KUALA LUMPUR (Jan 24): AllianceDBS Research has maintained its "Buy" rating on Berjaya Sports Toto Bhd (BToto) at RM2.59 with an unchanged target price of RM3.10 and said it is anticipating the group to report strong 2QFY20 results.
In a note Jan 23, AllianceDBS Research's Cheah King Yoong said this will mainly be driven by stricter enforcement by authorities to clamp down on illegal number forecast operators (NFOs), higher sales from its 4D Jackpot game on the back of high 4D Jackpot prizes and contribution from its new game variant 4D Zodiac since June 2019.
Furthermore, Cheah said he is optimistic that the upcoming implementation of minimum penalties will serve as a key re-rating catalyst for the sector and improve the group's outlook.
"We believe the stock's attractive dividend yield of more than 6% will continue to support its share price.
"We believe that the market has underappreciated the intensified efforts by the authorities to curb illegal NFO activities and upcoming implementation of minimum penalties," he said.
BToto was last traded at RM2.56, valuing it at RM3.46 billion.