BJToto: Helped by weaker MYR

Results Update

For QE31/10/2015, BJToto's pre-tax profit increased by 1.7% q-o-q but dropped 19.8% y-o-y to RM115 million while its revenue rose 7.8% q-o-q  or 15.1% y-o-y to RM1.44 billion. Revenue increased q-o-q was mainly attributed to improved results of Sports Toto and H.R. Owen whilst pre-tax profit increased due to the better results of Sports Toto partly offset by lower earnings reported by H.R. Owen in the current quarter under review.

Its net profit dropped by 2.5% q-o-q or 29% y-o-y to RM70.6 million due to much higher effective tax rate as certain expenses were disallowed for taxation purposes and profits in certain subsidiary companies are separately assessed for tax and not relieved by losses in other companies within the Group.


Table: BJToto's last 8 quarterly results


Chart 1: BJToto's last 29 quarterly results

Valuation

BJToto (closed at RM3.00 last Friday) is now trading at a fair PE of 12.5 times (based on the last 4 quarters' EPS of 24.2 sen). Its dividend yield is fairly attractive at 6.6% pa.

Technical Outlook

BJToto has been in downtrend for the past 2 years. It may retest its September low of RM2.92. I believe that the current price of RM3.00 is at a good psychological support. A failure to breach the recent low could signal the end of the downtrend.


Chart 2: BJToto's monthly chart as at Dec 18, 2015 (Source: ShareInvestor.com)

Conclusion

Despite weaker financial performance, BJToto is worth close tracking as its valuation & technical outlook could be indicative of a bottom in the near future.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, BJToto.