Friday, 1 March 2013

Masterskill Education Group - Sinking Deeper Into The Red


Masterskill closed FY12 in the red with a core loss of RM28.3m, significantly higher than  our  projected net  loss of  RM20.8m.  It sank  deeper into  the  red in  4QFY12 with core  losses  of  RM12.8m.  We  attribute  this  to  continued  weakness  in  its  new registrations.  Following  the  internal  transition  of  coverage,  we  have  revisited  and revamped our financial model. We keep the stock as a NEUTRAL based on adjusted FV of RM0.63 which is tagged to 0.7x FY13 P/NTA.  
Deeper  in  red.  Masterskill’s FY12 revenue of RM148.8m was 40.5% lower y-o-y  due  to subpar student enrolments. Correspondingly, its net profit plunged 173.9% y-o-y to a core loss  of  RM28.3m  as  operating  expenses  shot  up.  On  a  quarterly  basis,  it  registered 4QFY12 revenue of RM30.3m while net losses widened to RM12.8m (66.9% q-o-q; >100% y-o-y).
Source: OSK

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