By Xavier Kong
UOB Kay Hian expects share buybacks to resume for number forecast operator (NFO) Magnum Bhd, given the weakness in share price of the local gaming group.
“Magnum’s share price has weakened by close to 10% over the past two months to a 52-week low of RM2.44,” noted UOBKH, adding that during the Aug 2015 to Nov 2015 period, Magnum had acquired 0.88 million of its own shares at the price range of RM2.53 to RM2.63 per share.
At the same time, Magnum’s website has suggested that the NFO will be launching a new game, which would be introduced on Jan 24, 2016, though there were no other details available.
The research house speculated that this new game could replace the group’s unpopular 4D Jackpot Gold, or that it could mean Magnum had received regulatory approval for a new game.
“We believe that the new game will feature a jackpot component, as in the recent past new game introductions, as regulators favour new games which cannot be replicated by illegal bookies,” said UOBKH.
The research house views this development as a mild catalyst, which would moderately “enhance/revive” sales, explaining that the 4D jackpot Gold game only records 70,000 to 80,000 ticket sales per draw, potentially due to the game’s complicated nature.
“A more interesting new game could potentially boost Magnum’s non-classic games revenue,” noted UOBKH.
Magnum remains the NFO with the lowest number of games in Malaysia. Excluding the classic 4-digit game, Magnum only has two other games, which are 4D Jackpot and 4D Jackpot Gold. This is fewer than Berjaya Sports Toto Bhd’s six games, and Da Ma Cai’s four games.
At 11.45am, Magnum’s shares trading at RM2.46, up 2 sen, on slim volume.
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