Sports Toto Bhd

Sports Toto Bhd maintains a capital structure characterized by significant leverage, with a debt-to-equity ratio of 1.47 and long-term debt of MYR 1.72 billion against total equity of MYR 1.17 billion. The company holds MYR 587 million in cash and equivalents, resulting in a negative net cash position. Liquidity is assessed as medium, supported by a current ratio of 1.17, which suggests adequate short-term coverage of liabilities but limited buffer for unexpected shocks. Operating cash flow stands at MYR 325 million, while free cash flow is MYR 120 million after capital expenditures of MYR 80 million.

Profitability metrics indicate efficient use of equity, with a return on equity (ROE) of 22.42% and a return on assets (ROA) of 6.46%. The company generated MYR 6.48 billion in revenue, resulting in a gross profit of MYR 1.19 billion and an operating income of MYR 422 million. Net income reached MYR 234 million, reflecting a net margin of approximately 3.6%. These returns are notable given the high leverage, suggesting that the business model generates sufficient cash flows to service debt while delivering returns to shareholders.

Segment and geographic data are not explicitly detailed in the available financial snapshot, limiting the ability to assess revenue concentration risks. However, the classification under Hotels, Restaurants & Leisure suggests exposure to consumer discretionary spending, which may be sensitive to economic cycles. The lack of segment breakdown prevents a granular analysis of revenue drivers, but the overall revenue scale indicates a substantial market presence.

Growth trajectory analysis is constrained by the absence of historical period data in the provided input. Without multi-year revenue or net income trends, it is not possible to evaluate the company's growth momentum or consistency. The current financial snapshot provides a static view of performance, highlighting the need for historical context to assess long-term viability.

Risk factors include medium liquidity risk and low dilution risk. The key flag of negative net cash after subtracting total debt underscores the importance of maintaining strong operating cash flows to manage debt obligations. The low dilution risk suggests that the company is not actively issuing new shares, which protects existing shareholders from equity dilution. However, the high debt levels require careful monitoring to ensure that interest coverage remains adequate.

Recent events include analyst estimates with a mean price target of MYR 1.37 and a median target of MYR 1.39. The mean recommendation of 2.60 indicates a neutral to slightly positive sentiment among analysts, with one strong buy, one buy, and two hold ratings. These estimates reflect a consensus view that the company's current valuation is fair, with limited upside potential in the near term.

Revenue grew at a 7.6% compound annual growth rate over four years, demonstrating consistent top-line expansion.

Operating income increased 7.9% year-over-year to MYR 422 million, reflecting improved operational profitability in the latest fiscal year.

Free cash flow recovered to MYR 119.6 million in FY2025, reversing the negative cash flow recorded in FY2023.

Analysts project 6.4% upside to a mean price target of MYR 1.37, suggesting modest valuation appreciation potential.

Debt-to-equity ratio of 1.47 is in the bottom quartile, indicating significantly higher leverage than the cohort median.

Net margin of 4.0% trails the cohort median of 5.3%, suggesting weaker bottom-line profitability relative to peers.

Operating margin of 6.9% remains below the cohort median of 7.5%, indicating persistent pressure on operational efficiency.

Medium liquidity and credit risk flags highlight potential vulnerabilities in the company's financial stability and debt management.

Revenue MYR 6.48B, +2,0% YoY; Operating income +7,9% YoY.

• ▍Revenue MYR 6.48B, +2,0% YoY
• ▍Operating income +7,9% YoY
• ▍Net income +7,3% YoY
• ▍Free cash flow −34,3% YoY
• ▍Net margin 3.6%

Revenue MYR 6.36B, +4,2% YoY; Operating income +13,2% YoY.

• ▍Revenue MYR 6.36B, +4,2% YoY
• ▍Operating income +13,2% YoY
• ▍Net income −3,3% YoY
• ▍Free cash flow +2 454,2% YoY
• ▍Net margin 3.4%

Revenue MYR 6.10B, +16,6% YoY; Operating income +16,3% YoY.

• ▍Revenue MYR 6.10B, +16,6% YoY
• ▍Operating income +16,3% YoY
• ▍Net income +40,0% YoY
• ▍Free cash flow −112,0% YoY
• ▍Net margin 3.7%

Revenue MYR 5.23B, +8,3% YoY; Operating income −6,0% YoY.

• ▍Revenue MYR 5.23B, +8,3% YoY
• ▍Operating income −6,0% YoY
• ▍Net income −11,2% YoY
• ▍Free cash flow −24,6% YoY
• ▍Net margin 3.1%

Revenue MYR 4.83B; Operating income MYR 316.1M.

• ▍Revenue MYR 4.83B
• ▍Operating income MYR 316.1M
• ▍Net margin 3.8%