Rgb International Bhd

@kahliong a repeat of what happened with $RGB / 0037 (RGB INTERNATIONAL BHD) , possible? MACC also took in the management for questioning, subsequently released and no further developments on that.

Sharing from remisier

$RGB / 0037 (RGB INTERNATIONAL BHD)

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❗ 🎰 *RGB International (RGB MK): Initiate BUY; TP: RM0.71* ❗
Main Market; Market cap: RM619m


🔹 RGB is the leading distributor of Aristocrat, Light & Wonder, and Konami’s electronic gaming machines (EGM), holding a dominant 70-80% market share across Asian casinos

🔹 We like RGB for its exciting growth prospects, backed by 1) being a prime beneficiary of regulatory changes in the Philippines and Cambodia, 2) significant opportunities in new markets such as Sri Lanka, Thailand, UAE, and Japan, 3) strong recurring income prospect from its potential new online casino venture with PAGCOR, and 4) growing EGM installed base that is poised to drive higher annual replacement base

🔹We expect a blockbuster year for RGB, forecasting a 32% profit CAGR over 2023–26E. RGB is in a prime position to capture 60–70% of new EGM orders from its largest market, the Philippines, driven by 1) a robust pipeline of new integrated resorts set to open, 2) ongoing upgrades following the privatization of PAGCOR’s casino operations, and 3) growing global replacement market

🔹 The total addressable market for EGMs is projected to expand by c.17k over 2024–27E. This growth builds on the existing 44k EGMs currently in operation, reflecting the significant potential opportunities for order replenishment. These dynamics provide strong visibility for our RGB’s projected sales of 4.5k–5.5k units across 2024–26E

🔹 RGB aspires to be the leading one-stop solution for casinos, offering a wide array of products and services—from signage to advanced casino surveillance systems. Leveraging its in-house manufacturing facility in Penang, RGB produces high-quality LED signage as a more cost-efficient alternative to competitors. Taking innovation a step further, RGB has established a dedicated team to drive AI solutions, beginning with an AI-driven surveillance solution in collaboration with a leading China-based company, providing cutting-edge security surveillance solutions

🎯 Initiate coverage on RGB with BUY and target price of RM0.71, based on 9x PE 2025E EPS. This represents -0.5SD below FTSE Bursa Malaysia Small Cap Index (FBMSC)’s 10-year mean and c.59% discount to the global EGM manufacturers. Our steep target PER discount takes into account 1) RGB’s role as a distributor rather than manufacturer and its dependence on suppliers, 2) its smaller market capitalization relative to peers, 3) its small replacement base of 2,500 machines per annum, and as such 4) more significant exposure to sales volatility

💎 At 5.1x 2025E PE (or 2.9x 2025 ex-cash PE) – assuming a net cash position of c.RM260m in 2025E), the stock trades significantly below our ascribed valuation, with a 10% dividend yield, making it an attractive dividend yield play. While we acknowledge that the current valuation reflects the risks associated with RGB's business model and market conditions, its current pricing and strong dividend yield offer a compelling opportunity, especially if its geographic expansion proves successful

Titan Weekend Chart Reviews

$RGB / 0037 (RGB INTERNATIONAL BHD)

Had a good breakout from its ARM 0.415+ main downtrend resistance which led to a rally towards the RM 0.47 regions with huge volume.

For now slowing down here with RM 0.45 as its immediate support level. As long as able to hold above its RM 0.43 support, could still continue on this new uptrend towards the RM 0.50+ regions soon.

Support: RM 0.45, RM 0.43 areas
Resistance: RM 0.475, RM 0.485, RM 0.50 areas

Titan Trading Notes for Thursday [13/2/2025]

KLCI had a decent breakout back towards the 1603 points region with an overall positive market sentiment. Overall daily trading volume also saw an improvement as we hovered back towards the 3.15 billion mark.

Main stocks that showed strong buying momentum would be the likes of MYEG, RGB, PBBANK, YTL, INARI, YTLPOWR, YBS, SUPERMX, SRIDGE, SET, RL, SIMEPROP, and MAYBANK. All of which were able to sustain their rallies throughout the day on the top volumes list.

$RGB / 0037 (RGB INTERNATIONAL BHD) was definitely the star performer today as it broke out from its RM 0.415+ main downtrend resistance and rallied all the way towards the RM 0.44 regions with huge volume and buying momentum.

So far looking quite bullish here and as long as able to sustain above its RM 0.415+ immediate support levels on the daily chart, could continue on towards its RM 0.45+ major resistance levels soon until its next pullback happens.

Will be monitoring RGB closely here as looking quite strong.

$MYEG / 0138 (MY E.G. SERVICES BERHAD) on the other hand also had a decent breakout towards the RM 1.05 regions with good volume and buying momentum today on the daily chart.

This came after it broke out from its RM 1+ major resistance levels earlier last week. For now looking strong and as long as able to hold above its RM 1 support, could continue towards and beyond its RM 1.07 regions soon in the coming weeks.

Will be monitoring MYEG closely here.

With FCPO prices coming up, $JTIASA / 4383 (JAYA TIASA HOLDINGS BHD) had a decent breakout towards the RM 1.35 regions with good volume and buying momentum today, even closing on its intraday high here, which is a very good signal.

For now looking quite bullish and as long as able to hold above its RM 1.30 immediate support level, could continue on towards and beyond its RM 1.40+ major resistance levels soon in the coming weeks for an uptrend continuation pattern.

Will be monitoring JTIASA closely here as seems to be leading the plantation sector.

UOBKH TOP PICKS 2025

Adequately Charged Up.

While likely to kick off the year with caution, the FBMKLCI is still adequately electrified to deliver good positive gains, charged up by robust domestic liquidity. We introduce our end-25 FBMKLCI target of 1,800, and we anticipate the market to steadily adopt a progressively risk-on mode as we expect US president-elect Donald Trump to be pragmatic in executing trade policies. Key investment themes include Iskandar 2.0, data centre rollout and China’s economic recovery.

Compelling investment themes include: a) Iskandar 2.0; b) data centre project rollouts; c) China’s improving economic momentum; d) domestic consumption acceleration (tied to wage hikes); e) E&E sector: trade diversion and global semiconductor cycle recovery; f) Green Agenda and National Energy Transition Roadmap (NETR) opportunities; and g) blockchain. We also foresee trading opportunities in glove stocks (riding on the US’ scheduled steep tariff hikes on China glove products), selected consumer stocks (discretionary domestic consumption boosted by wage hikes), M&A activities and quality dividend yielders.

$RGB / 0037 (RGB INTERNATIONAL BHD)
$HLBANK / 5819 (HONG LEONG BANK BERHAD)
$PMETAL / 8869 (PRESS METAL ALUMINIUM HOLDINGS BERHAD)

Stockbit covered $RGB / 0037 (RGB INTERNATIONAL BHD) before UOB did tbf..

$RGB / 0037 (RGB INTERNATIONAL BHD) sharing from remisier

@Penglam @Ryunanda

*RGB International (RGB MK/BUY/RM0.395/TP:RM0.66)*

_Special Dividends Surprise; On Track For Record Earnings Year💐_

🔹 *3Q24 result within expectations.* RGB reported softer revenue of RM94.2m (-45% yoy, -5% qoq) and core net profit of RM17.1m (-41% yoy, -16% qoq). The yoy decline in was mainly due to weaker SSM sales. 9M24 bottom line profit of RM63m made up only 56% of our 2024 full-year forecast, but deemed within expectations as we anticipate a much stronger 4Q24.

🔸*SSM sales still on track to hit our 2024 forecasts.* In 3Q24, SSM sales appeared weaker yoy, normalising from 2023’s exceptional bulk sales order. The decline was also partly due to typhoon in Philippines which causes ports closure throughout Aug-Sept and delaying some shipments. For 3Q24, SSM sales is e.400 slot machines. We foresee significant uplift in 4Q24 following complete delivery of a huge orderbook secured from PACGOR earlier.

🔹 *TSM continues to impress with meaningful margin uptick.* TSM segment’s revenue of RM26.7m was lower (-11% QoQ). Nevertheless, PBT margin expanded meaningfully to 34.3ppt (+14.1ppt qoq), presumably reflecting lower opex, better performance and lower machine depreciation after progressive restructuring into a lease-to-own model.

🔸 *Record high 1.8sen dividend declared 🎁, implying a sizeable 4.6% yield.* Positively, RGB declared 1.2 special dividend and 0.6sen interim dividend, bringing 9M24 dividend to 3 sen. This implies a dividend yield of 7.6% and payout ratio of 73%. *Prospective dividend yield is lush at c.12% for 2024 based on current share price.*

🔹 *Saving the best for a fantastic 4Q24.* We expect 4Q24 earnings to be substantially stronger, mainly bolstered by higher SSM delivery. To recall, RGB earlier secured a US$81.3m contract from PACGOR for 1,968 slot machines and accessories. We understand that delivery have been fully completed in 4Q24 which will translates into significant earnings.

🔸 *Bargain financial matrixes still supporting our investment thesis.* RGB’s current bargain valuation of 5.4x 2024F PE (4x ex-cash PE) and net cash of RM156m (c.25% of market cap) is still deep-in-value and offers palatable potential capital upside. Stock is poised for re-rate especially with strong earnings visibility in 4Q24.

🔹 *MACC cases resolved, officially👨🏻‍⚖️.* In October, RGB issued an announcement to clarify on earlier investigation conducted by MACC, stating that MACC had written to the lawyer that they have completed their investigation on RGB and no action is to be taken.

🔸 *Maintain BUY with unchanged target price of RM0.66,* which implies 9x 2024F PE (pre-pandemic’s mean)

Stock watchlist to focus

In the short to mid-term, we should focus on RGB (aiming for record profits) and Bahvest, capitalizing on the gold theme.

Exporters, particularly in the technology sector, are experiencing compressed profit margins due to the strengthening of the RM against the USD. We anticipate profit margins may decrease by 5% to 10%. However, companies that rely on imported components and raw materials may mitigate the impact of this decline, depending on the percentage of imports used. Generally, while sales volumes are increasing, they cannot offset the margin erosion caused by the stronger Ringgit.

There is typically a lag period before these companies can adjust selling prices when new models are launched.

Additionally, many are likely facing realized forex losses on outstanding foreign debtors from June 30 to September 30.

These factors may explain the significant decline in the prices of our tech stocks.

$RGB / 0037 (RGB INTERNATIONAL BHD) $BAHVEST / 0098 (BAHVEST RESOURCES BERHAD)

Titan Trading Notes for Tuesday [8/10/2024]

$KLCI managed to rebound back towards the 1635 points region with an overall positive market sentiment today. Daily trading volume however settled only around the 2.7 billion mark, which isn't really a good sight to see.

Main stocks that showed strong buying momentum would be the likes of ARMADA, VELESTO, BAHVEST, SIMEPROP, TOPGLOV, 99SMART, LHI, GTRONIC, MRDIY, PERDANA, HENGYUAN, and NOTION. All of which were able to sustain their rallies throughout the day on the top volumes list.

$ARMADA / 5210 (BUMI ARMADA BERHAD) was able to breakout back towards the RM 0.515 regions with huge volume and buying momentum today, breaking out from its RM 0.51+ main downtrend resistance levels after a few months of downtrend.

For now looking quite strong here and as long as able to sustain above its RM 0.51 immediate support levels, could continue on towards and beyond its RM 0.54+ major resistance levels soon in the coming weeks.

Will be monitoring ARMADA closely as something big seems to be brewing here.

$BAHVEST / 0098 (BAHVEST RESOURCES BERHAD) on the other hand was able to breakout strong from its RM 0.72+ major resistance levels and rallied all the way towards the RM 0.78+ levels with huge volume and buying momentum here despite being overbought.

For now looking quite strong here and as long as able to sustain above its RM 0.74+ immediate support levels, could continue on towards and beyond its RM 0.80++ regions soon in the coming weeks.

Will be monitoring BAHVEST closely here.

$RGB / 0037 (RGB INTERNATIONAL BHD) on the other hand also looking quite strong here as after retracing all the way back towards forming a huge support region around the RM 0.35 - RM 0.37+ main support levels over the past few months, was able to breakout strong towards the RM 0.41+ regions today.

So far, it's looking quite strong here and ripe for an uptrend continuation pattern. As long as RGB is able to hold above its RM 0.39+ immediate support, could continue to trend up towards the RM 0.45+ major resistance levels soon.

Will be monitoring RGB closely here.

UOBKH ALPHA PICKS OCT 2014

Sticking to the variety of investment themes, while adding China mega fiscal stimulus plans as an additional catalytic event driver. Our Alpha Picks are chosen to capitalise on foreign equity inflows (which favour selected banks) and near-term alpha events, including more newsflow on Iskandar 2.0 (eg details of the Special Economic Zone), further data centre related land sales, blockchain, e government project awards, M&As (Yinson is widely expected to deeply monetise its FPSO assets) and beneficiaries of China’s mega fiscal stimulus. A notable confidence booster is RGB International’s recent clarification that last year’s Malaysian Anti-Corruption Commission (MACC) assistance case has been resolved.

Meanwhile, concerns of lumpy forex loss for US dollar earners mostly discounted. Although the market has been wary of US dollar income earners needing to recognise lumpy forex translation losses in the upcoming reporting season (given the sharp rise in the ringgit against the USD), we retain RGB International and VS Industry in our Alpha Picks. These concerns have been mostly priced in as reflected in the stocks’ significant share price retreats from their respective highs in Sep 24, while we look forward to fresh re-rating catalysts.

$RGB / 0037 (RGB INTERNATIONAL BHD) $LAGENDA / 7179 (LAGENDA PROPERTIES BERHAD) $MYEG / 0138 (MY E.G. SERVICES BERHAD) $VS / 6963 (V.S. INDUSTRY BERHAD) $YINSON / 7293 (YINSON HOLDINGS BERHAD)

$RGB / 0037 (RGB INTERNATIONAL BHD) sharing from broker remisier

RGB International (RGB MK/BUY/RM0.395/TP:RM0.66)

Refining Foundations🪵

🔹 2Q24 result within expectations. RGB reported softer revenue of RM99.6m (-70% yoy) and net profit of RM18.9m (-29% yoy). The yoy decline is mainly due to weaker SSM sales. 1H24 bottomline profit made up only 36% of our 2024F full-year forecast, but is deemed within as we anticipate a much stronger 2H24.

🔸SSM sales still on track to hit our 2024 forecasts. SSM sales appear weaker yoy, normalizing from 2Q23’s exceptional bulk sales order of c.RM270m to Solaire North. Notably, 2Q24 SSM sales of 700 slot machines improved over historical quarterly run-rate on stronger replacement demand, leading 1H24’s 1900 slot machines sales to achieve 42% of our 2024 forecasts.

🔹 TSM posted a solid comeback with meaningful margin uptick, as revenue returned to c.95% of pre-pandemic’s level. More importantly, we’ve observed a trend of meaningful margin expansion (PBT margin +11.5ppt yoy to 20.1ppt), presumably reflecting lower OPEX, better performance and lower machines depreciation after progressive restructuring into a lease-to-own model.

🔸 Declared 0.6 sen interim dividend, bringing 1H24 dividends to 1.2sen. This implies a dividend yield of 3% and payout ratio of 45%. We retain our 2024F DPS forecasts of 2.9sen based on 40% payout ratio, which implies lush dividend yield of c.7.5%. Should management raise the dividend payout ratio to 50%, prospective yields will likely be 9-10%.

🔹 Saving the best for a fantastic 2H24. We anticipate 2H24 earnings to be substantially stronger than 1H, mainly bolstered by higher SSM delivery. To recall, RGB earlier secured a huge RM383m (US$81.3m) SSM contract from PACGOR for 1,968 slot machines. We understand that delivery and earnings translation will be in 2H24.

🔸 Bargain financial matrixes still supporting our investment thesis. RGB’s current bargain valuations of 5.4x 2024F PE (3.5x ex-cash PE) and net cash of about RM207m (c.34% of market cap) is still deep-in-value and poised for re-rating especially with strong earnings visibility in 3Q24.

🔹 Maintain BUY with unchanged target price of RM0.66, which implies 9x 2024F PE (pre-pandemic’s mean), 4x 2024F ex-cash PE, and 4.5x 2024F EV/EBITDA.

$RGB / 0037 (RGB INTERNATIONAL BHD)

28 July 2024


RGB


RGB International Bhd. (RGB) presents a compelling investment opportunity at its current price levels. Trading at a forward PE ratio of 7, the stock appears significantly undervalued.


In Q1, RGB reported an EPS of 1.44 Sen, projecting to 5.76 Sen annually if sustained. Moreover, the recent RM382 million new contract secured for FY 2024 will result in substantial earnings growth, potentially surpassing the 5.76 Sen EPS estimate. Conservatively, we estimated FY 2024 EPS at 6 Sen, and with a PE ratio between 10 to 12 suggests a fair valuation range of 60 Sen to 72 Sen.


Given these indicative valuations, investing in RGB seems is a no brainer investment decision.


Share price slides down from 49 Sen to close at 41.5 Sen. Share price was allowed to slide for 3 days before the Company gave a press statement on 25 July after Market Close below. We just wonder why the delay in clarification of no impact till share price was hit. Fund managers or market makers could have collected at a dirt-cheap price.


We understand there is no negative news affecting the Company and business is intact to achieve the management business target for FY 2024. Company had released a press statement on 25 July that –


“The Board of Directors (“the Board”) of RGB International Bhd. (“RGB”) would like to reassure all stakeholders that RGB is not affected in any way by the Philippine Offshore Gaming Operators (“POGOs”) (now known as Internet Gaming Licensees) ban. The Board would like to reiterate that no slot machines were sold to POGOs. RGB's sale of slot machines in the Philippines are only to the Philippine Amusement and Gaming Corporation (“PAGCOR”)’s licensed integrated resorts, casinos and slot club operators”.

Be mindful that on 30 May the Company’s subsidiary had secured from Philippine Amusement and Gaming Corporation (“PAGCOR”) for the Procurement of Supply and Delivery of Slot Machine Equipment for Casino Filipino Branches under ITB No. DC24-03-001COR (“the Project”) with a contract value of the Project of USD81,328,272.00 (equivalent to RM382 mil based on the exchange rate of RM4.7090 as at 30 May 2024). It was briefed to fund mangers all deliveries will be fulfilled in FY 2024 commencing from Q3. About 70% to 80% deliveries will be in Q3 and balance in Q4. We estimate this contract will contribute additional net profit amounting to about 10% on the contract amount or RM38 mil for FY 2024.


Conclusion

With no negative impact on its operations and strong growth prospects fuelled by new contracts, RGB is poised for a robust performance in FY 2024. The recent price dip may have presented a buying opportunity, potentially capitalized on by savvy investors.



Disclaimer

This publication is not a buy or sell call of the company and the contents of this publication should not be considered as professional financial investment advice or buy/sell recommendations. This publication (analysis) has been written for information purposes and general guidance on matters of interest for discussion only and does not constitute professional advice or legal opinion. The information contained in this publication (analysis) should not form the basis of any decision as to a particular course of action. You should not act upon the information contained in this publication without obtaining specific professional advice. Therefore, every investment decision and its associated risks are the responsibility of the investor.

Above analysis is prepared by the author free of charge solely for educational purpose and discussion in the group consented by the author and shall not constitute an investment advice or recommendation to sell and/or buy the share(s) mentioned in this analysis. The views are based on the author’s assumptions and estimations as of this date and subject to change, for educational and informational purposes. Please consult your licensed adviser in any of your investment decision.
We, the author and/ or sharer of this publication make no representations or warranty (expressed or implied) as to the accuracy, completeness, correctness, suitability, or validity of any information contained in our analysis and do not accept or assume any liability, responsibility or duty of care for any consequences for any errors, omissions, or delay in this information or any losses and damages arising from your reliance on the information contained in this analysis or for any decision made based on it. You should read the posts and analysis and the information at your own risk and you recognise that we shall not be held liable for any losses and damages.

You should do your own research and rely on your own evaluation to assess the merits and risks of your investment. You are therefore strongly suggested to engage the services from a competent professional financial advisor or take independent financial advice before you proceed to invest. You should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers for your investment decision.

$RGB / 0037 (RGB INTERNATIONAL BHD)

$RGB / 0037 (RGB INTERNATIONAL BHD) got this from my broker @penglam

In view of the announcement made by President Ferdinand Marcos Jr. on the ban of Philippine Offshore Gaming Operators (POGO) earlier this evening, RGB would like to highlight that there is *no impact to the Group*. Total sales to POGO in FY23 accounted for less than 0.5% of group total revenue, from the sale of playing cards and shufflers.

*What is POGO and What is the Difference to PIGO?*
POGO involves the *live streaming of table games* as well as the operation of online gaming which *does not* require physical slot machines like PIGO (Philippine Inland Gaming Operators – otherwise known as ‘remote gaming’). The clampdown on POGO has been ongoing which led to the introduction of new regulations and subsequently, Internet Gaming Licensees (IGL), last year.

RGB would like to reiterate that *no slot machines were sold to POGO*. Sale of slot machines are only to *licensed IRs, casinos and slot club operators*, therefore, guidance of 4,200 units of slot machines remain *unaffected*.

News:
https://cutt.ly/Vek7WjiD
https://cutt.ly/xek7Wkks

$RGB / 0037 (RGB INTERNATIONAL BHD) got this from my broker @penglam

In view of the announcement made by President Ferdinand Marcos Jr. on the ban of Philippine Offshore Gaming Operators (POGO) earlier this evening, RGB would like to highlight that there is *no impact to the Group*. Total sales to POGO in FY23 accounted for less than 0.5% of group total revenue, from the sale of playing cards and shufflers.

*What is POGO and What is the Difference to PIGO?*
POGO involves the *live streaming of table games* as well as the operation of online gaming which *does not* require physical slot machines like PIGO (Philippine Inland Gaming Operators – otherwise known as ‘remote gaming’). The clampdown on POGO has been ongoing which led to the introduction of new regulations and subsequently, Internet Gaming Licensees (IGL), last year.

RGB would like to reiterate that *no slot machines were sold to POGO*. Sale of slot machines are only to *licensed IRs, casinos and slot club operators*, therefore, guidance of 4,200 units of slot machines remain *unaffected*.

News:
https://cutt.ly/fek7Whnk
https://cutt.ly/Xek7Wjzn

11 July 2024

Our Stocks Watchlist

Dufu @ RM2.63 – Buy and hold for long term and Company is benefiting from both Seagate and Western Digital expected strong Q4 (June 2024) with revenue growth and volume of HDD shipped from market sources. Both Dufu’s customers are looking at further double digit % growth for Q4 June 2024

Notion @ RM1.98 – buy on weakness below RM1.80. Company reported good Q1 (EPS 1.56 Sen & PAT RM8.024 mil) and Q2 (EPS 2.72 Sen & PAT RM14.035 mil) with 1H net profit of RM22.059 mil with EPS of 4.27 Sen. The Co HDD business will be benefit from Western Digital Growth as WD is the Company’s HDD customer. Company had stated in no uncertain term that 2H will be better and we projected FY 2024 EPS to be 10 Sen

IFCAMSC @88.5 Sen – speculative and for trading purpose for short term investment. Just ride on the market momentum and business news on Einvoicing and after Q2 Report would have better feel of Company’s outlook.

ADB @RM1.28 – buy below RM1.20 and ride on the market momentum and business news on Einvoicing, after Q2 30 June Report would have better feel of outlook.

PIE @RM 6.37 – Too late to board the bus and valuation is ahead of earnings.

RGB @48 Sen) – Buy and hold when below 49 Sen. RGB is taking a breather and consolidating around 50 Sen. Valuation of 60 Sen to 72 Sen based on projected FY 2024 profit. On 31 May the Co secured a RM381 mil contract for delivery of gaming machines in FY 2024 and expected 70% delivery in Q3 and 30% in Q4. Thus, 2H will have a very strong result. Potential catalyst for further growth and to have dominance gaming machines market in Philippines with the regularization of the gaming industry and Philippines Players upgrading their facilities with the booming gaming industry. Looking at recent price volume, we think there is still leg to move up


QES now @71.5 Sen is valuable stocks to enter. Share price year range 46 Sen to 78 Sen. We heard trading of PPE for steal industries orders had been overwhelming and staff are paid above 3 mths bonus. Strong orders were shipped out in Q2 30 June and a rerating is due.

Recently secured orders from a German MNC with worldwide presence for test equipments. This could give Co to make inroad worldwide if the customer found it to be good and reliable.

Inari @RM 3.96 is probably fair valued achieving our target valuation. Better outlook and profit when their China Plant commenced operation with huge potential as Chinese semiconductors and RFID sensor Companies or Players will need Inari JVC to support their development.


ONG Companies
Deleum@ RM1.30 – good to hold and assess the co progress.

As at the end of the first quarter of 2024, Deleum maintained a strong cash position, boasting cash and bank balances ofRM279.8 million, an increase of RM63.9 million from RM215.9 million as at 31 December 2023. Shareholders’ equity remained steady at RM409.5 million as of 31 March 2024. Currently, Deleum’s order book is robust at RM594.7 million, with the majority of works and equipment slated for delivery within the next 12 months. Below is Q1 March Press Release



Coastal – just hold and no point cutting now just hold and wait for confirmation of extension of contract and new positive developments.

Ulicorp @RM2.21 – already FAIR VALUED AND achieved target valuation compared to our recommendation @RM1.40 in March.

SKB Shutters – only for investors with longer term perspective will be extensively involved with data centre buildings and waiting for Mr Market rerating

Samchem – Chemical and distribution business is seeing improvement in performance.

Bahvest @56 Sen. – Monitor closely when the BV Warrant expire on 20 Aug 2024 the share may vroom vroom. New shareholders and management would have cleaned out the mismanagement and gold pilferage.

$DUFU / 7233 (DUFU TECHNOLOGY CORP. BERHAD) $NOTION / 0083 (NOTION VTEC BERHAD) $SKBSHUT / 7115 (SKB SHUTTERS CORPORATION BERHAD) $RGB / 0037 (RGB INTERNATIONAL BHD) $DELEUM / 5132 (DELEUM BERHAD)

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - DATUK LIM TOW BOON

General Meetings: Outcome of Meeting

Titan Trading Notes For Tuesday [11/6/2024]:

$KLSE-KLCI retraced briefly back towards the 1614 points region with an overall positive market sentiment despite having over 530 counters closing red for the day. Daily trading volume surged back towards the 5.9 billion mark, which is a pretty good thing to see.

Main stocks that showed strong buying momentum would be the likes of HUBLINE, JAKS, SINKUNG, SCIB, WCT, VELESTO, JTGROUP, NOVAMSC, YNHPROP, JCY, KGW, RGB, LEFORM, SIAB, PANDA, EDUSPEC, ECOWLD, NOTION, and UEMS. All of which were able to sustain their rallies throughout the day on the top volumes list.

$JTGROUP / 0292 (JATI TINGGI GROUP BERHAD) definitely took the spotlight today as it was able to resume its bullish momentum, breaking out all the way towards the RM 0.53 regions with huge volume and buying momentum despite being overbought here.

For now as long as able to hold above its RM 0.49+ immediate support, could continue on towards and beyond the RM 0.53+ regions for a parabolic rally continuation pattern.

Will be monitoring JTGROUP closely here as something big seems to be going on.

$KGW / 0282 (KGW GROUP BERHAD) over the past month, had been able to climb steadily from its RM 0.18+ main support levels and rallied all the way towards the RM 0.255 regions today with good volume and buying momentum, forming a new all time high here.

For now looking quite bullish and as long as able to sustain above its RM 0.235+ immediate support, could continue on an uptrend towards and beyond the RM 0.28+ regions soon in the coming week.

Will be monitoring KGW as seems to have just started its engine.

$IFCAMSC / 0023 (IFCA MSC BERHAD) after consolidating over the past month with RM 0.50+ as the main support levels, was able to breakout strong form its RM 0.56+ major resistance levels and rallied all the way towards the RM 0.63 regions.

For now looking very bullish here and as long as able to hold above its RM 0.60+ immediate support, could continue on this uptrend towards and beyond the RM 0.65 - RM 0.67+ regions for an uptrend continuation pattern.

Will be monitoring IFCAMSC closely here.

$RGB / 0037 (RGB INTERNATIONAL BHD) since consolidating with RM 0.41+ as the main support levels over the past few weeks, was finally able to breakout strong today, rallying all the way towards the RM 0.46 regions with good volume and buying momentum.

For now looking very strong here and as long as able to sustain above its RM 0.44+ immediate support, could continue riding here and breakout from its RM 0.465 all time high levels to potentially test its RM 0.50+ regions.

$RGB / 0037 (RGB INTERNATIONAL BHD)

10 June 2024

RGB International Bhd (RGB) @ 42.5 Sen – A Gaming gem with valuation of 60 Sen to 72 Sen

Currently at 42.5 Sen it is trading at historical PE 10.81 based on CORE EPS of 3.93 Sen (audited EPS of 1.65 Sen for FY 2023 adding back all exceptional expenses per attached Excel Worksheet).

RGB at 42.5 Sen, presents an enticing investment opportunity with substantial upside potential. Our analysis suggests a conservative valuation range of 60 Sen to 72 Sen, reflecting a compelling 41% to 69% upside, contingent upon the Mr. Market's recognition of RGB's true value.

Valuation
Our valuation is underpinned by robust financial modelling, projecting an EPS of 6 Sen for FY 2024. This projection is supported by the recent securing of a significant contract worth RM381 million for the supply and delivery of Slot Machine Equipment in FY 2024. Based on a PE range of 10 to 12, our model suggests a fair valuation of 60 Sen to 72 Sen.

Financial Performance
RGB's Q1 FY 2024 results demonstrated a remarkable improvement over FY 2023, with a revenue of RM210 million and reported a PBT of RM25.276 mil and a PAT of RM22.005 million with EPS of 1.44 Sen. Compared to FY 2023 where the revenue was RM699 mil with PBT of RM32.79 mil (the adjusted core PBT after adding back the exceptional expenses was RM72.125 mil) and the PAT was RM34.0 mil (Core PAT = RM60.546 mil) with an EPS of 1.65 Sen (core EPS adding back exceptional items = 3.93 Sen).

Notably, the company reported no bank borrowings and maintains a healthy cash balance of RM185.5 million, indicative of its strong financial position. Additionally, RGB has consistently generated positive operating cash flow, with Q1 FY 2024 recording RM24.4 million.

Catalysts for Rerating
Several catalysts support our bullish outlook on RGB:
• Exceptional Q1 2024 results with significant growth compared to FY 2023. Q1 PAT of RM22.005 mil is 36.3% of FY 2023 Core PAT of RM60.546 per the excel worksheet attached.

• Securing a lucrative contract from Philippine Amusement and Gaming Corporation ("PAGCOR") for the supply and delivery of Slot Machine Equipment, valued at RM381 million.

• The anticipated positive contribution to earnings and net assets per share from the PAGCOR contract in FY 2024 commencing from Q3.

• At conservative net margin after tax of about 10% (we understand from investor briefing net margin range from 9% to 12% depending on order quantity), we estimated the impact after tax of the contract could be about RM38 million net profit given the Macau tax rate is 12%.

• Favourable industry dynamics driven by the resurgence of the gaming sector post-pandemic and increased demand for gaming facilities.

Strong Financial
• The Company has a cash balance of RM185.5 mil (including other investments) with no bank borrowing on 31 March 2024.

• The cash per share is about 12.04 Sen compared to the net asset of the Company of 17 Sen. The Company has been in net cash position since 2015.

• Strong business cashflow with cash generated from operation for Q1 amounted to RM24.4 mil and for FY 2023 the cash generated from operation was RM123.81 mil.

The booming tourism industry and arrival of tourists is driving up the business of gaming resorts and gaming outlets operators. We understand the gaming industry is back to pre-pandemic level and all operators are operating at optimum capacity and looking at expanding their facilities and upgrading to newer EGM (electronic gaming machine). This demand augurs well for RGB.

The Company business in Philippines (its major market) is going to benefit from new casinos scheduled to open in the next few years as well as from the privatization of 41 casinos by the Philippines Gaming Regulator (PAGCOR). Do take note that on 30 May 2024 the Company had announced its subsidiary in Macau had secured a RM381 mil new order of gaming machines from a new Casino in Philippines for deliveries in FY 2024. RGB International Bhd (“RGB”), a leading casino machine supplier has been in the gaming industry for over 30 years. As international border is now reopened, and casino licenses have been rolling out extensively to boost economy, we believe RGB is poised for a growth in FY2023 and onwards.

Investment Merits
• Group successfully secured a RM381 million contract for a new casino in Philippines to be delivered in FY 2024 which will bolster its profit.

• Exclusive distributor for two main slot machines suppliers (Light & Wonder and Aristocrat) in the Philippines where the company hopes to benefit from the casinos scheduled to open in the next few years as well as from the privatization of 41 casinos by the Philippines gaming regulator (PAGCOR).

• Increasing Gross Profit margin to about 19.4%.

• Strong Balance Sheet with Net Asset per share of 17 Sen

• Cash balance of RM185.5 mil and cash per share of 12.04 Sen per share

• Gearing: Nil

• Net positive operating Cashflow of RM24.4 mil for 3 mths FY 2024 (RM123.8 mil FY 2023)

Conclusion

A share worth to buy in on weakness @42.5 Sen with huge potential upside of 41% to 69% with a valuation of 60.0 Sen to 72.0 Sen using PE 10 to PE 12.

Share Price RM0.425
Market Capital (RM): 658.0 million
Number of Share: 1.541 billion
EPS: 3.11 Sen (4 rolling qtrs.)
Estimated FY 2024 EPS: 6.0 Sen
P/E Ratio using FY 2024 Estimated EPS: 7.08
ROE (%): 18.29%
NTA/share: RM 0.17
Share Price range (1 Year): 25.5 Sen to 46 Sen


RGB Business

RGB is a leading supplier of gaming products in Asia with over 35 years of experience in the gaming supply industry. RGB International Bhd. (“RGB” or “the Company”) was incorporated in Malaysia on 16 January 2003. RGB is an investment holding company with its subsidiaries primarily involved in: • sales and marketing, and manufacturing of EGM and equipment (“SSM”) • machine concession, technical support and management (“TSM”) • on-site technical solution, preventive maintenance and repair services for EGM and equipment (“Engineering Services”)

RGB has 3 main business segments:

1. SSM Division
The SSM division comprises the sales of EGM, casino equipment and all kinds of gaming-related parts and components. We market our proprietary products and are also the authorised distributor of gaming products for many world-renowned brands in the industry. Our clients encompass a broad spectrum ranging from major casinos in the world’s gaming industry to operators of VIP slot clubs in many Asian countries, they are well supported by our dedicated sales team who provide clients with unparalleled round the clock service.


2. TSM Division
The TSM division provides machine concession programmes to operators throughout Asia, as well as technical, management, marketing and advisory services to our customers. We have partnered with licensed operators throughout Asia, with approximately 5,000 machines stationed across 46 outlets. The revenue derived is on a profit-sharing basis with the operators of the gaming establishments.



3. Engineering Services Division

The Engineering Services division offers end-to-end support and continuous maintenance to ensure the optimal operations of both the SSM and TSM divisions. Our team of expertly trained engineers, backed by renowned gaming product manufacturers, is dedicated to providing our customers with the best possible customer support experience to meet their unique requirements. We strive to be a one-stop-shop for all customer needs, offering an efficient and comprehensive solution to any problems they may encounter. Our Engineering Services division also provides a comprehensive suite of services to support the gaming industry, including product installation, machine relocation and game conversion, gaming table equipment and utility support, product and scenario-based training solutions, EGM technical and casino management system (“CMS”) requirements consultancy for new and existing operations, EGM preventive maintenance programs, and CMS turnkey solutions. Additionally, we offer a range of gaming parts and repair services.

Our Engineering Services division supports both the SSM and TSM divisions by providing end-to-end services and continuous maintenance to ensure optimum operations. We aim to enhance our support services by understanding our customers' requirements. Furthermore, our team consists of engineers who are expertly trained by renowned gaming product manufacturers to provide the best technical support experience to our customers.

Disclaimer

This publication is not a buy or sell call for the company, and its contents should not be considered as professional financial investment advice or buy/sell recommendations. This publication (analysis) has been prepared for general guidance and discussion purposes only and does not constitute professional advice or legal opinion. The information contained in this publication (analysis) should not be the sole basis for any decision regarding a particular course of action. Specific professional advice should be obtained before acting upon the information contained in this publication.

The above analysis is prepared by the author free of charge solely for educational purposes and discussion within the group, with consent from the author, and shall not be considered as investment advice or a recommendation to sell and/or buy the shares mentioned in this analysis. The views are based on the author's assumptions and estimations as of this date and are subject to change for educational and informational purposes. Please consult your licensed adviser for any investment decisions.

We, the author and/or sharer of this publication, make no representations or warranties (expressed or implied) as to the accuracy, completeness, correctness, suitability, or validity of any information contained in our analysis and do not accept or assume any liability, responsibility, or duty of care for any consequences of errors, omissions, or delays in this information or any losses and damages arising from your reliance on the information contained in this analysis or any decisions made based on it. You should read the posts and analysis at your own risk, and you acknowledge that we shall not be held liable for any losses and damages.

You should conduct your own research and rely on your own evaluation to assess the merits and risks of your investment. It is strongly suggested that you engage the services of a competent professional financial advisor or seek independent financial advice before proceeding to invest. You should consult your stockbroker, bank manager, solicitor, accountant, or other professional advisors regarding your investment decisions.

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DATO' SERI CHUAH KIM SEAH

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - DATO’ SERI CHUAH KIM SEAH

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DATO' SERI CHUAH KIM SEAH

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - DATO’ SERI CHUAH KIM SEAH

Titan Weekend Chart Reviews

$RGB / 0037 (RGB INTERNATIONAL BHD)

Since breaking out towards the RM 0.46 major resistance levels, had been consolidating and retracing back towards its RM 0.41+ main support levels on the daily chart.

For now still holding quite well above this main support levels on the daily chart here and if able to sustain, could breakout towards and beyond the RM 0.46 major resistance levels.

Support: RM 0.41 area
Resistance: RM 0.435, RM 0.45, RM 0.46 areas

$RGB / 0037 (RGB INTERNATIONAL BHD)

KUALA LUMPUR: Shares of gaming stocks, particularly Genting Bhd, Genting Malaysia Bhd, and RGB International Bhd, saw mixed performance in morning trade following positive news flows on the sector.

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