Berjaya Sports Toto - Benefited from positive ticket sales for 6/58 HOLD

- Maintain a HOLD on Berjaya Sports Toto (BToto) with an unchanged DCF-based fair value of RM4.70/share. 

- BToto’s 9MFY12 results were in line with our expectations and consensus estimates. After flat ticket sales/draw growth in FY11, the group’s NFO revenue has improved in FY12F.    

- BToto has declared an interim gross DPS of 6 sen for 3QFY12, which brings total gross DPS to 22 sen for 9MFY12 (9MFY11: 18 sen). 

- We have forecast a gross DPS of 30 sen for the full year (FY11: 21 sen), which implies a yield of 6.8% and net payout of 103%.

- BToto’s ticket sales rose 6.4% YoY to RM2.5bil in 9MFY12 underpinned by positive response to its 4D Jackpot game, which was launched in June 2011 and Supreme Toto 6/58, which saw its first prize money snowballing to RM58mil in 3QFY12.

- On a per draw basis, ticket sales expanded 5.6% YoY to RM17.6mil in 9MFY12. There were 133 draws in 9MFY12 compared to 132 draws in 9MFY11.

- The NFO division also benefited from a lower prize payout. We estimate BToto’s prize payout at 63.9% in 9MFY12 versus 66.3% in 9MFY11.

- Comparing 3QFY12 against 2QFY12, ticket sales grew 6% on a per draw basis. There were 46 draws in 3QFY12 against 43 draws in 2QFY12.

- As mentioned earlier, punters were attracted by the first prize money in Supreme Toto 6/58, which snowballed for a couple of months until a retiree won RM58mil in January 2012.   

- Prize payout was relatively unchanged QoQ in 3QFY12. We estimate prize payout at 63.3% in 3QFY12 versus 63.1% in 2QFY12. 

- Going forward, we have assumed that BToto’s ticket sales per draw would improve by 4% in FY13F. We have also assumed a prize payout of 65%. The theoretical prize payout for 4D games is about 65.3%.

Source: AmeSecurities