Earlier, NFO outlets were ordered to close temporarily following the implementation of the third Movement Control Order (MCO 3.0) on June 1. Analysts said the reopening of NFOs outlets in mid-September is in line with their expectations and is expected to lift sentiment on gaming stocks. “Based on observations in past MCOs, we expect NFO sales to recover gradually at first and then swiftly rebound to 60%-70%/80%-85% of pre-pandemic levels after just 0.5/one month post-reopening (by end-September/mid-October). Hence, we see Magnum and BToto both posting core net losses for 3QCY21 before returning to the black in 4QCY21,” they said. Lam and Foong also reiterated their “overweight” call on the gaming sector, with the key potential rerating catalyst for the sector being a full NFO sales recovery towards end-CY21.
