It will be curtains off Prestariang’s new IT university, named University Malaysia of Computer Science & Engineering, at the end of this month. The company is also in the midst of talks with top O&G companies in relation to the provision of O&G-related training. We maintain our BUY call, with our FV unchanged at RM2.15, based on 10x FY13 PER.
Unveiling University Malaysia. After securing all the necessary approvals from the Ministry of Higher Education to set up a university on 22 June 2012, Prestariang will be launching University Malaysia of Computer Science & Engineering at the end of this month. The 31 Jan 2013 launch will be held at the university’s temporary campus at the Mahindra Satyam Malaysia Global Centre in Cyberjaya. The target maiden intake of 300 students will commence classes in April, to be followed by another intake in September. Assuming an average annual tuition fee of RM30,000 per student, we expect the university to contribute RM1.3m to Prestariang’s bottomline for FY13. We estimate that at the full capacity of 3,000 students, this could potentially translate into core earnings of RM15m to RM20m annually.
Bright prospects in O&G training. Prestariang recently secured a RM4.8m contract from the Ministry of Finance to provide O&G training to 360 students for a period of three months. This foray into O&G-related training has encouraged the group to take more steps forward. According to our estimates, this contract works out to RM13,000 per student, which we deem highly profitable due to the light opex and short term nature of such programmes. We gather that management is now in talks with a few big O&G companies in relation to offering Auto-Desk software and professional training programmes.
Reiterate BUY. Now that the new university is ready to take off while management actively explores other O&G training opportunities, we continue to see potential in the company, especially in view of its appealing valuation. As we do not expect major surprises in the upcoming 4QFY12 results due for release in mid-February, we are maintaining our BUY call, with our FV unchanged at RM2.15, based on a 10x FY13 PE.
Unveiling University Malaysia. After securing all the necessary approvals from the Ministry of Higher Education to set up a university on 22 June 2012, Prestariang will be launching University Malaysia of Computer Science & Engineering at the end of this month. The 31 Jan 2013 launch will be held at the university’s temporary campus at the Mahindra Satyam Malaysia Global Centre in Cyberjaya. The target maiden intake of 300 students will commence classes in April, to be followed by another intake in September. Assuming an average annual tuition fee of RM30,000 per student, we expect the university to contribute RM1.3m to Prestariang’s bottomline for FY13. We estimate that at the full capacity of 3,000 students, this could potentially translate into core earnings of RM15m to RM20m annually.
Bright prospects in O&G training. Prestariang recently secured a RM4.8m contract from the Ministry of Finance to provide O&G training to 360 students for a period of three months. This foray into O&G-related training has encouraged the group to take more steps forward. According to our estimates, this contract works out to RM13,000 per student, which we deem highly profitable due to the light opex and short term nature of such programmes. We gather that management is now in talks with a few big O&G companies in relation to offering Auto-Desk software and professional training programmes.
Reiterate BUY. Now that the new university is ready to take off while management actively explores other O&G training opportunities, we continue to see potential in the company, especially in view of its appealing valuation. As we do not expect major surprises in the upcoming 4QFY12 results due for release in mid-February, we are maintaining our BUY call, with our FV unchanged at RM2.15, based on a 10x FY13 PE.
OTHER HIGHLIGHTS
4QFY12 likely in line. Recall that as of 9MFY12, Prestariang recorded net profit of RM26.9m. We believe 4QFY12 numbers to be likely in line with our expectations with core net profit forecast of RM11.1m. We continue to believe that the group would likely incur a one-off exceptional expense of RM2m to RM3m in setting up the university during the quarter. The company recorded a YTD dividend payout of 7.0 sen and we expect the company to pay another 3.0 sen in 4QFY12, followed by 11.0 sen in FY13 and 12.0 in FY14 which would result in a lucrative yield of over 8% p.a. over the next three years.
Source: OSK
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