Kenanga Upgrade BJTOTO to OUTPERFORM

1. YTD 1H12 net earnings of RM197.8m accounted for 54% of our FY12 full year estimate and 50% that of the market consensus.
2. Better results got fuelled by the good luck factor. 2Q12 EPPR of 57.9% was nearly 2% below the 60% theoretical level.
3. BToto declared a 8 sen net DPS in 2Q12 same as the preceding quarter, representing 101.0% of its
2Q12 earnings.
4. Upgrading to OUTPERFORM. Post earnings revision, our DCF derived price target has increased slightly to RM4.52 from RM4.49. We continue to like BToto for its sustainable and attractive 7%-8% gross dividend yield.