- 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 computerised
online lottery system and provides software support to PCSO.
- As at end-April 2011, PCSO had 2,633 outlets in Luzon
versus 2,398 outlets in the preceding year.
- The NFO industry in the Philippines is more liberal
compared to Malaysia. It is easier to increase the number of outlets and
frequency of draws in the Philippines compared to Malaysia.
- There are as many three draws a day for some of the
lottery games in the Philippines compared to Malaysia’s three draws a week
presently (excluding special draws).
- We view the potential acquisition of PCSO positively
although there are no financial details or pricing on the acquisition yet.
- Presently, BToto’s operations in the Philippines are
estimated to account for 20% to 25% of group operating profit. Berjaya
Philippines recorded a revenue of Peso 2 billion (RM141mil) and pre-tax profit
of Peso 1.33 billion (RM73mil) in FY11.
- Apart from lottery-related operations, BToto also operates
a hotel called Berjaya Manila Hotel in Makati City.
- The hotel recorded revenue of Peso 112.2mil (RM8mil) and
pre-tax profit of Peso 6.1mil (RM432,680) in FY11.
- We maintain a HOLD on BToto with a DCF-based fair value of
RM4.70/share. BToto’s dividend yield is decent, forecast at 6.9% for FY12F and
7.1% for FY13F.
Source: AmeSecurities
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