Strong Defensive Stock

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 4.00

Increasing Dividend Payments

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 4.51

BJTOTO - Abnormally High Prize Payout in 4QFY14

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: HOLD

Target Price: 4.34

BJTOTO - Declaring 9.5sen Share Dividend

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: HOLD

Target Price: 4.39

BJTOTO - Abolishing Business Trust Plan

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 5.04

Distorted By Higher Operating Expenses

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 5.05

Normalisation in 3QFY13 Earnings

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 5.05

One Draw Lesser in 3QFY13

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 5.05

Two Additional Draws in 2QFY13

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: HOLD

Target Price: 5.05

Growing at a Steady Pace

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 5.05

Positive Dividend Surprise

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: TA

Price Call: BUY

Target Price: 5.05

Berjaya Sports Toto - To acquire stake in PCSO? HOLD

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: AMMB

Price Call: HOLD

Target Price: 4.70

- According to news reports, Berjaya Sports Toto Bhd (BToto)may be acquiring a stake in the Philippine Charity Sweepstakes Office(PCSO). 

- Currently, BToto supplies and maintains a computerisedonline lottery system and provides software support to PCSO. 

- As at end-April 2011, PCSO had 2,633 outlets in Luzonversus 2,398 outlets in the preceding year. 

- The NFO industry in the Philippines is more liberalcompared to Malaysia. It is easier to increase the number of outlets andfrequency of draws in the Philippines compared to Malaysia. 

- There are as many three draws a day for some of thelottery games in the Philippines compared to Malaysia's three draws a weekpresently (excluding special draws).  

- We view the potential acquisition of PCSO positivelyalthough there are no financial details or pricing on the acquisition yet.  

- Presently, BToto's operations in the Philippines areestimated to account for 20% to 25% of group operating profit. BerjayaPhilippines recorded a revenue of Peso 2 billion (RM141mil) and pre-tax profitof Peso 1.33 billion (RM73mil) in FY11.

- Apart from lottery-related operations, BToto also operatesa hotel called Berjaya Manila Hotel in Makati City.  

- The hotel recorded revenue of Peso 112.2mil (RM8mil) andpre-tax profit of Peso 6.1mil (RM432,680) in FY11.  

- We maintain a HOLD on BToto with a DCF-based fair value ofRM4.70/share. BToto's dividend yield is decent, forecast at 6.9% for FY12F and7.1% for FY13F.   

Source: AmeSecurities 

OSK maintains 'buy' call on Berjaya Toto

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: OSK

Price Call: BUY

Target Price: 4.72

OSK Research has maintained its "buy" call on Berjaya Toto (BToto) due to its defensive earnings and solid dividend
track record, as well as fair value of RM4.72.

OSK Research said the stock's net dividend yield of 6.4 per cent on a relatively conservative dividend payout assumption of 88 per cent, versus the year-to-date payout ratio of 94 per cent, make BToto an ideal investment.

Meanwhile, Berjaya Sports Toto (BST) is planning to expand its presence in the Philippines.

OSK Research said BST already had a relatively lucrative presence in the Philippines via its 88 per cent subsidiary, Berjaya Philippine Inc (BPI) that derives its revenue from an Equipment Lease Agreement (ELA) with the Philippines Charity Sweepstakes Office (PCSO).

It said however, for the PCSO's operation to be commercially viable under private ownership, the government has to enact a new law to reduce the charitable allocation of the lottery revenue from the current 30 per cent to a much lower level.

As such, OSK Research said it could be highly sensitive and controversial for the government, to allow for the enactment. -- Bernama

BJToto - MARKETPERFORM - Eyeing a stake in Philippine NFO?

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: KENANGA

Price Call: HOLD

Target Price: 4.52

It was reported over the weekendthat BToto is eyeing a stake in a Philippine NFO. We see this potentialoffshore expansion to broaden its earnings base as a positive move, if theacquisition materialises, given its current less exciting domestic growth. We have estimated the top line to growonly 4% annually over the next two years as the local NFO market matured. Atthis juncture, we are unable to confirm the news and quantify the exactfinancial impact to BToto given the limited information obtained. In themeantime, we continue to maintain our MARKET PERFORM call on the stock with anunchanged DCF-derived TP of RM4.52/share. 

Eyeing stake in Philippine NFO. It was reported in The Edge Weekly that Berjaya Sports Toto Bhd (BToto)is looking to expand its operations in the Philippines by potentially acquiringa stake in the Philippines Charity Sweepstakes Office (PCSO).  However, we are unable to confirm the news atthis juncture. We are positive on the news (if it materialises) as an offshoreexpansion is the way to broaden the company's earnings base given the limitedgrowth prospects locally. However, previous failed cases of overseas venture byits local peers, namely Magnum Corp (in Bali) and Tanjong plc (in Moscow), indicate that local NFOs'  overseas venture may not be easy. 

PCSO is a state-owned charity organisation.  PCSO is the principal government agency inPhilippines set up with the aim of raising and providing funds for health programs,medical assistance and services, and charities of national character.  The main products of PCSO are sweepstakes andthe lottery games. It currently has 3,232 terminals across 2,600 outlets inLuzon island. PCSO is actually not new to BToto as its subsidiary, Berjaya PhilippinesInc (BPI) supplies and maintains a computerised online lottery system andprovides software support to PCSO.

30% fund channel for charity. In accordance with the company's Charter, PCSO specifically allocatesits  net receipts or revenues in thefollowing manner i.e. 55% to a Prize Fund, 30% to a Charity Fund and 15% to anOperating Fund. Each allocation has its own specific purpose and usage, andhence any diversion or inter-fund transfers are illegal and in violation of thePCSO Charter. Given so, in our opinion, PCSO needs to amend its Charter if it wereto privatise from a charity organisation to a profit-oriented company. We are however unable to ascertain the earningsand market size of PCSO from its currently publicly available information (suchas from its website -  www.pcso.gov.ph). Consequently,we are not able to estimate the potential financial impact on BToto yet at thisjuncture (if the deal materialises).  

MARKET PERFORM rating maintained. We reckon that BToto's localmarket is fairly matured with limited growth prospects. Thus, an overseasexpansion is the way to broaden its earnings base. Although we have a MARKETPERFORM call on BToto, we reckon that income seeking investors may still likethe stock for its sustainable and attractive 7%-8% gross dividend yield. Ourprice target of RM4.52/share is based on DCF valuation where we assumed a WACCof 7.4%. 

Source: Kenanga 

Berjaya Sports Toto - Doubling down on Philippines?

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: CIMB

Price Call: BUY

Target Price: 5.30

While BToto's reported interest in a stake in the Philippine Charity Sweepstakes Office should be positive as it would allow it to diversify from a saturated local NFO market, the appeal of this deal hinges on the target's financials as well as the size and cost of the stake. The Edge's article lacks these details. But earnings contribution is unlikely to be significant given the current structure where 85% of net receipts are allocated to the prize and charity funds. We maintain our Outperform rating and DDM-based target price.

Source: CIMB Daybreak - 16 April 2012, Full PDF Report

Berjaya Sports Toto ' Eyeing stake in Philippine NFO?

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: RHB

Price Call: BUY

Target Price: 4.85

Berjaya Sports Toto ' Eyeing stake in Philippine NFO?                                                  Market Perform

News Update

-          BToto is reportedly looking to expand its Philippines operations by potentially acquiring a stake in the Philippine Charity Sweepstakes Office (PCSO) in Luzon . Currently, BToto supplies and maintains a computerised online lottery system and provides software support to PCSO and in return, gets a cut from PCSO's ticket sales.

-          Forecasts and DCF-based fair value of RM4.85 maintained. Maintain Market Perform.

Source: RHB Research - 16 April 2012

BToto (BUY) - Expanding into the Philippines

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: HLG

Price Call: BUY

Target Price: 4.92

BToto (BUY)

Expandinginto the Philippines

• According to The Edge Weekly, BToto is said to belooking to expand its operations in the Philippines by potentiallyacquiring a stake in the Philippines Charity Sweepstake Office (PCSO).
• BToto is currentlysupplying and maintaining a computerized online lottery system and providessoftware support to PCS via its subsidiary, Berjaya Philippines Inc. In return,it gets a cut from PCSO's ticket sales.
• We believe that this isto expand its coverage, giving itself a growth catalyst in the coming yearswhile the market for number forecast operators (NFO) in Malaysia has matured.
• This would help BToto toexpand its penetration into the overseas gaming market. However, the benefit ofventuring into the international market comes with its risks. Past recordsshowed that local NFOs such as Tanjong and Magnum have attempted to ventureinto overseas market but ended up recording provisions.
• We remain our forecast with TP ofRM4.92. Maintain Buy.

Source: HLIB Research - 16 April 2012 

Berjaya Sports Toto - MARKET PERFORM - 22Mar12

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: KENANGA

Price Call: BUY

Target 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 

BJTOTO - Safe bet with yield

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: HWANGDBS

Price Call: BUY

Target 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.

BToto (BUY) - 9MFY12 Results In-Line

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: HLG

Price Call: BUY

Target 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