Maybank Investment Bank Bhd (Maybank IB) has forecasted that its long-term earnings for Sports Toto Bhd might be reduced by 52 percent if there is a change of state government for Selangor, Penang, and Negeri Sembilan following the upcoming elections.
According to a report by New Straits Times, 35 percent of Sports Toto's total outlets are numbers forecast operator (NFO) outlets located in the three states.
“Relative to Magnum Bhd, Sports Toto has more NFO outlets in Selangor at 22 percent compared to Magnum at 18 percent.
“If just the Selangor state government change, our long-term earnings estimates could be cut by a still deep 33 percent,” said Maybank IB in a note today.
Maybank IB also stated that it has trimmed Sports Toto's financial year 2023 estimates (FY23E), FY24E, and FY25E core earnings by two percent, four percent, and two percent respectively.
It added that Sports Toto’s NFO outlets in Selangor, Penang, and Negeri Sembilan account for 22 percent, eight percent, five percent of its total NFO outlets.
“Compared to Magnum, (NFO outlets in Selangor account for 18 percent of total NFO outlets), Sports Toto will be especially hard hit should the Selangor state government change," it said. - Mkini
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