Maybank IB stays positive on Berjaya Sports Toto

KUALA LUMPUR: Despite slightly missed expectations, Maybank Investment Bank research remains bullish on BERJAYA SPORTS TOTO BHD (BST).

For 1QFY20, BST’s core net profit of RM58.4mil came in at 23% of Maybank IB’s full-year estimate although Ebitda of RM110mil came within expectation.

The research house said the below-expected earnings was owing to depreciation and interest expense that were higher than predicted due to MFRS 16 accounting standards, leases leading to recognition of additional property, plant and equipment and lease liabilities.

Nevertheless, Maybank IB added that the first interim dividend of four sen per share met its expectation.

The research house maintained its buy call on the stock with an unchanged target price of RM3.05.

“We estimate that Sports Toto Malaysia’s 1QFY20 gross NFO sales/draw grew by about 8% y-o-y, driven by jackpot games, which we estimate grew 22% y-o-y.

“In its prepared remarks, BST concurred when it stated that it anticipates ‘improved per draw sales’ growth going forward,” said Maybank IB.

Source: TheStar