The Kedah MB told people to go to Penang to buy 4D lotteries but to analysts, the negative news of the ban of lottery shops in the state for lottery companies will have a minimal impact on company performances.
“While this news is negative, the impact to NFO operators is expected to be minimal given the small numbers of NFO outlets in Kedah. BJTOTO (OP; TP: RM2.42) has only 20 outlets in Kedah, which makes up <3% of the total 680 outlets throughout the country while MAGNUM (MP; TP: RM2.04) has 13 outlets or <3% of the group’s total outlets of 485.
“Pending clarity, we keep our estimates and TPs unchanged for now. For a quick back-of-envelope calculation, the banning of NFO outlets in Kedah would reduce BJTOTO’s FY23E earnings by 2.5% lowering its TP to RM2.36 from RM2.42 while MAGNUM would take a hit of 2.2% on its FY22E earnings with TP reduced to RM2.00 from RM2.04,” says Kenanga Research.
