Results Update
BJToto reported a better set of results for QE31/1/2011. Its net profit increased by 77% q-o-q or 17% y-o-y to RM115 million while its turnover was relatively unchanged at about RM851 million. The higher net profit was attributable to higher profit contributed by Berjaya Philippines Inc. & sharply higher profit by Sport Toto due to a lower prize payout in the current quarter. The impact on the current quarter from the increase in Pool Betting Duty from 6% to 8% that was effective 1 June 2010 was mitigated by the reduction in the 4D Big Special Prize from RM200 to RM180 per RM1 bet with effect from 15 December 2010.
Table 1: BJToto's last 8 quarterly results
Chart 1: BJToto's last 26 quarterly results
Valuation
BJToto (closed at RM4.09 yesterday) is now trading at a PE of 12 times (based on annualized EPS of 34 sen). At this PE multiple, BJToto is deemed fairly attractive. With the slide in its net profit halted, BJToto could command a PE multiple of 14-15 times again.
Technical Outlook
BJToto is now resting at its long-term uptrend line support of RM4.00.
Chart 2: BJToto's weekly chart as at Mar 15, 2011 (Source: Tradesignum)
Conclusion
Based on improved financial performance, attractive valuation & technical outlook, BJToto is a good stock for long-term investment.
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