Gaming (OVERWEIGHT) - Defensive Stocks Staying Still

Gaming (OVERWEIGHT)

Defensive Stocks Staying Still

• GenM’s FY11 results came in line whereas GenT’s FY11 results were above expectations. BToto on the other hand, will be releasing its 3QFY12 results on 21 March.
• BToto’s results is expected to report strong yoy and qoq growth due to higher number of draw days, the CNY festival which falls in Jan and the impact of 4D Jackpot.
• Our regression test also showed that the cannibalization by 4D Jackpot has narrowed down to RM213k from RM536k per draw previously.
• BToto’s 4D sales have been on a declining trend since 2009, partly due to the matured game. Magnum’s 4D sales experienced the same trend as well.
• RWNY’s net win begins to improve as customers get used to the cold weather in NY. State-wide’s average net win breaches its historical high with US$313/VLT/day.
• GenS launched its remaining 2 luxury accommodations last month. They now have a total of 1,538 rooms in the resort.
• Given that we had upgraded our ratings on GenM and GenT
  (post FY11 results) to BUY, we upgrade the sector to OVERWEIGHT. Top pick according to preference are: (1) BToto (BUY, TP: 4.92), GenM (BUY, TP: 4.17) and (3) GenT (BUY, TP: 11.50).

Source: HLIB Research 20 March 2012