BJToto: Earning Rebounded

Result Update

For QE31/7/2017, BJToto's net profit rose 2.5% q-o-q or 26.5% y-o-y to RM72 million while revenue was mixed - down 0.4% q-o-q but up 2.5% y-o-y - to RM1.47 billion. Overall revenue dropped q-o-q mainly due to lower revenue reported by Sports Toto and PGMC. The drop was mitigated by higher revenue growth achieved by H.R. Owen which was due to higher revenue achieved from used car sales. The Group registered an increase in pre-tax profit of 15.0% mainly attributable to the improved results reported by Sports Toto and H.R. Owen.


Table : BJToto's last 8 quarterly results

Revenue jumped in QE31/1/2014 due to the consolidation of H.R. Owen's revenue onto the Group's account. Despite the sharply higher revenue, the Group's bottom-line remained flat as the H.R. Owen's profits were not significant.


Graph: BJToto's last 52 quarterly results

Financial Position

BJToto's finaial position as at 31/1/2017 is deemed adequate, with current ratio at 1.03x while gearing ratio at 2.15x.

Valuation

BJToto (closed at RM2.36 last week) is now trading at a PER of 12.4 times (based on last 4 quarters' EPS of 19.06 sen). Its dividend payment for the preceding 4 quarters amounted to 14 sen; giving the stock a dividend yield of 5.9%. At these PER & DY, BJToto is deemed fairly attractive.

TA Securities has valued BJToto at RM3.34 based on Dividend Discount Model, with CAPM rate of 10.20%. This gives the stock a potential upside of 41.5%. If you want to read the report, go here.

Technical Outlook

In April, BJToto broke below the irregular trading range, ABCD at RM2.60 and dropped to a low of around RM2.25. Since the release of the latest quarterly result, BJToto has rebounded back above RM2.30. While the downside momentum has begun to weaken, it is still too early to call a bottom for the stock.


Chart 1: BJToto's weekly chart as at Sep 21, 2017 (Source: Malaysiastock.biz)


Chart 2: BJToto's daily chart as at Sep 21, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on better financial performance and attractive valuation, BJToto is definitely a stock worth considering for long-term investment at this beaten down price.

Note:
 
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.