• Maintain BUY on Multi-Purpose Holdings Bhd (MPHB), with a
downward revised RNAV-based fair value of RM3.60/share (vs. RM3.70/share
previously). We havereduced our assumption of ticket sales per draw growth from
4% to 2% for FY12F.
• We remain positive on the group as we believe that the
fall in ticket sales has bottomed.
• MPHB’s FY11 net profit (including profits from discontinued
operations but excluding gain on disposal of property) was within our
expectation but fell 10% short of consensus. Included in the group’s net profit
was a RM199.6mil gain on disposal of Menara Multi-Purpose.
• All of MPHB’s core divisions reported improved earnings. In
spite of a decline in revenue, pre-tax profit of the gaming division rose 3.7%
YoY to RM395.7mil in FY11.
• This was due to a lower prize payout in FY11. Prize payout
of about 66.3% in FY11 was 0.8 of a percentage point lower than the payout of
67.1% in FY10.
• Revenue of the NFO division shrank 3.4% YoY to RM3.2bil in
FY11. Number of draws amounted to 177 in FY11 compared with 175 in FY10. On a
per draw basis, ticket sales declined 4.5% from RM20.5mil in FY10 to RM19.6mil in
FY11.
• We attribute the slide in ticket sales to competition from
Berjaya Sports Toto’s 4D jackpot, which was launched in June 2011 and the 6/58
lotto game, which saw a run-up in the first prize winnings to RM57mil.
• Among all of MPHB’s non-gaming divisions, the
bestperforming was the insurance division, which recorded a 6.9% YoY increase
in pre-tax profit in FY11. EBIT of the insurance division was RM63.1mil in FY11
versus RM59.1mil in FY10.
• MPHB has declared a final gross DPS of 5 sen for FY11. This,
coupled with interim gross DPS of 10 sen, brings total gross DPS to 15 sen
(FY10: 9 sen), which implies a yield of 5.4%.
• We believe that MPHB would be using the bulk of the RM375mil
proceeds from the disposal of its building to pare down borrowings. Gross
borrowings stood at RM2.5bil as at end-FY11 (FY10: RM2.2bil).
Source: AmeSecurities
Source: AmeSecurities
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