KLCI Stock - BJTOTO / 1562 - 2010 Quarter 4

BERJAYA SPORTS TOTO BERHAD

Listing Date: 04.05.1972
Market: MAIN
Sector: TRADING/SERVICES
Par Value: 0.10
Major Industry: Recreation
Sub Industry: Miscellaneous Recreation
Market Cap : 1351030072*4.34 = 5,863,470,512.48 (Large)
NTA per share : (446325-643986)/1321318 = Negative
P/BV : Negative
Forecast P/E now : (4.34-0.27)/0.26 = 15.65 (High)
ROE : 82.53% (High)
DY : 0.27/4.34*100 = 6.22% (Moderate)
Fixed Asset Turnover(4 year) : (2.7586+3.3161+3.2004+2.5018)/4 = 2.9442 (High)
Liquidity Ratio : 2121413/876749 = 2.4196 (Moderate)
Receivables Collection Period : (103640+50483)/2/(858294/365) = 32 days (Good)
My Target Price : Not interested unless revenue and eps increase
My Decision : NOT BUY
My Comment : Revenue and profit decreasing, good cash flow, high debt but decreasing, navps increasing
Technical Support Price : 4.2
Risk Rating : MODERATE
OSK Target Price : 5.2 (21 Jun 10)

Berjaya Sports Toto Berhad (BToto) is principally engaged in investment holding and provision of management services to its subsidiary companies. The Company, along with its subsidiaries, is principally engaged in the operations of Toto betting; leasing of online lottery equipment; manufacture and distribution of computerized lottery and voting systems; property investment and development, and investment holding. The Company operates in two segments: toto betting and leasing of lottery equipment, and others, which includes property investment and development, investment holding, and manufacture and distribution of computerized lottery and voting systems. On September 5, 2008, the Company incorporated a wholly owned subsidiary, Berjaya-ILTS Limited. In May 2009, the Company, through its subsidiary Berjaya Sports Toto (Cayman) Limited (BSTC), acquired 6.81% interest in Prime Gaming Philippines, Inc.

My notes based on 2010 Quarter 4 report (number in '000):
- As compared to the previous year corresponding quarter ended 30 April 2009, the Group recorded a decrease in revenue and pre-tax profit of 1.4% and 22.2% respectively mainly due to the results of Sports Toto Malaysia Sdn Bhd ("Sports Toto") as explained in the ensuing paragraph coupled with higher finance cost incurred as well as lower revenue and pre-tax profit reported by Prime Gaming Philippines, Inc.
- The principal subsidiary, Sports Toto recorded a slight drop in revenue of 1.6% but pre-tax profit decreased by 17.9% as compared to the previous year corresponding quarter. The decrease in pre-tax profit was mainly due to a higher prize payout in the current quarter under review as compared to previous year corresponding quarter
- For the 12-month period under review, the Group recorded a decrease in revenue and pre-tax profit of 8.2% and 6.7% respectively as compared to the previous year ended 30 April 2009. The performance of the Group was mainly attributed to the results of Sports Toto as explained in the ensuing paragraph as well as higher finance cost incurred
- Sports Toto recorded a drop in revenue and pre-tax profit of 8.6% and 5.0% respectively as compared to the previous year ended 30 April 2009. This is primarily due to high base effect of the previous year which experienced strong sales from high jackpots in the Mega 6/52 game. The lower drop in pre-tax profit as compared to the decrease in revenue was mainly due to the lower prize payout in the current year under review
- As compared to the preceding quarter ended 31 January 2010, the Group recorded a slight increase in revenue
of 0.9% and a drop in pre-tax profit of 15.8%. The performance of the Group was mainly attributed to the results of Sports Toto as explained in the ensuing paragraph and the improved revenue and pre-tax profit reported by Prime Gaming Philippines, Inc. as well as the higher revenue recorded by International Lottery & Totalizator Systems, Inc. resulting from recognition of certain project contract sales in the current quarter under review
- The principal subsidiary, Sport Toto, recorded a marginal decrease in revenue of 0.1% and a drop in pre-tax profit of 22.2% as compared to the preceding quarter. The higher decrease in pre-tax profit as compared to the drop in revenue was mainly attributed to a higher prize payout in the current quarter under review
- Estimate next 4Q eps after 2010 Q4 result announced = 0.2889*0.9 = 0.26(10% drop), estimate PE on current price 4.34 = 15.65(DPS 0.27)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0729*4 = 0.2916, estimate highest/lowest PE = 15.09/13.34 (DPS 0.27)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0762*4 = 0.3048, estimate highest/lowest PE = 13.65/12.53 (DPS 0.29)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0797*4 = 0.3188, estimate highest/lowest PE = 12.21/12.08 (DPS 0.29)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0854*4 = 0.3416, but this is too high, so use last 3 years average eps = (0.3268+0.276+0.2905)/3 = 0.2978, estimate highest/lowest PE = 16.66/13.26 (DPS 0.29)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0773*4 = 0.3092, estimate highest/lowest PE = 15.33/13.97 (DPS 0.26)

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