KUALA LUMPUR, Sept 13 — Hong Leong Investment Bank has upgraded its recommendation to a “buy” call from “hold” for Berjaya Sports Toto after the lottery operator reported first quarter financial year 2014 earnings per share of 7.4 sen, which were within expectations.

The research house said earnings per share accounted for 22.6 per cent and 23.5 per cent of Berjaya Sports Toto's and streets' full year estimates respectively.

“Historically, first quarter financial year 2014 earnings ranged from 18 to 28 per cent of full year numbers due to seasonality,” it said.

It said the “buy” call was mainly due to its 4D Jackpot that showed signs of stabilisation against decline in sales previously on monopoly of lotto games and highest-yielding stock in the gaming sector.

The research house maintained its target price of RM4.64 based on standard operating procedure (SOP) valuations.

However, the share price has dipped over the last quarter with current total return of less than 10 per cent.

“Hence, we upgrade our recommendation to “buy” from “hold.”

Meanwhile, Hwang DBS Vickers maintained a “hold” and a SOP based target price of RM4.30.

“We have yet to factor in the impact of the restructuring which could see 15 per cent lower earnings as Berjaya's effective stake in its Malaysian new fund offer business will reduce from 100 per cent to 80 per cent (partly mitigated by management fees),” said Hwang DBS — Bernama