BJToto may be a good medium-term BUY

BJToto announced its results for 4Q2009 in mid-June. It net profit increased by 10.4% q-o-q or 76.5% y-o-y to RM107.2 million, while its turnover dropped 17.7$ q-o-q but up marginally compared to 4Q2008. The net profit has improved due to lower prize payout. Turnover declined q-o-q due to 6 extra draws in 3Q2009 as compared to 4Q2009.


Table: BJToto's 8 quarterly results up to April 30, 2009


Chart 1: BJToto's top-line & bottom-line for the past 8 quarters

BJToto (closed at RM4.36 on last Friday) is now trading at a trailing PE of 13 times (cased on last 4 quarters' EPS of 32.7 sen). Excluding dividend in specie, BJToto's dividend payout averages about 25 sen per annum for the past 2 years. This gives BJToto a dividend yield of 5.7%.

Despite breaking below its long-term uptrend line in August 2008 (as noted here), BJToto only dropped slightly to a low of RM4.04 in October 2008. Thereafter, it rallied to a high of RM5.35 in June. The share price has recently adjusted for the generous dividend of 30 sen plus dividend-in-specie of 1 Treasury share for every 14 shares owned. The combined dividend should carry a value of about RM0.63 per share and BJToto share price was adjusted lower accordingly to RM4.32.

The share has been hanging around the RM4.30 level for the past 5 days. I believe the share price is not likely to go lower as this is the tentative uptrend line support as well as the horizontal line support. In the current environment of strong buying for blue chips or near-blue chips, BJToto will eventually be snapped up again. Potential medium-term target is RM4.90-5.00.


Chart 2: BJToto's weekly chart as at July 20, 2009_10.30am (Source: Quickchart)

Based on good technical support & attractive valuation, I believe BJToto is a good BUY for medium-term investing.