Thursday 21 June 2012

SEG International - OUTPERFORM - 21 June 2012


News  As of 20th of June, the acceptance level for the unconditional take-over Offer by Pinnacle Heritage Solutions S/B stood at 66.45% and 69.01% for SEG ordinary shares & warrants respectively.

Note that the acceptance period for the Offer has expired yesterday.

To recap, Pinnacle Heritage Solutions S/B had tabled a cash offer price of RM1.714 and RM1.214 per SEG Share and Warrant respectively on 25 April 2012.

Comments  The lacklustre response from the minority shareholders seems to echo our view of the unattractive offer price.

Based on the above uninspiring acceptance level, SEG's listing status is likely to remain unchanged.

Outlook It remains bright underpinned by more new programmes to be introduced within this year (20-30 programmes) particularly from an increasing number of SEG University College’s own homegrown programmes (e.g. medical science), which enjoy higher margins compared to other programmes.

Forecast FY12-FY13E forecasts remain unchanged.

Rating OUTPERFORM rating remains unchanged.

Valuation  Maintaining our SEG’s fair value of RM2.19 based on a targeted FY12 PER of 12.5x (+1SD).
 
Risks A slowdown in student enrolments.

Source: Kenanga

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