We caught up with Masterskill’s management
recently and gather that its new business and law school will commence in June
2013. Management is also considering various approaches to asset-light strategy,
including potential disposals or a sale and leaseback of its assets. All in, we
maintain NEUTRAL, with our FV lowered to RM0.61, based on an unchanged 0.7x
FY13 P/NTA.
Diversifying its offerings. The group had previously announced
that it had acquired the Bangunan Takaful Ikhlas (BTI) in Petaling Jaya to
accommodate students of its non-healthcare courses. The new campus in Petaling
Jaya will offer foundation and degree courses in business and law, with annual
tuition fees averaging RM14k per student, and which will be commencing in June
this year. Management has guided for a target intake of 1.2k business students
for FY13. The group has also changed its name to Asia Metropolitan University
to define its expansion into non-healthcare courses, which we believe would improve
its branding and create more awareness among potential students.
Potential cash return. Masterskill announced on 22 Feb
that it will adopt an asset-light strategy and is studying options such as
disposals or the sale and leaseback of its assets. After meeting with
management, we gather that the group would return the excess cash to its
existing shareholders upon retiring its outstanding debts. Assuming that all
its fixed assets are disposed of at their current book values, this could
potentially translate into a cash bumper dividend of 36.6 sen to be paid to
existing shareholders after settling all debts.
Maintain NEUTRAL. We like Masterskill’s diversification into
non-healthcare courses but remain cautious pending earnings contributions from
its business school as well as more clarity on its proposed asset disposal
plans, which could potentially unravel the value of its core operating assets.
Overall, we are not changing our forecasts at this juncture and remain NEUTRAL,
with our FV lowered to RM0.61, pegged to an existing 0.7x FY13 P/NTA.
Source: RHB
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