Friday, 1 March 2013

Multi-Purpose Holdings - 4Q12 hit by luck factor

Period     4Q12/FY12

Actual vs. Expectations     The 4Q12 net profit of RM56.3m came in below expectations, bringing the FY12 full-year core profit to RM338.2m, which was 9% and 6% below our estimate and the market consensus respectively.

 The weaker-than-expected 4Q12 results were due to a poorer luck factor, where FY12 full-year estimated prize payout ratio (EPPR) rose to 69.2% vs. our assumption of 63.0%

Dividends  A final GDPS of 3.5 sen and a NDPS of 1.5 sen were declared in 4Q12. This brought FY12 fullyear NDPS to 12.4 sen vs. our assumption of 12.9 sen.

Key highlights  The 4Q12 net profit fell 22% QoQ to RM56.3m from RM72.4m previously due to a 66% plunge in its NFO earnings, which was hit hard by the luck factor. The estimated prize payout ratio (EPPR) in 4Q12 surged to 74.3% from 67.3% in 3Q12, compressing the NFO’s PBT margin to 3.7% from 10.6% previously.

 On a YoY comparison, the 4Q12 net profit contracted 78% from RM260.1m last year, mainly due to an exceptional gain of RM182.9m recognised on the sale of Menara Multi-Purpose in 4Q11. Ex-EI, the 4Q12 earnings would have declined 27%, as the EPPR in 4Q11 was only at 64.1%.

 For the YTD, FY12 core earnings rose 20% to RM338.2m from RM282.0m previously, although revenue fell 3% over the year. This was mainly helped by a lower interest expense, which dropped by 32% or RM45.6m from a year ago. Luck factor-wise, the EPPR increased to 69.2% from 62.8% previously.

Outlook  Its demerger exercise is expected to unlock the group’s value with its dividends set to rise higher on the back of an 80% dividend payout policy.

Change to Forecasts  No changes to our FY13-FY14 core earnings estimates.

Rating   Maintain OUTPERFORM
MPHB is our TOP PICK in the gaming sector.

Valuation  Our price target is maintained at RM4.31/RNAV share.

Risks  A rise in gaming tax by the government
 Weaker than expected ticket sales and a higher than expected EPPR.
 The delay in MPHB Capital’s listing will cap the share price upside.

Source: Kenanga

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