Our spot price for JIN is $10.80. Our 12-month target price is $11.80 per share, which is based on the blended valuation rolled forward at the cost of equity of 13.1% less the next 12-months of dividends to be paid.  Our blended valuation is the weighted average of our:


1. DCF valuation of $13.20 per share (33% weighting);
2. SOTP valuation of $9.60 per share (33%);
3. Relative valuation of $10.10 per share (33%).


Our 10-year DCF valuation is derived using a beta of 1.3 and a WACC of 12.3%. We use a risk-free rate of 4.3% and a terminal growth rate of 4.0%.


Our sum-of-the-parts valuation implies a ~7x multiple on our FY27e EBITDA forecasts. We apply an 8x multiple on the Lotteries business but a 6x multiple on the other segments given they are lower quality. We value the Lottery Retailing and SaaS businesses at a discount to peers to reflect the slower growth outlook over FY26-27e.


Our relative valuation is derived by applying a ~13x multiple to FY27e EPS forecasts. The 13x multiple is at a ~25% discount to the ASX Small Industrial Index, which reflects the downside earnings risks in JIN.

We see the following  risks to our valuation: i) contract renewal with TLC (2030) and Lotterywest (2027); ii) potential RFR win in Lotterywest; iii) slower than expected growth in overall lottery turnover for the market iv) weaker growth in digital penetration of lottery sales; v) increased competition in international charity lotteries; and vi) loss of key charity customers.

If the impact on the company from any of these factors proves to be greater than we anticipate, the stock will likely have difficulty achieving our financial price targets. Conversely, if any of these factors proves to have less of an effect than we anticipate, the stock could outperform our target.