What was once a favourite dividend play counter, BJtoto has seen its share price deteriotating in the last few years. Most investors who bought BJToto's shares, thinking the share price provides good value based on its past dividend payout history could find themselves trapped in a share with slow but steady downward spiral. This is a dangerous trap. You could be holding on to the shares thinking it will come back but it will just slowly drift further and further away and by the time you realize it, its too far away for you to swim back.

BJToto through its Philippines subsidiary has acquired a car dealership and distribition business, HR Owen, based in UK in 2014. The acquisition had help to boost the revenue of the group but from the segmental analysis, it can be seen this acquisition does not provide the earnings quality enjoyed by the gaming business. Based on the proportion of the car dealership vs the gaming business, BJToto is no longer a pure gaming counter like before. It is slowly morhping into a car dealership company. The problems is HR Owen is not providing a reasonable return after three years being acquired by BJToto. Despite having almost a three fold growth in revenue, its profit has been anaemic.

The other concern on BJToto is that its traditional Toto betting business is not improving. Even with Malaysian, Philippines and US market combined. Although still solidly holding on the Group's financial performance, it can be seen that the toto betting business has been on a gradual down trend since 2013 (its best performance for the 6 years under review). BJToto is still relying on its outlets to sell tickets, whereas people do not want to drive or walk all the way to an outlet and queue. People now prefer to buy online. Its more discreet and no one will notice.

Until Malaysian government allows licensed operators like BjToto to operate online, I believe this business will continue to deteriotate. Governent will not be able to successfully clamp gambling activities but there will be more gambling activities operated by the black market via online mode. Gamblers, whether they are Muslims or not, will prefer to do it online as it is easier and more discreet. Without the legalised online gaming websites, the illegal online gaming websites will just foster and grow. Companies like BjToto will die of slow death.