Maybank IB Research: Termination of PMP's jackpot game a boon to MPHB
Business & Markets 2013
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com
Friday, 08 March 2013 09:57
KUALA LUMPUR (Mar 8): The termination of Pan Malaysian Pools’ (PMP) 6D Jackpot game recently is a boon for MULTI-PURPOSE HOLDINGS BHD [] (MPHB), said Maybank IB Research.
In a note Friday, the research house which maintained its Overweight rating on the gaming sector reinforced its Buy rating on MPHB with a target price of RM4.52.
“We believe that MPHB is a deeply undervalued stock whose value will be unlocked when the de-merger of its gaming and non-gaming operations is completed, now scheduled for at the end of its second quarter of 2013”, said the research house.
The 6D Jackpot was terminated less than a year after its launch due to its decline in revenue, effective Mar 6, 2013 with its last and final draw the day before.
According to a report from Maybank IB Research, PMP’s revenue fell to RM350, 000 March this year from RM1.6 million in July last year.
“We understand that this was because only 11% of sales had been allocated to Jackpot 1, causing the 6D Jackpot 1 to accumulate very slowly and thereby discouraging punters”, it said.
Although MPHB does not have a 6D game, this development reduces the shortfall in the number of games it has compared to PMP from two to one.
“PMP now has three games versus MPHB at two games. We leave our earnings estimates on MPHB unchanged for now,” said Maybank IB Research.