  The CNY effect hadled to higher average ticket sales per draw in the quarter. The higher drawdays of 46 in 3Q12 vs. 43 draws each in both 2Q12 and 3Q11 had also boosted 3Q12total NFO ticket sales by 13%  QoQ and15% YoY respectively. The 3Q12 average ticket sales per draw of RM22.9m was 6%QoQ and 7% YoY higher, which we believe was due partly to the 4D Jackpot whichwas launched in June last year. 

Lower dividend payoutbut still decent. BToto declared a 6 sen net DPS (8.0% gross) in 3Q12, downfrom 8 sen net in the preceding quarter. This represents a 70.7% earningspayout, far below the 101.0% payout in 2Q12. YTD, it has declared a total  of 22 sen net DPS (29.3 sen gross), implyinga total dividend payout of 94.5%. As such, our assumption of a 30 sen gross inFY12 is highly likely to be conservative. 

FY12E EPS upgraded.  In view of the lower-than-expected EPPRreported in 9M12, we are upgrading our FY12E estimate by 3%. While we have loweredFY12 EPPR to 59% from 59.5%, we do expect lower ticket sales in 4Q12 as salesnormalise from the CNY effect and a lower draw day of 43 vs. 46 in 3Q12. Wehave meanwhile also upgraded our FY12 GDPS to 34 sen from 30 sen previously.Nonetheless, we are maintaining our FY13-FY14 estimates for now.

But downgraded toMARKET PERFORM. Despite having strong 3Q12 numbers and having upgraded ourearnings estimates, we are downgrading our call on BToto back to a MARKETPERFORM from an OUTPERFORM (upgraded on 13 Dec 2011) as it is now fairly pricedfollowing the good run in the share price in the past three months. We maintainour DCF-derived price target of RM4.52/share and continue to like BToto for itssustainable and attractive 7%-8% gross dividend yield.

Source: Kenanga 

Nestle - MARKET PERFORM - 22Mar12

Stock Name: NESTLE
Company Name: NESTLE (M) BHD
Research House: KENANGAPrice Call: BUYTarget Price: 58.00

We recently met up with Nestle's management and came back withour conviction strengthened that Nestle will continue to optimise returns toits shareholders. Despite all types of headwinds, the company has been able toconsistently improve its PATs and maintain its PAT margins over the years. In addition,it was also able to deliver high dividend payout ratios historically even withheavy capex investment. Despite its record high valuation level (27.2x FY12EPER) now, we reckon the stock will likely continue to re-rate itself on theback of its defensive nature and earnings performance consistency. We are maintainingour earnings forecasts and Market Perform rating on Nestle for now with anunchanged TP of RM58.00 based on our DCF model. This TP implies a PER of 27.2xon our FY12 forecast EPS of 205.8 sen. 

Fair for now, more inthe future. Over the years, Nestle has consistently improved its PAT andbringing it to new levels without fail. Its current share price has also morethan doubled compared with 5 years ago, arriving at a new record high PER of27x. The company has also never disappointed its shareholders even with the ebband flow of the market, even during when commodities prices were high to its disadvantage.This is mainly attributable to the strong support from its parent company,Nestle Global (NG), which has supported the company strongly in its operations.For instance, Nestle group worldwide has a global commodities procurement teamto ensure that all its subsidiaries, Nestle Malaysia included, were able topurchase the most cost effective raw materials with the right price and sourcein order to maximise profit optimisation. If we were to look forward toNestle's fair value two years down the road, it would potentially be RM62.70then based on our DCF model. 

The Halal thrust.To recap, Nestle Malaysia is the Halal Centre of Excellence for Nestle Global.According to the Halal Industry Development Corp, Malaysia's halal productsexports is expected to  grow at 10% thisyear due mainly to the government's efforts to promote the products overseas.Nestle exports its products, which are deemed halal, to more than 50 countriesworldwide with export sales of about RM1,161m for FY11, the exports sharehaving risen to about 25% of its overall sales compared  with approximately 22% in FY07. With a large Muslimpopulation of about 1.6b people globally, we expect the company to ride thegovernment bandwagon to promote Malaysia's halal products to continue growingits export segment. Additionally, untapped markets being targeted such asMyanmar would also potentially enhance the company's export sales. 

Likely to maintainpayout despite doubling its capex. Management is doubling FY12 capex toapproximately RM186.0m. The high capex is expected to be spent on the expansionof the capacity of its existing seven factories. It is, however, not confirmedwhich production lines would be upgraded or expanded. Despite this, we reckonthe company will still maintain its dividend payout ratio at about 90%. This ismainly supported by the fact that the company had actually still paid out about80%-130% of its earnings between 2007 and 2010 despite having a high capex(ranging from RM103m to RM302m) then as well.  

Steady earnings.We are maintaining our forecasts of Nestl'''s net earnings of RM482.7m andRM508.2 for FY12 and FY13 respectively. We continue to see better sales growthopportunities in the coming years for the company driven by the company's100-year old celebrations planned throughout the year and its consistent andinnovative management. We are maintaining our Market Perform rating on Nestlewith an unchanged TP of RM58.00 based on DCF model

Source: Kenanga 

SP Setia - RM932m new sales in 1Q

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: CIMBPrice Call: TRADING BUYTarget Price: 4.30

Target RM4.30

As 1Q is seasonally the weakest quarter, the results were broadly in line even though net profit made up 19% of our full-year forecast and 20% of consensus numbers. SP Setia is on track to meet its RM4bn new sales target as annualised 1Q new sales made up 93% of the target. We have tweaked our EPS forecasts for housekeeping purposes. We maintain our Trading Buy call and valuation basis of parity with RNAV. The recent completion of the offer exercise by major shareholder PNB and SP Setia's CEO should remove any share overhang.

Telekom Malaysia: Eyes 10% growth in SME subscribers

Stock Name: TM
Research House: ECMLIBRAPrice Call: HOLDTarget Price: 4.78

Telekom Malaysia Bhd (T MK, Hold, TP: RM4.78) aims to achieve 10% growth in its small and medium enterprise (SME) customers by end-2012, from 494,000 customers currently. TM SME executive vice-president, Azizi A Hadi said at the launch of SME BizFest 2012, an event that expected to attract 500,000 SMEs and generate more than RM1m in business transactions. (Financial Daily)

SP Setia: Maintain Hold - On track

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: MAYBANKPrice Call: HOLDTarget Price: 3.93

Results in line. SPSB's 1QFY12 results came in as expected. Despite its stunning RM1.2b sales performance in 4MFY12, the stock's low liquidity (11% free float) post the joint takeover offer by its major shareholders may cap near-term share price upside. We maintain our earnings forecasts. Our Hold call is premised on an unchanged RM3.93 target price, in turn a 10% discount to our RM4.36 RNAV estimate.

Maybank Research 23 March 2012

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Glomac Bhd: Maintain Buy - Still positive

Stock Name: GLOMAC
Company Name: GLOMAC BHD
Research House: MAYBANKPrice Call: BUYTarget Price: 0.96

Results in line. Glomac's 9MFY12 core net profit (+19% YoY) came in as expected. A 2.75sen interim gross DPS was also in line. We remain positive on Glomac for its cheap valuations and attractive 4.6% net dividend yield. 2012-14 earnings will be driven by RM418m in property sales achieved in FY11 and new launches like Reflection Residences, Glomac Centro and Glomac Puchong. We maintain our earnings forecasts and RM0.96 target price (based on a 40% discount to its RM1.59 RNAV). Buy.

Maybank Research - 23 March 2012

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March 22, 2012

BJTOTO - Safe bet with yield

Stock Name: BJTOTO
Research House: HWANGDBSPrice Call: BUYTarget Price: 4.90

Berjaya Sports Toto; Buy; RM4.40
Price Target: RM4.90; BST MK

Results in line, third interim DPS of 6 sen declared. Still the market leader, but growth may moderate in FY13. Maintain Buy, TP raised to RM4.90 as we roll forward our valuation base.

Genting Bhd (BUY) - GenS Introduces Its First Integrated LCP

Stock Name: GENTING
Company Name: GENTING BHD
Research House: HLGPrice Call: BUYTarget Price: 11.50

Genting Bhd (BUY)
GenS Introduces Its FirstIntegrated LCP
Resorts World Sentosa (RWS) will be launching a loyalty card programme(LCP) with a gamut of resort-wide privileges unparalleled within any singledestination in Singaporeon 1 April 2012.
With the introduction of RWS INVITES, we opined thatthis would attract more customers to the resort as they will be able to haveperks and benefits as they spend in the integrated resort (IR), especiallycustomers from the mass-market. This will hence bring more stability towardGenS's earnings when the proportion of mass-market vs. VIP customers balances.
Furthermore, we expect RWS to gain back its marketshare from Marina Bay Sands (MBS) from this programme as the increase invisitors to the IR indirectly increases the casino patronage.
No changes made to ourforecast. Maintain BUY on GenT with TP ofRM11.50.

Source: HLIB Research 22 March 2012

BToto (BUY) - 9MFY12 Results In-Line

Stock Name: BJTOTO
Research House: HLGPrice Call: BUYTarget Price: 4.92

BToto (BUY)
9MFY12 Results In-Line
BToto's 9MFY12 net profit ofRM315.71m came in-line, with HLIB's and also street's estimates, accounting for78.7% and 79.4% respectively.
Declared third interimsingle tier dividend of 6 sen per share (2QFY11: 6 sen). Total dividend for9MFY12 is 22 sen, translating to 5% yield. Given that this has reached ourfull-year dividend forecast of 22 sen and no changes made to our forecast, wewouldn't be surprise if the group decided to pay another round of dividend in4QFY12, which will be a bonus for investors.
Yoy: BToto's revenueincreased 14.9% on the back of higher number of draw days and higher salesduring CNY. This is offset by the lesser sales/draw in non-jackpot games,cannibalized by 4D Jackpot. However, net profit fell 2.7% due to the muchhigher prize payout of 62.4% compared to only 58.8% in 3QFY11.
Qoq: Revenue went up 13%mainly attributable to the higher number of draw days. The increase innon-jackpot's and lotto games' sales/draw from the lessened cannibalization by4D Jackpot also contributed to the increase qoq. However, the increase waspartially offset by the higher prize payout during the quarter.
To date, 4D Jackpotsales have reached to an average of RM1.76m sales per draw. However, Magnum isstill the leader in the 4D Jackpot segment with market share of 60.1%.
No changes made to ourforecast. Maintain BUY on BToto with TP of RM4.92.

Source: HLIB Research 22 March 2012