Berjaya Sports Toto is an investment holding company that operates gaming and lottery business. Berjaya Sports Toto Berhad was incorporated in 1969 and is based in Kuala Lumpur, Malaysia. It is a subsidiary of Berjaya Land Berhad. Magnum Berhad is the holding company for the Magnum Group of Companies which was incorporated on 18 August 1975. Magnum Berhad was the first private company to be granted a license to promote, operate and manage 4-digit numbers forecast betting in Malaysia. Both companies are involved in the gaming and lottery business. We select these two companies because they are both equally well-known companies w The research result review of Berjaya Sports Toto, which was done by Maybank at September 20, 2016 was chosen to
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Berjaya and Magnum both had encountered loss in their net profit. At 1QFY4/17, dividends and earnings of Berjaya were marginally below expectations because of a slightly higher than expected price payout ratio. Moreover, net profit of RM 58.7 million in Berjaya was negatively impacted by RM 9 million forex loss. A loss of RM 1.6 million was due to the dilution of equity …show more content…
Magnum reported a 2Q16 net profit of RM21.8m, (-63.5% YoY) due to a combination of factors, that is weaker consumer sentiment and impact of GST implementation. The decline in gaming profit was larger than expected although we have earlier factored in a lower contribution due to slower revenue growth. On the other hand, evaluation of stock performance of both companies can be done through analysis of Return on Asset(ROA). ROA of Berjaya Sports Toto is higher than Magnum Bhd. This indicates that Berjaya is better at translating assets into profits. In short, Berjaya Sports Toto has a better stock performance because of the higher ROA and also facing a lesser loss in net profit compared to Magnum Berhad. Thirdly, we will compare and contrast the company based on their growth opportunities. The net profit of Berjaya is higher than Magnum. It is because Magnum faced a greater negative impact from intense competition of illegal operators and higher price payout ratio. So the growth rate of Berjaya is higher resulting in more growing opportunities. Next, we will evaluate the riskiness of both companies based on debt to equity
Berjaya and Magnum both had encountered loss in their net profit. At 1QFY4/17, dividends and earnings of Berjaya were marginally below expectations because of a slightly higher than expected price payout ratio. Moreover, net profit of RM 58.7 million in Berjaya was negatively impacted by RM 9 million forex loss. A loss of RM 1.6 million was due to the dilution of equity …show more content…
Magnum reported a 2Q16 net profit of RM21.8m, (-63.5% YoY) due to a combination of factors, that is weaker consumer sentiment and impact of GST implementation. The decline in gaming profit was larger than expected although we have earlier factored in a lower contribution due to slower revenue growth. On the other hand, evaluation of stock performance of both companies can be done through analysis of Return on Asset(ROA). ROA of Berjaya Sports Toto is higher than Magnum Bhd. This indicates that Berjaya is better at translating assets into profits. In short, Berjaya Sports Toto has a better stock performance because of the higher ROA and also facing a lesser loss in net profit compared to Magnum Berhad. Thirdly, we will compare and contrast the company based on their growth opportunities. The net profit of Berjaya is higher than Magnum. It is because Magnum faced a greater negative impact from intense competition of illegal operators and higher price payout ratio. So the growth rate of Berjaya is higher resulting in more growing opportunities. Next, we will evaluate the riskiness of both companies based on debt to equity