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Investor CentralINVESTOR CENTRAL: Berjaya Sports Toto Berhad - Are its customers cutting their bet sizes?
WEDNESDAY, 25 NOVEMBER 2015 - BJ Sports Toto may be the leader in the 4D game in Malaysia, but we are not sure. Although it might be the market leader, it is facing problems in its local and overseas businesses.
In Malaysia where consumer sentiment is low, it is facing the impact of absorbing the Goods and Services Tax (GST) and its customers cutting their bet sizes.
Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies to which global investors need answers.
1. Are its customers cutting their bet sizes?
Besides taking on the burden of GST, NFOs like BJ Sports Toto and Magnum are affected by their customers reducing their bet sizes as consumer sentiment is low.
BJ Sports Toto also has businesses in the Philippines, the US and the UK, but does not report its business segments by geography in its quarterly reports.
It only does so in its annual reports. So we have no way of knowing how much Sport Toto, the gaming unit, makes.
Are its customers cutting their bet sizes? If so, by how much?
2. How long does it intend to absorb GST?
Gaming companies such as Genting and BJ Sports Toto took to absorbing the GST as passing on the cost to consumers is not a good idea in an environment of bad consumer sentiment.
BJ Sports Toto said its pre-tax profit was brought down by higher prize payouts and GST expenses.
Its pre-tax profit decreased by 6% from RM 120.7 mln to RM 113 mln year on year. On a quarter on quarter basis, it declined by 4% from RM 117.9 mln.
How long does it intend to absorb GST?
And is it looking to change its win formula (i.e., so that its customers don't win so much, so often) in order to increase its margins?
(Read the full story to get all 8 questions)
We have invited the company to an on-camera interview, and/or to reply to our questions in writing.
At the time of publication we have not received a reply (which is why you are seeing this message).
We will update this report if we do.
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