Scribd Logo
Upload

Welcome to Scribd!

  • 572 views

    Berjaya Sports Toto Berhad: BCorp Aborts Sports Betting Deal - 28/06/2010

    Uploaded by

    Rhb Invest
    Berjaya Corp aborts sports betting deal. In a press statement, Berjaya Corp has aborted its plan to acquire a 70% equity stake in Ascot Sports S/B (Ascot) for RM525m from Tan Sri Dato’ Seri Vincent Tan Chee Yioun (TSVT). In the statement, BCorp. stressed that the Government had backtracked on its decision to issue the licence despite having granted its approval for the reissuance. This statement comes after confirmation from the Government that it will not issue any sports betting licence to Ascot Sports.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd

    Berjaya Sports Toto Berhad: BCorp Aborts Sports Betting Deal - 28/06/2010

    Uploaded by

    Rhb Invest
    572 views2 pages
    Berjaya Corp aborts sports betting deal. In a press statement, Berjaya Corp has aborted its plan to acquire a 70% equity stake in Ascot Sports S/B (Ascot) for RM525m from Tan Sri Dato’ Seri Vincent Tan Chee Yioun (TSVT). In the statement, BCorp. stressed that the Government had backtracked on its decision to issue the licence despite having granted its approval for the reissuance. This statement comes after confirmation from the Government that it will not issue any sports betting licence to Ascot Sports.

    Original Title

    Berjaya Sports Toto Berhad : BCorp Aborts Sports Betting Deal - 28/06/2010

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Berjaya Corp aborts sports betting deal. In a press statement, Berjaya Corp has aborted its plan to acquire a 70% equity stake in Ascot Sports S/B (Ascot) for RM525m from Tan Sri Dato’ Seri Vincent Tan Chee Yioun (TSVT). In the statement, BCorp. stressed that the Government had backtracked on its decision to issue the licence despite having granted its approval for the reissuance. This statement comes after confirmation from the Government that it will not issue any sports betting licence to Ascot Sports.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    572 views2 pages

    Berjaya Sports Toto Berhad: BCorp Aborts Sports Betting Deal - 28/06/2010

    Uploaded by

    Rhb Invest
    Berjaya Corp aborts sports betting deal. In a press statement, Berjaya Corp has aborted its plan to acquire a 70% equity stake in Ascot Sports S/B (Ascot) for RM525m from Tan Sri Dato’ Seri Vincent Tan Chee Yioun (TSVT). In the statement, BCorp. stressed that the Government had backtracked on its decision to issue the licence despite having granted its approval for the reissuance. This statement comes after confirmation from the Government that it will not issue any sports betting licence to Ascot Sports.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    PP 7767/09/2010(025354)

    28 June 2010

    Malaysia Corporate Highlights


    RHB Research
    Institute Sdn Bhd
    A member of the
    RHB Banking Group
    Company No: 233327 -M

    New s Upda te
    28 June 2010
    MARKET DATELINE

    Berjaya Sports Toto Share Price


    Fair Value
    :
    :
    RM4.33
    RM5.05
    BCorp Aborts Sports Betting Deal Recom : Outperform
    (Maintained)

    Table 1 : Investment Statistics (BTOTO; Code: 1562) Bloomberg: BST MK


    Net Net
    FYE Turnover profit EPS Growth PER C.EPS* P/CF P/NTA ROE Gearing GDY
    Apr (RMm) (RMm) (sen) (%) (x) (x) (x) (x) (%) (%) (%)
    2010 3,392.3 381.7 28.9 (11.6) 15.0 13.0 NM 85.5 41.9 6.2
    2011f 3,445.6 435.9 32.3 11.7 13.4 33.0 17.6 NM 119.2 65.5 6.0
    2012f 3,470.0 457.0 33.8 4.9 12.8 34.0 17.5 NM 104.9 67.3 6.5
    2013f 3,574.6 469.3 34.7 2.7 12.5 15.1 (83.8) 91.3 61.9 6.7
    Main Market Listing / Non-Trustee Stock / Non Syariah-Approved Stock By The SC * Consensus Based On IBES
    E i

    ♦ Berjaya Corp aborts sports betting deal. In a press statement, Berjaya Issued Capital (m shares) 1,351.0
    Market Cap (RMm) 5,850.0
    Corp has aborted its plan to acquire a 70% equity stake in Ascot Sports
    Daily Trading Vol (m shs) 1.0
    S/B (Ascot) for RM525m from Tan Sri Dato’ Seri Vincent Tan Chee Yioun
    52wk Price Range (RM) 4.11-4.99
    (TSVT). In the statement, BCorp. stressed that the Government had
    Major Shareholders: (%)
    backtracked on its decision to issue the licence despite having granted its Berjaya Land 48.0
    approval for the reissuance. This statement comes after confirmation from Tan Sri Vincent Tan 5.6
    the Government that it will not issue any sports betting licence to Ascot (direct)
    Sports.
    FYE Apr FY11 FY12 FY13
    ♦ Disappointing move by the Government. We believe this is another EPS chg (%) - - -
    disappointing move by the Government, and could be seen as a sign of Var to Cons (%) (2.2) (0.5) -
    weak political will and politicizing of a business decision. Based on a
    PE Band Chart
    potential market size of RM20bn and a gaming tax rate of 10%, the
    Government is set to lose approximately RM2bn worth of revenue per year
    PER = 16x
    as a result of this decision. PER = 13x
    PER = 10x

    ♦ Impact to BToto minimal, but sentiment would be affected.


    Although the impact to BToto’s earnings from this sports betting licence
    would have been very minimal at this stage (adding 2-3% to net profits),
    given the fact that distribution was to have been divided between retail
    outlets and telephone betting; and that the 1% agent commissions would
    have to be split further between the agencies and BToto, we believe Relative Performance To FBM KLCI

    sentiment on the stock would be affected negatively.


    FBM KLCI
    ♦ Risks. Main risks for BToto include: 1) Poor luck factor causing high prize
    payout ratios; 2) Regulatory changes for NFO industry to discourage
    Berjaya Sport Toto
    gambling in the country or to allow competitors more outlets and more
    game variations; and 3) Hike in gaming taxes.

    ♦ Forecasts unchanged. We maintain our earnings forecasts for BToto as


    we had not imputed the sports betting revenue into our forecasts.

    ♦ Investment case. No change to our Outperform call and our DCF-based


    fair value of RM5.05 (WACC 9.8%). Although we expect sentiment to be
    negatively affected, we expect this to have a short-term impact on BToto,
    given that the earnings impact for BToto would have been minimal and Hoe Lee Leng
    that BToto’s core NFO business is still stable. At current valuation levels, (603) 92802184
    we believe BToto continues to provide decent dividend yield prospects and [email protected]
    is now trading at the lower-end of its 10-year historical PE range of 11-
    19x.

    Please read important disclosures at the end of this report. Page 1 of 2

    A comprehensive range of market research reports by award-winning economists and analysts are exclusively
    available for download from www.rhbinvest.com
    28 June 2010

    Table 2. Earnings Forecasts Table 3. Forecast Assumptions


    FYE Apr (RMm) FY10a FY11F FY12F FY13F FYE Apr FY11F FY12F FY13F

    Turnover 3392.3 3445.6 3470.0 3574.6 Revenue per draw day (RMm) 21.9 22.1 22.7
    Gaming 3374.1 3421.1 3444.3 3547.6 No. draw days 156 156 156
    Others 18.2 24.5 25.7 27.0 Gross prize payout ratio (%) 63.0 63.0 63.0
    Turnover growth (%) (8.2) 1.6 0.7 3.0 No. of outlets 680 680 680

    EBITDA 612.1 628.7 647.8 662.6


    Gaming 585.1 648.7 657.8 677.6
    Others (23.0) (20.0) (10.0) (15.0)
    EBITDA margin (%) 18.0 18.2 18.7 18.5

    Depreciation (17.7) (18.0) (18.2) (18.4)


    Net Interest (15.9) (25.1) (23.5) (21.8)
    Associates (0.0) 0.0 0.0 0.0
    EI 0.0 0.0 0.0 0.0

    Pretax Profit 546.2 584.3 604.7 621.0


    Tax (159.7) (151.9) (151.2) (155.3)
    PAT 386.4 432.4 453.5 465.8
    Minorities (4.7) 3.5 3.5 3.5
    Net Profit 381.7 435.9 457.0 469.3

    Source: Company data, RHBRI estimates

    IMPORTANT DISCLOSURES

    This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
    (previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
    opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or
    be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
    construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
    manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons
    may from time to time have an interest in the securities mentioned by this report.

    This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
    of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
    particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or
    strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts
    any liability for any loss or damage arising out of the use of all or any part of this report.

    RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
    investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB
    Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity
    securities or loans of any company that may be involved in this transaction.

    “Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
    officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
    services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

    This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
    information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

    The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
    upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

    The recommendation framework for stocks and sectors are as follows : -

    Stock Ratings

    Outperform = The stock return is expected to exceed the KLCI benchmark by greater than five percentage points over the next 6-12 months.

    Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
    over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take on
    higher risks.

    Market Perform = The stock return is expected to be in line with the KLCI benchmark (+/- five percentage points) over the next 6-12 months.

    Underperform = The stock return is expected to underperform the KLCI benchmark by more than five percentage points over the next 6-12 months.

    Industry/Sector Ratings

    Overweight = Industry expected to outperform the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

    Neutral = Industry expected to perform in line with the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

    Underweight = Industry expected to underperform the KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

    RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended
    securities, subject to the duties of confidentiality, will be made available upon request.
    This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the
    actions of third parties in this respect.

    Page 2 of 2

    A comprehensive range of market research reports by award-winning economists and analysts are exclusively
    available for download from www.rhbinvest.com

    You might also like