The controlling block of shares attracts at least two parties
PETALING JAYA: A controlling block of shares in Masterskill Education Group Bhd may be up for sale with at least two parties said to be interested.
Sources said the block of shares up for sale could come from existing major shareholders who are interested in having a strong, strategic partner come into Masterskill.
Among the interested parties are said to be a government-linked fund, which has a presence in healthcare and would like to extend the education aspect of that sector. Another party is said to be large education group.
The top substantial shareholders of Masterskill are founder Datuk Seri Edmund Santhara with 22.1%, private equity firm Crescent Point with 21.5% and Siva Kumar Jeyapalan with a 10% stake.
Endless woes: Masterskill is facing low student enrolment arising from the higher nursing minimum entry requirements
Heavy trading volume was seen recently after the emergence of Siva as a substantial shareholder of the education group, following his acquisition of 41.2 million shares, or a 10.05% stake on Oct 5.
When contacted, Siva downplayed any likelihood of a sale and only said he would consider to exit the group if the price offered is comfortable for him.
“I acquired the shares from the open market and I believe in the business and the opportunities it present, which is worth more than what it is trading at right now,” he said.
He also expressed his disappointment at the group's recently announced quarterly results.
“To be very blunt, I am not happy with the results. The board needs to buck up and I have made known my concerns to the board,” he said.
Masterskill's third quarter ended Sept 30, 2011 saw its net profit plunging by a significant 78% year-on-year to RM5.5mil from RM26.18mil. Revenue shrank by 24% to RM61.2mil. It stated that part of the reasons for the declining numbers was weak student intakes.
Masterskill has been faced with low student enrolment arising from the higher nursing minimum entry requirements, coupled with a shift in industry trend whereby fewer students are pursuing diploma courses in private education institutions.
There seems to be no end to Masterskill's woes as the group was dealt with another setback when the National Higher Education Fund proposed to reduce loans for students studying at high educational institutions.
Before Masterskill was listed, Siva was the founding member of the group before he sold his stake to Crescent Point back in 2006.
Meanwhile, Edmund could not be reached for comment.
The stock has fallen sharply from its IPO price of RM3.80 in May last year, and reached an all-time low of RM1.06 on Oct 3.
The counter is currently trading near its all-time low at RM1.09 and at a price to earnings ratio of only 5.79 times.
It was speculated last year that Crescent Point was looking to sell their stake in Masterskill in a deal that could fetch more than US$200mil.
Showing posts with label MEGB. Show all posts
Showing posts with label MEGB. Show all posts
Sunday, December 18, 2011
Tuesday, November 22, 2011
Masterskill 3QFY11 continues to disappoint
Written by Financial Daily
Tuesday, 22 November 2011 10:53
Masterskill Education Group Bhd
(Nov 21, RM1.16)
Maintain fully valued at RM1.20 with revised target price of 70 sen (from RM1.20): Masterskill’s 3QFY11 net profit plunged 78.8% year-on-year (y-o-y) and 52.1% quarter-on-quarter (q-o-q) to RM5.5 million. This brings 9MFY11 net profit to RM39.7 million or 52.5% of our initial full-year estimate, way below expectation. Revenue for 3QFY11shrank to RM61.2 million (-24.1% y-o-y, -7% q-o-q) on the back of weak new student intake (1,800 year-to-date, below the circa 3,000 students that graduated in September 2011). This, coupled with rising overhead costs (attributable to teaching staff, depreciation and other administration costs), dragged down operating margin to 15.9% (3QFY10: 40.7%, 2QFY11: 15.4%).
Masterskill has been struggling to draw in more new students due to: (i) a more competitive health science education landscape; (ii) a shift in industry trend whereby fewer students are pursuing diploma courses in private education institutions; (iii) lower National Higher Education Fund (PTPTN) funding limit; and (iv) higher minimum entry requirement for nursing programmes.
Following the disappointing 3QFY11, we have cut FY11F to FY13F earnings by 38% to 43% as we factor in lower new student intakes of 2,100 (from 4,000) in FY11F and 4,500 (from 5,100) in FY12F (when there could be a higher number of new students for its degree programmes and new courses as Masterskill embarks on fresh initiatives to diversify its income profile).
We have also trimmed our dividend payout assumption to 40% (from 50%), which translates to dividend per share of 4.4 sen (of which 4.2 sen has just been declared) or a prospective 3.7% net yield for FY11F. Masterskill may want to conserve cash for its capital expenditure requirements amid a weak earnings outlook. Maintain “fully valued” with a revised target price of 70 sen (from RM1.20) based on nine times FY12F earnings per share with support from its existing net cash balance of RM121.6 million, or 30 sen per share. — HwangDBS Vickers Research, Nov 21
This article appeared in The Edge Financial Daily, November 22, 2011.
Tuesday, 22 November 2011 10:53
Masterskill Education Group Bhd
(Nov 21, RM1.16)
Maintain fully valued at RM1.20 with revised target price of 70 sen (from RM1.20): Masterskill’s 3QFY11 net profit plunged 78.8% year-on-year (y-o-y) and 52.1% quarter-on-quarter (q-o-q) to RM5.5 million. This brings 9MFY11 net profit to RM39.7 million or 52.5% of our initial full-year estimate, way below expectation. Revenue for 3QFY11shrank to RM61.2 million (-24.1% y-o-y, -7% q-o-q) on the back of weak new student intake (1,800 year-to-date, below the circa 3,000 students that graduated in September 2011). This, coupled with rising overhead costs (attributable to teaching staff, depreciation and other administration costs), dragged down operating margin to 15.9% (3QFY10: 40.7%, 2QFY11: 15.4%).
Masterskill has been struggling to draw in more new students due to: (i) a more competitive health science education landscape; (ii) a shift in industry trend whereby fewer students are pursuing diploma courses in private education institutions; (iii) lower National Higher Education Fund (PTPTN) funding limit; and (iv) higher minimum entry requirement for nursing programmes.
Following the disappointing 3QFY11, we have cut FY11F to FY13F earnings by 38% to 43% as we factor in lower new student intakes of 2,100 (from 4,000) in FY11F and 4,500 (from 5,100) in FY12F (when there could be a higher number of new students for its degree programmes and new courses as Masterskill embarks on fresh initiatives to diversify its income profile).
We have also trimmed our dividend payout assumption to 40% (from 50%), which translates to dividend per share of 4.4 sen (of which 4.2 sen has just been declared) or a prospective 3.7% net yield for FY11F. Masterskill may want to conserve cash for its capital expenditure requirements amid a weak earnings outlook. Maintain “fully valued” with a revised target price of 70 sen (from RM1.20) based on nine times FY12F earnings per share with support from its existing net cash balance of RM121.6 million, or 30 sen per share. — HwangDBS Vickers Research, Nov 21
This article appeared in The Edge Financial Daily, November 22, 2011.
Wednesday, November 9, 2011
No end to Masterskill’s PTPTN worries
| Written by Joanne Nayagam | |||
| Wednesday, 09 November 2011 10:59 |
KUALA LUMPUR: Masterskill Education Group Bhd may see more woes ahead. The group was dealt another setback when the National Higher Education Fund (PTPTN) proposed to reduce loans for students studying at higher educational institutions.
It was reported over the weekend that PTPTN chairman Datuk Ismail Mohamed Said said the corporation had decided to make the cut as there was a large pool of borrowers and loan defaults. He reportedly said loans will continue to cover education and tuition fees, but not living expenses, and will commence in 2013.
Ismail was later quoted as clarifying that it was a proposal and that the final decision would be made by the government.
Potential cuts in funding or disbursement of PTPTN loans have long been a major worry for Masterskill as about 95% of its students depend on them. These concerns started emerging last year on reports that PTPTN saw a rising number of defaults which could limit future funding for these loans.
The concerns and foreign selling have driven the stock sharply lower since the fourth quarter last year and lately there is renewed buying interest.
Last week, Masterskill’s stock jumped from RM1.29 on Monday and Tuesday to RM1.39 on Wednesday before closing at RM1.36 on Friday on heavy volume.
 |
| Masterskill faces prospects of lower enrolment figures as competition for tertiary students heats up. |
The renewed interest is despite the fact that analysts have raised concerns about the prospects of lower enrolment numbers as competition to attract tertiary students heats up.
OSK Research reported last week that “new enrolments in the supposedly major student intake period from September to mid-October are likely to have fallen to the tune of a few hundreds”.
If the proposal is accepted, then the change in loan policy could possibly mean lower student intakes in the future for Masterskill, CIMB Research said in its report yesterday.
“PTPTN recently reduced the loan eligibility for healthcare-related courses from RM60,000 to RM45,000, which is lower than Masterskill’s RM52,000 average three-year course fees for diploma in nursing,” said the report. “As the RM45,000 does not include coverage for student expenses, it should not have a revenue impact on the group. But the decision to stop loans on expenses, though not immediate, is likely to dampen student enrolment.”
Leveraging on such sentiment, the research house lowered its price-to-earnings ratio (PER) target for the group to 7.6 times from 8.7 times, with a reduced price target of RM1.46 from RM1.71. It maintained a “neutral” recommendation on the stock.
Even though the report did not strike out a possible mild rebound in student numbers in the fourth quarter, the 2HFY11 earnings are unlikely to surpass that of 1HFY11 “due to the continued impact of a higher lecturer and staff cost”.
The 1HFY11 results were already lower than previously. Revenue was at RM139.47 million, 9.5% lower year-on-year (y-o-y), than the RM154.15 million posted last year. Net profit fell 30.42% y-o-y to RM34.17 million from RM49.11 million.
CIMB Research has cut its FY11 to FY13 student numbers forecast for Masterskill by 1% to 5% to between 17,000 and 19,000. It expects student growth to be 6%-7% (compared with 8%-9% previously) for the next three years.
CIMB also said in the report the recent share price rebound is “not sustainable” and expects the upcoming 3QFY11 to be weaker quarter-on-quarter.
Masterskill’s 3Q financial results are expected to be released next week (Nov 18) and investors will be waiting to know the group’s plans on how to tackle the PTPTN issue and student growth uncertainties.
This article appeared in The Edge Financial Daily, November 9, 2011.
Monday, October 17, 2011
Headwinds for education stocks
KUALA LUMPUR: The education sector was once an investor darling, but counters like HELP International Corp Bhd and Masterskill Education Group Bhd have headed south due to sector-wide over-expansion, rising competition and lower student intake.
Last month, RHB Research downgraded the sector to “neutral” on fears of a weak market outlook.
“We are turning cautious on prospects for the education sector in the coming quarter given rising macroeconomic headwinds, illiquidity of the stock in the sector, the relative small market cap of education stocks, and high foreign ownership,” it said in the Sept 29 report.
It downgraded HELP and Masterskill to “underperform” from “outperform” and “market perform”, while maintaining an “outperform” call on SEG International Bhd (SEGi).
RHB Research said education stocks were driven by Economic Transformation Programme (ETP) news flow in the past, but now the excitement has begun to recede.
“Entry point-projects (EPP) involving SEGi, such as the establishment of the Early Childhood Care and Education (ECCE) hub and the SkillsMalaysia INVITE programme, are already underway, while the announcement of the gradual liberalisation of the education sector under the Strategic Reform Initiatives is already priced in,” it said.
The research house has cut its FY12 price-earnings ratio (PER) by one or two times for the sector as its previous valuations were “overly optimistic” given the bearish outlook.
The poor outlook for the sector may be evident from the poor showing in financial results for some companies.
For 3QFY11 ended July 31, HELP’s net profit dived 92% to RM245,000 compared with RM3.24 million a year earlier. Its revenue, however, was flattish at RM23.96 million compared with RM23.38 million a year ago. For the nine months to July 2011, HELP’s net profit fell 25% to RM9.48 million, despite a 2.3% increase in revenue to RM79.63 million.
Similarly, Masterskill’s net profit fell 48% to RM11.58 million for 2QFY11 ended June 30, compared with RM22.43 million a year earlier.
Adam Chan Eu-Khin, HELP director of corporate planning, said the drastic fall in profit was mainly due to a one-off RM5 million cost to relocate its HELP ICT College from Klang to Fraser Business Park in Kuala Lumpur.
“As a result, we had to delay enrolment for our new courses as well,” he said.
Analysts, however, have noted that HELP’s earnings would still be flattish on a year-on-year basis without the RM5 million relocation cost.
“The delay caused HELP to postpone enrolment and marketing campaigns for new courses for the January/March intakes this year, which were reflected mostly in the 2QFY11 numbers,” said InsiderAsia in a recent report. It added that with HELP’s promotion to university status, it had to increase its manpower costs.
HELP was elevated to full university status in September, joining the ranks of the country’s 26 private universities.
HELP also saw its intake in Vietnam postponed due to a quality test by the government earlier this year, and had to incur cost to transfer its twinning programmes from HELP University College to HELP Academy.
Despite these headwinds, HELP is optimistic for better days ahead.
“The Vietnamese government has given the green light and we now have 50 students. We are beginning to market and recruit more students and hope to enroll 200 students by end-2012,” said Chan. He added it will also begin marketing to recruit more students after the relocation of its facility to Fraser Business Park.
Chan noted that the weakening US dollar has caused many Chinese students to pursue their education directly in the US and UK instead of Malaysia, and this will be a continuing trend in the future.
He added that given the recent termination of the joint-venture (JV) with Asia Pacific Land Bhd (AP Land), HELP will postpone its expansion plans in China indefinitely.
OSK Research analyst Kong Heng Siong said the termination of the JV with AP Land is a blessing in disguise as HELP would then be able to focus on marketing and improving its operations in the local and Southeast Asia markets.
“If you look at HELP’s operations, it has a firmer presence in Southeast Asia than China. It should definitely focus on recruiting students in this market as Malaysia will become a very attractive destination for tertiary education for those who cannot afford to go to US and UK,” he said.
Kong said he is unperturbed with the RM5 million relocation cost and expenditure to hire new staff, as the “short-term pain” is necessary to secure long-term growth for the group.
“However, HELP is still a niche player and it needs to diversify its offering in order to be able to attract more students in the future. HELP is expanding now, but it needs to ensure that it has enough students to fill the capacity,” he said.
An analyst with InsiderAsia noted that SEGi had experienced a similar gestation period when it expanded in the past, and is confident HELP’s earnings growth will recover in the future.
He said SEGi took a long while to digest all its acquisitions, brands and products.
“It was only in early 2010 that investors really took notice of SEGi’s turnaround and the stock price surged,” he said.
Earlier in the decade, SEGi’s profitability was low. Between 2001 and 2005, it offered courses under different brand names, such as Prime and Systematic. In 2006, the company streamlined its operations and consolidated into six large branches, including its flagship campus in Kota Damansara and used a single “SEGi” brand name.
By 2008, the fruit of the exercise was reaped, as SEGi’s pre-tax profit soared to RM9.88 million from RM2.48 million in 2007. It rose further to RM14.61 million in 2009 and RM54.31 million in 2010.
While the opening of the Fraser Business Park branch this year and the new Subang 2 campus in 2013 could cause some volatility in HELP’s medium-term earnings, the analyst is optimistic it will set the foundation for stronger growth in the future. “HELP is investing for the future,” he said, adding that another avenue for growth is its planned diversification into the lucrative private secondary education segment.
Kong said there are few catalysts that would re-rate HELP at the moment but there could be a minor improvement in profit for 4Q, depending on student intake in September. He added that HELP could propose a capital exercise to raise funds to build its flagship campus at Subang 2, which would also make its shares more liquid. OSK Research has a fair value of RM1.99 for HELP.
As for Masterskill, Kong said the stock has been battered down due to late student intake and reduction of National Higher Education Fund (PTPTN) loan approvals. About 95% of Masterskill students depend on PTPTN for funding.
“Masterskill has also seen some new competition in the healthcare education business. Just like HELP, Masterskill will need to diversify its offering,” he said.
OSK Research has a “trading buy” call on Masterskill with fair value of RM1.91.
Masterskill now has to contend with a new competitor in the form of KPJ Healthcare Bhd, Malaysia’s largest private hospital operator.
In July, KPJ’s education subsidiary, KPJ International College of Nursing and Health Sciences (KPJIUC), attained university college status, giving it a boost in academic standing and the ability to grant its own degrees. KPJ plans to invest RM120 million to expand its Nilai campus and aims to see a student enrolment of 10,000 by 2015.
Datin Siti Sa’diah Sheikh Bakir, KPJ managing director, has said the institution aims to acquire the status of a full-fledged university by 2016.
KPJ has a large infrastructure of hospitals, doctors and nursing staff which can support its courses, provide its students on-the-job training and give them future employment opportunities.
While Masterskill has no hospitals, it may have better economies of scale, with a revenue base about 10 times higher and a student base seven times larger than KPJIUC’s.
HELP has lost 40.5% from its 52-week high of RM2.84 to last Friday’s close of RM1.69, while Masterskill has fallen 66.3% from its year-high of RM3.49 to RM1.18 last Friday.
Among the education stocks, SEGi stands as both OSK Research and RHB Research’s top picks.
“In the education business, size does matter. SEGi currently has a very diversified offering and is focusing on the middle-income group that forms a large population here. There is also room to grow its student number from 25,000 currently to its full capacity of 30,000,” he said.
SEGi saw its net profit grow 78% to RM36.25 million for 1HFY11 ended June, on the back of RM137.7 million in revenue. Its share price, however, has fallen 19.2% from a recent high of RM2.08 in July to RM1.68 last Friday.
“SEGi is still our pick for the sector, due to its good track record and resilience in riding out market uncertainties. SEGi deservedly trades at a premium to its peers at 12.8 times FY12 PER (HELP at 12.6 and Masterskill 8.8 times), supported by its superior compound annual growth rate of 26.3% (HELP 7.7% and Masterskill -19.6%).
We continue to believe that SEGi is best poised to deliver growth going forward,” said RHB Research.
Apart from SEGi, OSK Research is also upbeat on Bursa Malaysia newcomer Prestariang Bhd, which offers ICT certification and distribution of software licences.
“Prestariang has a very secure business model with a good response to its courses by both graduates and undergraduates. Other stocks are expected to see gradual earnings growth, but Prestariang is expected to see its earnings grow by more than 50% for FY11,” said Kong, who added the counter has an attractive low single-digit valuation.
Listed on July 27, Prestariang posted RM12.99 million in net profit and RM45.99 million revenue for 1HFY11 ended June 30. However, its stock has since fallen 25.6% from its IPO price of 90 sen to Friday’s close of 67 sen.
Prestariang currently has an order book of RM280 million, with projects until 2015. It also counts international players such as Microsoft, Oracle, IBM and Autodesk as partners.
Alexander Chia of RHB Research said in the midst of waning global market sentiment, investors are more inclined to invest in defensive stocks.
“With a global recession looking possible next year, defensive stocks are in favour. In addition, investors looking to bottom fish to benefit from a near-term market bounce, would likely gravitate to higher beta issues that have seen a sharp selldown,” he said.
He added that although there is long-term growth potential for the education sector, HELP is a rather illiquid stock, which does not make it attractive for investors given the bearish market environment.
Although education is a non-cyclical sector, the headwinds faced by some players have been a drag on their performance and it remains to be seen when these will blow over.
This article appeared in The Edge Financial Daily, Ocotber 17, 2011.
Last month, RHB Research downgraded the sector to “neutral” on fears of a weak market outlook.
“We are turning cautious on prospects for the education sector in the coming quarter given rising macroeconomic headwinds, illiquidity of the stock in the sector, the relative small market cap of education stocks, and high foreign ownership,” it said in the Sept 29 report.
It downgraded HELP and Masterskill to “underperform” from “outperform” and “market perform”, while maintaining an “outperform” call on SEG International Bhd (SEGi).
RHB Research said education stocks were driven by Economic Transformation Programme (ETP) news flow in the past, but now the excitement has begun to recede.
“Entry point-projects (EPP) involving SEGi, such as the establishment of the Early Childhood Care and Education (ECCE) hub and the SkillsMalaysia INVITE programme, are already underway, while the announcement of the gradual liberalisation of the education sector under the Strategic Reform Initiatives is already priced in,” it said.
The research house has cut its FY12 price-earnings ratio (PER) by one or two times for the sector as its previous valuations were “overly optimistic” given the bearish outlook.
The poor outlook for the sector may be evident from the poor showing in financial results for some companies.
For 3QFY11 ended July 31, HELP’s net profit dived 92% to RM245,000 compared with RM3.24 million a year earlier. Its revenue, however, was flattish at RM23.96 million compared with RM23.38 million a year ago. For the nine months to July 2011, HELP’s net profit fell 25% to RM9.48 million, despite a 2.3% increase in revenue to RM79.63 million.
 |
 |
Adam Chan Eu-Khin, HELP director of corporate planning, said the drastic fall in profit was mainly due to a one-off RM5 million cost to relocate its HELP ICT College from Klang to Fraser Business Park in Kuala Lumpur.
“As a result, we had to delay enrolment for our new courses as well,” he said.
Analysts, however, have noted that HELP’s earnings would still be flattish on a year-on-year basis without the RM5 million relocation cost.
“The delay caused HELP to postpone enrolment and marketing campaigns for new courses for the January/March intakes this year, which were reflected mostly in the 2QFY11 numbers,” said InsiderAsia in a recent report. It added that with HELP’s promotion to university status, it had to increase its manpower costs.
HELP was elevated to full university status in September, joining the ranks of the country’s 26 private universities.
HELP also saw its intake in Vietnam postponed due to a quality test by the government earlier this year, and had to incur cost to transfer its twinning programmes from HELP University College to HELP Academy.
Despite these headwinds, HELP is optimistic for better days ahead.
“The Vietnamese government has given the green light and we now have 50 students. We are beginning to market and recruit more students and hope to enroll 200 students by end-2012,” said Chan. He added it will also begin marketing to recruit more students after the relocation of its facility to Fraser Business Park.
Chan noted that the weakening US dollar has caused many Chinese students to pursue their education directly in the US and UK instead of Malaysia, and this will be a continuing trend in the future.
He added that given the recent termination of the joint-venture (JV) with Asia Pacific Land Bhd (AP Land), HELP will postpone its expansion plans in China indefinitely.
OSK Research analyst Kong Heng Siong said the termination of the JV with AP Land is a blessing in disguise as HELP would then be able to focus on marketing and improving its operations in the local and Southeast Asia markets.
“If you look at HELP’s operations, it has a firmer presence in Southeast Asia than China. It should definitely focus on recruiting students in this market as Malaysia will become a very attractive destination for tertiary education for those who cannot afford to go to US and UK,” he said.
Kong said he is unperturbed with the RM5 million relocation cost and expenditure to hire new staff, as the “short-term pain” is necessary to secure long-term growth for the group.
“However, HELP is still a niche player and it needs to diversify its offering in order to be able to attract more students in the future. HELP is expanding now, but it needs to ensure that it has enough students to fill the capacity,” he said.
An analyst with InsiderAsia noted that SEGi had experienced a similar gestation period when it expanded in the past, and is confident HELP’s earnings growth will recover in the future.
He said SEGi took a long while to digest all its acquisitions, brands and products.
“It was only in early 2010 that investors really took notice of SEGi’s turnaround and the stock price surged,” he said.
Earlier in the decade, SEGi’s profitability was low. Between 2001 and 2005, it offered courses under different brand names, such as Prime and Systematic. In 2006, the company streamlined its operations and consolidated into six large branches, including its flagship campus in Kota Damansara and used a single “SEGi” brand name.
By 2008, the fruit of the exercise was reaped, as SEGi’s pre-tax profit soared to RM9.88 million from RM2.48 million in 2007. It rose further to RM14.61 million in 2009 and RM54.31 million in 2010.
While the opening of the Fraser Business Park branch this year and the new Subang 2 campus in 2013 could cause some volatility in HELP’s medium-term earnings, the analyst is optimistic it will set the foundation for stronger growth in the future. “HELP is investing for the future,” he said, adding that another avenue for growth is its planned diversification into the lucrative private secondary education segment.
Kong said there are few catalysts that would re-rate HELP at the moment but there could be a minor improvement in profit for 4Q, depending on student intake in September. He added that HELP could propose a capital exercise to raise funds to build its flagship campus at Subang 2, which would also make its shares more liquid. OSK Research has a fair value of RM1.99 for HELP.
As for Masterskill, Kong said the stock has been battered down due to late student intake and reduction of National Higher Education Fund (PTPTN) loan approvals. About 95% of Masterskill students depend on PTPTN for funding.
“Masterskill has also seen some new competition in the healthcare education business. Just like HELP, Masterskill will need to diversify its offering,” he said.
OSK Research has a “trading buy” call on Masterskill with fair value of RM1.91.
Masterskill now has to contend with a new competitor in the form of KPJ Healthcare Bhd, Malaysia’s largest private hospital operator.
In July, KPJ’s education subsidiary, KPJ International College of Nursing and Health Sciences (KPJIUC), attained university college status, giving it a boost in academic standing and the ability to grant its own degrees. KPJ plans to invest RM120 million to expand its Nilai campus and aims to see a student enrolment of 10,000 by 2015.
Datin Siti Sa’diah Sheikh Bakir, KPJ managing director, has said the institution aims to acquire the status of a full-fledged university by 2016.
KPJ has a large infrastructure of hospitals, doctors and nursing staff which can support its courses, provide its students on-the-job training and give them future employment opportunities.
While Masterskill has no hospitals, it may have better economies of scale, with a revenue base about 10 times higher and a student base seven times larger than KPJIUC’s.
HELP has lost 40.5% from its 52-week high of RM2.84 to last Friday’s close of RM1.69, while Masterskill has fallen 66.3% from its year-high of RM3.49 to RM1.18 last Friday.
Among the education stocks, SEGi stands as both OSK Research and RHB Research’s top picks.
“In the education business, size does matter. SEGi currently has a very diversified offering and is focusing on the middle-income group that forms a large population here. There is also room to grow its student number from 25,000 currently to its full capacity of 30,000,” he said.
SEGi saw its net profit grow 78% to RM36.25 million for 1HFY11 ended June, on the back of RM137.7 million in revenue. Its share price, however, has fallen 19.2% from a recent high of RM2.08 in July to RM1.68 last Friday.
“SEGi is still our pick for the sector, due to its good track record and resilience in riding out market uncertainties. SEGi deservedly trades at a premium to its peers at 12.8 times FY12 PER (HELP at 12.6 and Masterskill 8.8 times), supported by its superior compound annual growth rate of 26.3% (HELP 7.7% and Masterskill -19.6%).
We continue to believe that SEGi is best poised to deliver growth going forward,” said RHB Research.
Apart from SEGi, OSK Research is also upbeat on Bursa Malaysia newcomer Prestariang Bhd, which offers ICT certification and distribution of software licences.
“Prestariang has a very secure business model with a good response to its courses by both graduates and undergraduates. Other stocks are expected to see gradual earnings growth, but Prestariang is expected to see its earnings grow by more than 50% for FY11,” said Kong, who added the counter has an attractive low single-digit valuation.
Listed on July 27, Prestariang posted RM12.99 million in net profit and RM45.99 million revenue for 1HFY11 ended June 30. However, its stock has since fallen 25.6% from its IPO price of 90 sen to Friday’s close of 67 sen.
Prestariang currently has an order book of RM280 million, with projects until 2015. It also counts international players such as Microsoft, Oracle, IBM and Autodesk as partners.
Alexander Chia of RHB Research said in the midst of waning global market sentiment, investors are more inclined to invest in defensive stocks.
“With a global recession looking possible next year, defensive stocks are in favour. In addition, investors looking to bottom fish to benefit from a near-term market bounce, would likely gravitate to higher beta issues that have seen a sharp selldown,” he said.
He added that although there is long-term growth potential for the education sector, HELP is a rather illiquid stock, which does not make it attractive for investors given the bearish market environment.
Although education is a non-cyclical sector, the headwinds faced by some players have been a drag on their performance and it remains to be seen when these will blow over.
This article appeared in The Edge Financial Daily, Ocotber 17, 2011.
Wednesday, October 5, 2011
Masterskill Education Group sees new substantial shareholder
Written by Joseph Chin of theedgemalaysia.com
Wednesday, 05 October 2011 21:15
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB) reported that Siva Kumar s/o M. Jeyapalan has emerged as a substantial shareholder in the education group.
A filing showed he acquired 41.20 million shares or a 10.05% stake on Wednesday, Oct 5. The share price closed at RM1.09.
His emergence as a substantial shareholder could be linked to an acquisition undertaken by MEGB on March 21 when the MEGB acquired two companies -- Unihealth (M) Sdn Bhd (UMSB) and Unihealth Education Group Sdn Bhd (UEGSB) – for RM3 million cash.
The companies were acquired from Siva Kumar and Ching Koon Kah @ Chin Kon Kah.
UMSB had an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1 each of which RM10.00 had been issued and fully paid-up. The intended principal activity of UMSB was to provide education and management of education; to establish, manage and operate nursing academy; and provision of basic and advance nursing training.
UEGSB had an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1 each of which RM10 had been issued and paid-up. The intended principal activity of UEGSB was the provision of medical, clinical, health care services and nursing home.
MEGB had then said the rationale for the acquisition was in line with the expansion of MEGB group’s future expansion plan and to contribute to a more organised corporate structure of the group.
Wednesday, 05 October 2011 21:15
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB) reported that Siva Kumar s/o M. Jeyapalan has emerged as a substantial shareholder in the education group.
A filing showed he acquired 41.20 million shares or a 10.05% stake on Wednesday, Oct 5. The share price closed at RM1.09.
His emergence as a substantial shareholder could be linked to an acquisition undertaken by MEGB on March 21 when the MEGB acquired two companies -- Unihealth (M) Sdn Bhd (UMSB) and Unihealth Education Group Sdn Bhd (UEGSB) – for RM3 million cash.
The companies were acquired from Siva Kumar and Ching Koon Kah @ Chin Kon Kah.
UMSB had an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1 each of which RM10.00 had been issued and fully paid-up. The intended principal activity of UMSB was to provide education and management of education; to establish, manage and operate nursing academy; and provision of basic and advance nursing training.
UEGSB had an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1 each of which RM10 had been issued and paid-up. The intended principal activity of UEGSB was the provision of medical, clinical, health care services and nursing home.
MEGB had then said the rationale for the acquisition was in line with the expansion of MEGB group’s future expansion plan and to contribute to a more organised corporate structure of the group.
Monday, September 5, 2011
MEGB- surprising drop in revenue
MEGB reported its results for QE30/6/2011 on August 26. Its net profit declined by 49% q-o-q or 48% y-o-y to RM11.6 million while its turnover also dropped by 11.0% q-o-q or 14.7% y-o-y to RM65.8 million. The drop in its net profit was attributed to higher depreciation charges & staff costs due to its on-going expansion. MEGB would require higher revenue in order to recover the increased overhead. Instead, MEGB's revenue declined. This is a very worrying sign. From Note 3 to the account, we can see the decline was attributable to two factors:
1. Lower PTPTN loan for diploma students, from RM60,000 to RM45,000. This caused MEGB to reduce its student fee to RM50,000.Unless, these two factors are revised, I believe MEGB's financial performance would not recover anytime soon. MEGB has always targeted students from the lower income group which are very dependent on PTPTN loans.
2. The intake requirement has been raised from 3 credits to 5 credits in SPM examination.
Table: MEGB's last 9 quarterly results
I have appended below the charts for MEGB's top-line & bottom-line performance for the past 9 quarters as well as the profit margin during the period. We can clearly see that MEGB's profit margin began to slide almost immediately after its listing. In the past 2 quarters, MEGB's revenue has been sliding due to reasons stated above.
Chart 1: MEGB's last 9 quarterly results
Chart 2: MEGB's last 9 quarterly profit margin
Financial Position
As at 30/6/2011. MEGB's financial position is deemed satisfactory with current ratio at 4 times & negligible gearing of 0.1 time. It has cash in hand of RM132 million as well as Receivables, Deposit & Prepayment of RM130 million. It is quite normal to collect some fees or deposit upfront which are either booked in as cash or Receivables, Deposit & Prepayment.
Valuation
MEGB (closed at RM1.21 now) is trading at a PE of 10 times (based on annualized EPS of 12 sen). At this PE multiple, MEGB is deemed fairly valued.
Technical Outlook
MEGB has broken its strong horizontal support at RM1.60, which happened to be its recent low. A new all-time low is a very bearish development and MEGB would have to find some support somewhere & recover from the persistent selling. Could it find this support at the psychological RM1.00 level? Only time will tell.
Chart 3: MEGB's daily chart as at Sept 2, 2011_3.00pm (Source: Quickcharts)
Conclusion
Based on poor technical outlook & financial performance, MEGB is expected to slide further. While the temptation to buy into the stock is alluring due to the sharp decline, the stock could be a value trap as it could get even more attractive as the price continued to slide. I believe a recovery is only possible once the revenue has stabilized & begins to recover. Another stock with a similar problem is Haio.
Friday, September 2, 2011
Masterskill extends losses on poor result, downgrade
Written by Surin Murugiah of theedgemalaysia.com
Friday, 02 September 2011 11:18
KUALA LUMPUR: Masterskill Education Group Bhd extended its losses on Friday, Sept 2 after its disappointing second quarter financial results and weaker outlook.
At 11.15am, Masterskill was down eight sen to RM1.24 with 3.2 million shares done.
Last week, the education group reported that its second quarter earnings, for the period ended June 30, fell 48% to RM11.57 million from RM22.43 million a year ago. It revenue declined 14.7% to RM65.78 million from RM77.11 million.
For the first half, its earnings declined by 30.4% to RM34.16 million from RM49.11 million.
CIMB Equities Research had downgraded the stock from Outperform to Neutral, reducing its target price and also slashing its earnings per share (EPS) forecast.
The research house said Masterskill’s annualised 1H11 core net profit was 43% below its forecast and 40% below consensus because of poor student numbers and a 10.8 percentage points shortfall in EBITDA margin due to surprisingly high operating costs.
“The 44% year-on-year plunge in net student intake was a negative surprise and should be equally weak in 2H. In the medium term, student intake prospects are unexciting and margins will be under pressure,” it said.
CIMB Research also slashed its FY11-FY13 EPS forecasts by 43%-45% and dividends per share (DPS) forecasts by 53%-54%.
The research house also said it had cut the target price from RM3.48 to RM1.71 as it raised its discount to the 14.5 times market P/E from 30% to 40%, which lowered its target CY12 price-to-earnings from 10.2 times to 8.7 times.
“Our rating is downgraded from Outperform to NEUTRAL. The stock’s sole attraction is its dividend yield of 5%-7%,” it said
Friday, 02 September 2011 11:18
KUALA LUMPUR: Masterskill Education Group Bhd extended its losses on Friday, Sept 2 after its disappointing second quarter financial results and weaker outlook.
At 11.15am, Masterskill was down eight sen to RM1.24 with 3.2 million shares done.
Last week, the education group reported that its second quarter earnings, for the period ended June 30, fell 48% to RM11.57 million from RM22.43 million a year ago. It revenue declined 14.7% to RM65.78 million from RM77.11 million.
For the first half, its earnings declined by 30.4% to RM34.16 million from RM49.11 million.
CIMB Equities Research had downgraded the stock from Outperform to Neutral, reducing its target price and also slashing its earnings per share (EPS) forecast.
The research house said Masterskill’s annualised 1H11 core net profit was 43% below its forecast and 40% below consensus because of poor student numbers and a 10.8 percentage points shortfall in EBITDA margin due to surprisingly high operating costs.
“The 44% year-on-year plunge in net student intake was a negative surprise and should be equally weak in 2H. In the medium term, student intake prospects are unexciting and margins will be under pressure,” it said.
CIMB Research also slashed its FY11-FY13 EPS forecasts by 43%-45% and dividends per share (DPS) forecasts by 53%-54%.
The research house also said it had cut the target price from RM3.48 to RM1.71 as it raised its discount to the 14.5 times market P/E from 30% to 40%, which lowered its target CY12 price-to-earnings from 10.2 times to 8.7 times.
“Our rating is downgraded from Outperform to NEUTRAL. The stock’s sole attraction is its dividend yield of 5%-7%,” it said
Tuesday, August 30, 2011
Masterskill down further
Tuesday August 30, 2011
By CHOONG EN HAN
han@thestar.com.my
Higher requirements for nursing course affect student intake
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB) took a beating yesterday, with its share price losing 21 sen or 13.7% to close at RM1.32 after reporting a less than stellar second-quarter results last Friday. The stock has been on continuous downtrend since it listed at RM3.80 in May 2010.
Bursa Malaysia closed after the morning session yesterday owing to the Hari Raya and National Day holidays.
Research houses also downgraded the prospects of Masterskill Education Group Bhd, following its weak second-quarter results, which were attributed to lower student enrolments arising from the higher nursing minimum entry requirements and the change in the timing for public universities' intake.
In a note yesterday, CIMB Research said that it was taken aback by the impact of the higher entry requirements for the nursing diploma on net student intake from Janunary to June 2011.
“Earlier this year, the Malaysian Nursing Board raised the entry requirements from three credits to five credits, which affected student numbers slightly in the first quarter of 2011,” it said, adding that second -quarter student numbers were expected to recover but the student intake trend was weaker during MEGB's enrolment drive in the past three to four months.
It said that in the medium term, student intake prospects were unexciting and margins would be under pressure.
The National Higher Education Fund Corp's recent loan scheme revision was viewed as negative given that Masterskill's average diploma course fee is RM52,000, and the new policy is enforced industry-wide and is expected to be more detrimental to small colleges that are highly dependent on nursing diploma students.
For the health sciences segment, loan allocation per student for all health science-related diploma courses is reduced from RM60,000 to RM45,000 and applies to all new and existing courses for all campuses and college locations.
“Student growth for the next two to three years does not look as exciting as before. We previously assumed a 10%-13% annual student population growth for financial year 2011 to 2013. This no longer looks achievable. We are now looking at growth of 8%-7% annually,” it said.
CIMB Research downgraded the group to “neutral” with a target price of RM1.71 from RM3.48 previously, saying that changes in industry-wide policies since Masterskill's listing have buffeted the market leader.
It said prospects for strong growth of student numbers for its existing campuses were unexciting although it still held a long-term positive view on the group's expansion into non-healthcare courses, new university campus and move into degree and medical degree courses.
To be noted is the fact that CIMB Investment Bank Bhd was the principal adviser, retail underwriter as well as the joint global co-ordinator and joint bookrunners together with Goldman Sachs for the group's initial public offering.
Meanwhile, HwangDBS Vickers Research lowered its new student intake assumptions to 4,000 from 6,500 in 2011, 5,100 from 7,300 in 2012 and 5,700 from 8,100 in 2013, with its year-to-date enrolment rate suggesting MEGB could struggle to meet its expectations which were already lowered amid tough business environment.
The research house had also downgraded the stock to “fully valued” from “buy” previously with a lower target price of RM1.20 versus RM2.50 previously.
News had also resurfaced that private equity firm Crescent Point Investment Holdings Ltd, founded by former Morgan Stanley bankers, may sell its 21.5% stake in MEGB.
In 2009, it was speculated that the firm was looking to divest its 65% stake then in South-East Asia's largest nursing and healthcare college operator for a reported value of between US$200mil and US$250mil. However, the report was refuted by the Singapore-based firm's partner and managing director Richard Scanlon then.
By CHOONG EN HAN
han@thestar.com.my
Higher requirements for nursing course affect student intake
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB) took a beating yesterday, with its share price losing 21 sen or 13.7% to close at RM1.32 after reporting a less than stellar second-quarter results last Friday. The stock has been on continuous downtrend since it listed at RM3.80 in May 2010.
Bursa Malaysia closed after the morning session yesterday owing to the Hari Raya and National Day holidays.
Research houses also downgraded the prospects of Masterskill Education Group Bhd, following its weak second-quarter results, which were attributed to lower student enrolments arising from the higher nursing minimum entry requirements and the change in the timing for public universities' intake.
In a note yesterday, CIMB Research said that it was taken aback by the impact of the higher entry requirements for the nursing diploma on net student intake from Janunary to June 2011.
“Earlier this year, the Malaysian Nursing Board raised the entry requirements from three credits to five credits, which affected student numbers slightly in the first quarter of 2011,” it said, adding that second -quarter student numbers were expected to recover but the student intake trend was weaker during MEGB's enrolment drive in the past three to four months.
It said that in the medium term, student intake prospects were unexciting and margins would be under pressure.
The National Higher Education Fund Corp's recent loan scheme revision was viewed as negative given that Masterskill's average diploma course fee is RM52,000, and the new policy is enforced industry-wide and is expected to be more detrimental to small colleges that are highly dependent on nursing diploma students.
For the health sciences segment, loan allocation per student for all health science-related diploma courses is reduced from RM60,000 to RM45,000 and applies to all new and existing courses for all campuses and college locations.
“Student growth for the next two to three years does not look as exciting as before. We previously assumed a 10%-13% annual student population growth for financial year 2011 to 2013. This no longer looks achievable. We are now looking at growth of 8%-7% annually,” it said.
CIMB Research downgraded the group to “neutral” with a target price of RM1.71 from RM3.48 previously, saying that changes in industry-wide policies since Masterskill's listing have buffeted the market leader.
It said prospects for strong growth of student numbers for its existing campuses were unexciting although it still held a long-term positive view on the group's expansion into non-healthcare courses, new university campus and move into degree and medical degree courses.
To be noted is the fact that CIMB Investment Bank Bhd was the principal adviser, retail underwriter as well as the joint global co-ordinator and joint bookrunners together with Goldman Sachs for the group's initial public offering.
Meanwhile, HwangDBS Vickers Research lowered its new student intake assumptions to 4,000 from 6,500 in 2011, 5,100 from 7,300 in 2012 and 5,700 from 8,100 in 2013, with its year-to-date enrolment rate suggesting MEGB could struggle to meet its expectations which were already lowered amid tough business environment.
The research house had also downgraded the stock to “fully valued” from “buy” previously with a lower target price of RM1.20 versus RM2.50 previously.
News had also resurfaced that private equity firm Crescent Point Investment Holdings Ltd, founded by former Morgan Stanley bankers, may sell its 21.5% stake in MEGB.
In 2009, it was speculated that the firm was looking to divest its 65% stake then in South-East Asia's largest nursing and healthcare college operator for a reported value of between US$200mil and US$250mil. However, the report was refuted by the Singapore-based firm's partner and managing director Richard Scanlon then.
Thursday, August 11, 2011
CIMB Research has Sell on Masterskill
Written by theedgemalaysia.com
Wednesday, 10 August 2011 08:45
KUALA LUMPUR: CIMB Equities Research has a technical Sell on Masterskill Education Group Bhd (MEGB) at RM1.69 at which is its trading at a FY12 price-to-earnings of 5.0 times and price-to-book value of 1.3 times.
It said on Wednesday, Aug 10 that trading has been lethargic since prices violated its triangle support. With the candles still trading below all its key moving averages, it doubted any rebound would be sustainable.
“Hence, our strategy here is to unload on strength, preferably near the RM1.80-RM1.82 resistances,” it said.
CIMB Research said the indicators were still showing signs of consolidation. MACD has slipped into the negative territory while RSI is oversold.
“Unless prices swing back above its 30-day SMA now at RM1.93, we think the bears have the upper hand here. On the downside, support is seen at RM1.59 and RM1.45,” it said.
Wednesday, 10 August 2011 08:45
KUALA LUMPUR: CIMB Equities Research has a technical Sell on Masterskill Education Group Bhd (MEGB) at RM1.69 at which is its trading at a FY12 price-to-earnings of 5.0 times and price-to-book value of 1.3 times.
It said on Wednesday, Aug 10 that trading has been lethargic since prices violated its triangle support. With the candles still trading below all its key moving averages, it doubted any rebound would be sustainable.
“Hence, our strategy here is to unload on strength, preferably near the RM1.80-RM1.82 resistances,” it said.
CIMB Research said the indicators were still showing signs of consolidation. MACD has slipped into the negative territory while RSI is oversold.
“Unless prices swing back above its 30-day SMA now at RM1.93, we think the bears have the upper hand here. On the downside, support is seen at RM1.59 and RM1.45,” it said.
Friday, August 5, 2011
HwangDBS maintains 'buy' call on Masterskill
Friday, August 05, 2011, 04.35 PM
HwangDBS Vickers has maintained a "buy" call recommendation on Masterskill Education Group with a lower target price of RM2.50 from RM3.25 previously due to earnings pressure and a lower student intake.
The research house said factors such as tighter financing loan from the
National Higher Education Fund Corporation and higher nursing entry requirements had somewhat affected the number of students enrolling in the diploma programmes.
Industry statistics showed that the total intake of diploma-level students
in the health, health sciences and welfare field by private higher education
institutions last year, declined to 30,000 against 38,000 in 2009.
In comparison, the number of new students registered by MASEG was 5,500 last year versus 6,600 in 2009.
HwangDBS said to encounter the challenging environment, Masterskill, which
has more than 95 per cent of its students currently enrolled in diploma
programmes, will take several initiatives to broaden the group's earnings.
"Masterskill is expected to step up its student recruitment drives, offer
more degree programmes, branch out to provide non-healthcare related courses, collaborate with established foreign institutions and venture overseas to diversify its income streams," added HwangDBS. -- Bernama
HwangDBS Vickers has maintained a "buy" call recommendation on Masterskill Education Group with a lower target price of RM2.50 from RM3.25 previously due to earnings pressure and a lower student intake.
The research house said factors such as tighter financing loan from the
National Higher Education Fund Corporation and higher nursing entry requirements had somewhat affected the number of students enrolling in the diploma programmes.
Industry statistics showed that the total intake of diploma-level students
in the health, health sciences and welfare field by private higher education
institutions last year, declined to 30,000 against 38,000 in 2009.
| |
In comparison, the number of new students registered by MASEG was 5,500 last year versus 6,600 in 2009.
HwangDBS said to encounter the challenging environment, Masterskill, which
has more than 95 per cent of its students currently enrolled in diploma
programmes, will take several initiatives to broaden the group's earnings.
"Masterskill is expected to step up its student recruitment drives, offer
more degree programmes, branch out to provide non-healthcare related courses, collaborate with established foreign institutions and venture overseas to diversify its income streams," added HwangDBS. -- Bernama
| |
Thursday, June 2, 2011
Masterskill leverages on new campuses
Written by Kamarul Azhar Thursday, 02 June 2011 12:27
KUALA LUMPUR: Masterskill Education Group Bhd will not be affected by any change in funding requirements of the National Higher Education Fund Corp (PTPTN) as it will only apply to new programmes offered by private universities, according to Datuk Seri Edmund Santhara, CEO of Masterskill.
Speaking after Masterskill’s AGM, Santhara said 95% of its existing students who rely on PTPTN loans to fund their studies would not be affected by the new requirements, and Masterskill’s 18,399 students represent a small percentage of the total number of students receiving PTPTN loans.
“We have actually addressed the mechanism of funding and cost, whereas a lot of others in the industry have not started to touch on it,” he said, adding that based on the enrolment in its Kuching campus, which recorded 800 new students in its first year, the group’s brand among higher education providers is strong and Masterskill would continue to attract new students.
Masterskill posted a slightly lower revenue in 1QFY11 ended March 31 of RM73.7 million, compared with RM77 million a year earlier. Net profit decreased by 15.3% year-on-year to RM22.6 million in the quarter.
The group attributed the decrease to the fact that it did only one enrolment during 1Q compared with two in 1QFY10, as the second intake of the year was deferred to 2Q due to the late announcement of the Sijil Pelajaran Malaysia (SPM) results.
“Notwithstanding the delay of our second intake, Masterskill still managed to record RM73.7 million in revenue. With our strong financial foundation and growth strategies in place, we are very much on track to achieve our targeted results in 2011,” Santhara said.
He anticipates a lot of macro challenges affecting the education industry in 2011, such as the delay in public university intakes from July to September, which he described as “unique”in Malaysia as it does not happen anywhere else in the world.
“The public universities need longer term and longer time to recruit students. As a result, prospective students would have to wait until September to decide whether to enrol in a public or private university. That’s a 3½-month shift from the previous practice whereby students can make their decisions in July,” he said.
Nevertheless, he said the group would continue with its three-pronged strategy for growth in student population, course and curriculum offerings and campus expansion which is expected to contribute positively towards its bottom line in 2011.
Masterskill will turn its Cheras campus into a full-fledged university of allied health sciences in the near future. The group is currently expanding its number of branch campuses in other parts of Malaysia, such as in Kuching and Johor Bahru, and will build a new city campus in Petaling Jaya in its bid to increase its student intake.
It will also build a flagship campus in Bandar Baru Bangi, which is expected to commence construction in the coming months, with a total investment of RM33 million and scheduled for completion by 2013. Once completed, the campus will be able to house 15,000 students.
On the venture into Indonesia’s higher education sector, Santhara said although the hospitality and healthcare industry there has top- notch facilities, it is lacking in support services staff compared with Malaysia. He said this would provide ample opportunities for Masterskill to offer nursing and allied health sciences courses in the republic.
“Even though [there are] five-star hospitals, their support services are 30 years behind Malaysia.” he added.
Other than Indonesia, the group plans to expand into the Indian sub-continent in Pakistan and Bangladesh.
However, it would only do so via a franchising model, where the group would provide its local partner with the software and content, as it is not worth setting up facilities there given the high political risks, he said.
Masterskill ended two sen higher at RM1.89 yesterday on a volume of 1.22 million shares.
This article appeared in The Edge Financial Daily, June 2, 2011.
KUALA LUMPUR: Masterskill Education Group Bhd will not be affected by any change in funding requirements of the National Higher Education Fund Corp (PTPTN) as it will only apply to new programmes offered by private universities, according to Datuk Seri Edmund Santhara, CEO of Masterskill.
Speaking after Masterskill’s AGM, Santhara said 95% of its existing students who rely on PTPTN loans to fund their studies would not be affected by the new requirements, and Masterskill’s 18,399 students represent a small percentage of the total number of students receiving PTPTN loans.
“We have actually addressed the mechanism of funding and cost, whereas a lot of others in the industry have not started to touch on it,” he said, adding that based on the enrolment in its Kuching campus, which recorded 800 new students in its first year, the group’s brand among higher education providers is strong and Masterskill would continue to attract new students.
Masterskill posted a slightly lower revenue in 1QFY11 ended March 31 of RM73.7 million, compared with RM77 million a year earlier. Net profit decreased by 15.3% year-on-year to RM22.6 million in the quarter.
The group attributed the decrease to the fact that it did only one enrolment during 1Q compared with two in 1QFY10, as the second intake of the year was deferred to 2Q due to the late announcement of the Sijil Pelajaran Malaysia (SPM) results.
“Notwithstanding the delay of our second intake, Masterskill still managed to record RM73.7 million in revenue. With our strong financial foundation and growth strategies in place, we are very much on track to achieve our targeted results in 2011,” Santhara said.
 |
| Santhara (left) and Masterskill chairman Tunku Datuk Seri Kamel Tunku Rijaludin at the post-AGM press conference. |
“The public universities need longer term and longer time to recruit students. As a result, prospective students would have to wait until September to decide whether to enrol in a public or private university. That’s a 3½-month shift from the previous practice whereby students can make their decisions in July,” he said.
Nevertheless, he said the group would continue with its three-pronged strategy for growth in student population, course and curriculum offerings and campus expansion which is expected to contribute positively towards its bottom line in 2011.
Masterskill will turn its Cheras campus into a full-fledged university of allied health sciences in the near future. The group is currently expanding its number of branch campuses in other parts of Malaysia, such as in Kuching and Johor Bahru, and will build a new city campus in Petaling Jaya in its bid to increase its student intake.
It will also build a flagship campus in Bandar Baru Bangi, which is expected to commence construction in the coming months, with a total investment of RM33 million and scheduled for completion by 2013. Once completed, the campus will be able to house 15,000 students.
On the venture into Indonesia’s higher education sector, Santhara said although the hospitality and healthcare industry there has top- notch facilities, it is lacking in support services staff compared with Malaysia. He said this would provide ample opportunities for Masterskill to offer nursing and allied health sciences courses in the republic.
“Even though [there are] five-star hospitals, their support services are 30 years behind Malaysia.” he added.
Other than Indonesia, the group plans to expand into the Indian sub-continent in Pakistan and Bangladesh.
However, it would only do so via a franchising model, where the group would provide its local partner with the software and content, as it is not worth setting up facilities there given the high political risks, he said.
Masterskill ended two sen higher at RM1.89 yesterday on a volume of 1.22 million shares.
This article appeared in The Edge Financial Daily, June 2, 2011.
Wednesday, June 1, 2011
Masterskill confident of satisfactory year
| |
Group chief executive officer Datuk Edmund Santhara said despite the constantly changing operating environment, the group has drawn up a three-pronged strategy of increa-sing student population, broadening courses and curriculum offerings as well as embarking on a campus expansion. He was speaking to reporters after the company's annual general mee-ting here yesterday.
Masterskill has the largest market share of all private higher education institutions offering nursing courses in Malaysia.
Edmund said that Masterskill is among others, looking to expand its curriculum beyond allied health.
| |
He said Masterskill plans to strengthen its presence via its flagship campus in Bandar Baru Bangi. The campus, to be built on a 21.91 hectare site, can accommodate up to 15,000 students when comp-leted by 2013 at a total investment of RM33 million.
Currently, Masterskill has six campuses - in Selangor, Johor, Perak, Kelantan, Sabah and Sarawak.
"In addition, we have also in the pipeline, plans to expand our business to India and Indonesia as both countries ensure a lot opportunities in terms of the population.
He said other than physical expansion, Masterskill will expand its business via franchising model and is looking to countries like Pakistan and Bangladesh.
Asked about a strategic partner for the business, he said there have been talks with several parties, both locally and from overseas. - Bernama
| |
Tuesday, May 24, 2011
Lower enrolment hurts Masterskill net profit
Wednesday May 25, 2011
PETALING JAYA: Nursing school operator Masterskill Education Group Bhd posted a 15.3% fall in net profit to RM22.58mil for the quarter ended March 31 compared with the same quarter a year ago due to lower enrolment of students and higher operating overheads.The company’s revenue was down 12.6% to RM73.68mil after the number of student intakes for the quarter under review was cut to one from two compared with the corresponding quarter.
Masterskill said in an announcement to the stock exchange yesterday that the second intake of the year was deferred to the second quarter due to the late announcement of SPM results.
It added that the higher overheads were mainly due to an increase in depreciation because of the company’s expansion, which was accompanied by an increase in staff costs to support growth and expansion.
Earlier last month Masterskill entered into a subscription agreement with the controlling shareholder of soon-to-be-listed PT Sejahteraraya Anugrahjaya Tbk, the owner of Mayapada Hospital, to acquire a 1.31% stake in the latter.
Besides the stake, the company together with its chief executive officer Datuk Seri Edmund Santhara also entered into an agreement to form Universitas Masterskill-Mayapada.
Masterskill also announced late last month that it had entered into an agreement with Australia’s Newcastle University to offer business programmes.
Masterskill closed five sen lower at RM2.12 yesterday. Since its listing in May last year, the counter has fallen 44.21%.
| CIMB Research keeps Buy on Masterskill, TP RM4.48 |  |  |
| Written by theedgemalaysia.com |
| Wednesday, 25 May 2011 08:36 |
| KUALA LUMPUR: CIMB Equities Research is keeping its Buy call on Masterskill Education Group Bhd and RM4.48 target price. It said on Wednesday, May 25 that although Masterskill’s annualised 1Q11 core net profit made up 76% of its full-year forecast and 77% of consensus, the results were largely in line as subsequent quarters should be stronger. “We were not surprised by the weaker showing at both the top and bottom lines as it arises from timing issues in student intake following the delayed announcement of school-leavers’ results. Although EBITDA margin shrank YoY, it was a respectable 41.2%, which is not too far from our full-year forecast of 43%. “We make no changes to our forecasts, BUY call and RM4.48 target price, still pegged to 13.1x CY12 P/E or a 10% discount to our target market P/E of 14.5x. Potential re-rating catalysts include (i) a continued recovery in investor sentiment, and (ii) preference for defensive plays, backed by Masterskill’s 8.2% dividend yield,” it said. |
Tuesday, May 17, 2011
Masterskill riding on the healthcare wave
Price Target date: 12/05/2011 | Source: RHB
| MEGB: | 5166 | Price Target | : | 3.74 | | | Price Call | : | BUY | ||
| Last Price | : | 2.23 | | | Upside/Downside | : |  +1.51 (67.71%) |
Masterskill Education Group Bhd
(May 12, RM2.22)
Initiating coverage with outperform call at RM2.27 with fair value of RM3.74: Masterskill has built its reputation in the provision of nursing and allied health education in Malaysia. It currently has 18,399 students enrolled in its diploma and degree programmes, expanding at a compound annual growth rate (CAGR) of 28.3% from 2004 to 2010.
Masterskill's growth in the next few years will be propelled by: (i) An increasing demand for nurses. The government is targeting a ratio of one registered nurse to 200 population by 2020 from the current ratio of 1:500. In 2008 (latest data available), there were 54,000 registered nurses, implying a deficit of 81,000 nurses (based on 27 million population).
With teaching facilities producing about 6,000 to 7,000 nurses per year, the shortage will mean that the demand for Masterskill's nursing courses will remain high for the foreseeable future;
(ii) New courses in the pipeline. Masterskill plans to introduce new programmes in the allied health and medical education disciplines. The group has lined up seven new programmes to be introduced in 2011, yielding high margins that will help to drive its margins moving forward; and
(iii) An increase in student enrolment. Masterskill has received approval to offer a Bachelor of Medicine and Surgery programme with a quota of 100 students at its Johor campus. In addition, it will be building a flagship campus (capacity of 20,000 students) in Bandar Baru Bangi. Phase 1 of the new campus is targeted for completion in 4QFY12 while Phase 2 is due to be ready in FY13.
Risks include: (i) changes in the requirements set by governing bodies; (ii) a change in policy by the government; and (iii) high foreign shareholding (approximately 56%).
We project FY10/13 revenue CAGR of 13.4%, driven primarily by the increase in student enrolment as well as a gradual increase in fees. Our FY10/13 net profit CAGR, however, is expected to grow 14.7% as a result of improved operating leverage on the back of facility integration and economies of scale.
We believe Masterskill's price-earnings ratios are attractive, trading at 7.6 times FY11, compared with peers HELP International Corp Bhd and SEG International Bhd, that trade at FY11 PERs of 15.6 times and 14.3 times. This is unjustified given its relatively larger market cap size and'' higher margins.
Concerns over the availability of National Higher Education Fund (PTPTN) loans are also overplayed in our opinion. Our fair value for the stock is RM3.74, based on target FY11 PER of 12.5 times, 15% discount to the sector average FY11 PER of 15 times. We initiate coverage with an 'outperform' call on the stock. ' RHB Research, May 12
This article appeared in The Edge Financial Daily, May 13, 2011.
Wednesday, April 27, 2011
Masterskill to venture into business programmes with Newcastle
Written by Joseph Chin of theedgemalaysia.com
Wednesday, 27 April 2011 19:10
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB) is venturing into the provision of undergraduate business programmes in a tie-up with The University of Newcastle.
MEGB said on Wednesday, April 27 the proposal covered the bachelor of business and bachelor of commerce programmes.
It said under the arrangement, students who had successfully completed Part One of the programme at Masterskill, Newcastle will give one year (80 units) advanced standing into Part Two of the programmes.
“This agreement is in line with Masterskill’s planning for its diversification into other fields of education,” said the company.
MEGB is principally involved in the provision of education in nursing and allied health sciences in the healthcare industry.
MEGB said it would market the programmes in Indonesia and Malaysia and be responsible for advertising. It would also be responsible for all local programme administration and organise student enrolments.
Wednesday, 27 April 2011 19:10
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB) is venturing into the provision of undergraduate business programmes in a tie-up with The University of Newcastle.
MEGB said on Wednesday, April 27 the proposal covered the bachelor of business and bachelor of commerce programmes.
It said under the arrangement, students who had successfully completed Part One of the programme at Masterskill, Newcastle will give one year (80 units) advanced standing into Part Two of the programmes.
“This agreement is in line with Masterskill’s planning for its diversification into other fields of education,” said the company.
MEGB is principally involved in the provision of education in nursing and allied health sciences in the healthcare industry.
MEGB said it would market the programmes in Indonesia and Malaysia and be responsible for advertising. It would also be responsible for all local programme administration and organise student enrolments.
Thursday, April 14, 2011
Masterskill’s strategic move into Indonesia
Written by Financial Daily
Thursday, 14 April 2011 11:48
Masterskill Education Group Bhd CEO Datuk Seri Edmund Santhara is an avid chess player. And like a game of chess, yesterday’s announcement of Masterskill’s venture into Indonesia is the latest in a series of strategic moves after two earlier major “checkmates” — the threat of lower PTPTN (National Higher Education Fund Corp) funding and persistent selling of its shares by foreign portfolio funds.
Of the two checkmates, analysts believe concerns over the large PTPTN deficit are overblown. Masterskill is appealing against PTPTN’s new ruling that caps loans at RM45,000 for new courses. Analysts believe that the new loan ruling, if implemented, would still cover more than 75% of a typical tertiary course.
Analysts also note that the government was unlikely to stop funding the programme, which was an important initiative to help students finance their higher education. Rather, they note that the fund will tighten the debt collection process.
The other setback was the persistent selling of Masterskill’s shares by two US-based portfolio funds — Smallcap World Fund Inc and Fidelity Management and Research LLC. On a positive note, the selling appears to have ended, given the large amount of shares traded since they ceased to be substantial shareholders in mid-February this year.
Indeed, Masterskill’s stock has rebounded by 36.5% to RM2.28 yesterday, from its mid-March low of RM1.67. Apart from the likely end of foreign selling, there was also positive news flow, including results for 2010 that met analysts’ expectations, generous dividends and the latest Indonesian venture.
The company’s full-year net profit for 2010 rose to RM102.1 million from RM97.4 million, after which it declared a final single-tier dividend of 7.9 sen.
Total single-tier dividends of 14.9 sen for 2010 gave the stock a high net dividend yield of 6.5%.
The latest positive move involves its venture into Indonesia, confirming The Edge Financial Daily’s earlier report on April 7, 2011.
Yesterday, Masterskill announced that it has entered into an MoU with PT Sejahteraraya Anugrahjaya Tbk (PTSA) to develop academic exchange and cooperation in the teaching and training of Masterskill students at the Mayapada Hospital owned by PTSA.
More significantly, the MoU involves forming a joint venture to establish Universitas Masterskill-Mayapada in Indonesia. It added that the university will offer programmes in nursing and allied health education, similar to those offered by Masterskill in Malaysia. This follows an earlier subscription by Masterskill in PTSA’s IPO.
The move into Indonesia will boost Masterskill’s geographical base, which is critical as the company has a relatively narrow, specialised product base.
Indeed, analysts say one major disadvantage that Masterskill has compared with other education peers such as HELP International Corp Bhd and SEG International Bhd is its narrow focus on nursing and healthcare-related courses. The other two listed colleges offer a wider choice of courses, catering for a broader spectrum of society.
An analyst notes that there will come a time when the Malaysian market, with its small population of about 28 million, will become saturated with nurses and healthcare personnel. Masterskill will have to either expand its product offering or market reach.
Given that its niche and branding is largely in healthcare and nursing education, going into new markets will be a better near-term strategy, analysts say, although it can expand into other healthcare-related courses.
Indonesia, with its 230 million population, annual GDP growth of over 5% and a rising middle class, serves as a good diversification platform for Masterskill.
Indeed, Malaysia’s small size does have limitations. Even HELP, which is already diversifying its courses and market reach locally, is expanding abroad — to Indonesia, Vietnam, China and elsewhere — mostly through twinning affiliations with small local colleges. Masterskill’s setting up of a full-fledged university is on a far more ambitious scale, and is a calculated strategic move by Santhara.
Many Malaysian companies have made it big in Indonesia, especially those in the banking and finance, plantations and telecommunications sectors. Only time will tell if Masterskill will be the next success story there.
Thursday, 14 April 2011 11:48
Masterskill Education Group Bhd CEO Datuk Seri Edmund Santhara is an avid chess player. And like a game of chess, yesterday’s announcement of Masterskill’s venture into Indonesia is the latest in a series of strategic moves after two earlier major “checkmates” — the threat of lower PTPTN (National Higher Education Fund Corp) funding and persistent selling of its shares by foreign portfolio funds.
Of the two checkmates, analysts believe concerns over the large PTPTN deficit are overblown. Masterskill is appealing against PTPTN’s new ruling that caps loans at RM45,000 for new courses. Analysts believe that the new loan ruling, if implemented, would still cover more than 75% of a typical tertiary course.
Analysts also note that the government was unlikely to stop funding the programme, which was an important initiative to help students finance their higher education. Rather, they note that the fund will tighten the debt collection process.
The other setback was the persistent selling of Masterskill’s shares by two US-based portfolio funds — Smallcap World Fund Inc and Fidelity Management and Research LLC. On a positive note, the selling appears to have ended, given the large amount of shares traded since they ceased to be substantial shareholders in mid-February this year.
Indeed, Masterskill’s stock has rebounded by 36.5% to RM2.28 yesterday, from its mid-March low of RM1.67. Apart from the likely end of foreign selling, there was also positive news flow, including results for 2010 that met analysts’ expectations, generous dividends and the latest Indonesian venture.
The company’s full-year net profit for 2010 rose to RM102.1 million from RM97.4 million, after which it declared a final single-tier dividend of 7.9 sen.
Total single-tier dividends of 14.9 sen for 2010 gave the stock a high net dividend yield of 6.5%.
The latest positive move involves its venture into Indonesia, confirming The Edge Financial Daily’s earlier report on April 7, 2011.
Yesterday, Masterskill announced that it has entered into an MoU with PT Sejahteraraya Anugrahjaya Tbk (PTSA) to develop academic exchange and cooperation in the teaching and training of Masterskill students at the Mayapada Hospital owned by PTSA.
More significantly, the MoU involves forming a joint venture to establish Universitas Masterskill-Mayapada in Indonesia. It added that the university will offer programmes in nursing and allied health education, similar to those offered by Masterskill in Malaysia. This follows an earlier subscription by Masterskill in PTSA’s IPO.
The move into Indonesia will boost Masterskill’s geographical base, which is critical as the company has a relatively narrow, specialised product base.
Indeed, analysts say one major disadvantage that Masterskill has compared with other education peers such as HELP International Corp Bhd and SEG International Bhd is its narrow focus on nursing and healthcare-related courses. The other two listed colleges offer a wider choice of courses, catering for a broader spectrum of society.
An analyst notes that there will come a time when the Malaysian market, with its small population of about 28 million, will become saturated with nurses and healthcare personnel. Masterskill will have to either expand its product offering or market reach.
Given that its niche and branding is largely in healthcare and nursing education, going into new markets will be a better near-term strategy, analysts say, although it can expand into other healthcare-related courses.
Indonesia, with its 230 million population, annual GDP growth of over 5% and a rising middle class, serves as a good diversification platform for Masterskill.
Indeed, Malaysia’s small size does have limitations. Even HELP, which is already diversifying its courses and market reach locally, is expanding abroad — to Indonesia, Vietnam, China and elsewhere — mostly through twinning affiliations with small local colleges. Masterskill’s setting up of a full-fledged university is on a far more ambitious scale, and is a calculated strategic move by Santhara.
Many Malaysian companies have made it big in Indonesia, especially those in the banking and finance, plantations and telecommunications sectors. Only time will tell if Masterskill will be the next success story there.
Wednesday, April 13, 2011
Masterskill, CEO to invest US$3m each in Indonesia JV
Written by Joseph Chin of theedgemalaysia.com
Wednesday, 13 April 2011 14:02
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB), its group CEO and PT Sejahteraraya Anugrahjaya Tbk (PTSA) are teaming up to look into the setting up of a university in Indonesia.
MEGB said on Wednesday, April 13 its unit Masterskill (M) Sdn Bhd had signed an MoU with PTSA and MEGB group CEO Datuk Seri Santhara Kumar A/L Ramanaidu to work together to teach and train MEGB’s students at the Mayapada Hospital. The next step is to form a joint venture company in Indonesia to set up Universitas Masterskill – Mayapada in Indonesia.
“The parties proposed to form a JV company in Indonesia with proposed paid-up capital of US$10 million wherein MEGB and Santhara will each hold a 30% stake and the remaining 40% by PTSA," it said. MEGB and Santhara would each invest US$3 million and PTSA US$4 million in the JV.
PTSA is listed on the Stock Exchange of Indonesia and is the owner of Mayapada Hospital in Indonesia.
Under the MoU, PTSA shall be responsible to obtain all approvals and consents for the establishment and operation of Universitas Masterskill–Mayapada.
The university will offer programmes in nursing and allied health education similar to the programmes offered by Masterskill University College of Health Sciences and Masterskill College of Nursing and Health.
MEGB said Masterskill would provide the standard operating procedures, curriculum and guidelines relating to the programmes in nursing and allied health education to be offered by Universitas Masterskill–Mayapada.
The parties would be responsible in renovation works to the buildings of Universitas Masterskill–
Mayapada.
They would also be jointly responsible and take reasonable steps in the recruitment of students to study in Universitas Masterskill–Mayapada.
Wednesday, 13 April 2011 14:02
KUALA LUMPUR: Masterskill Education Group Bhd (MEGB), its group CEO and PT Sejahteraraya Anugrahjaya Tbk (PTSA) are teaming up to look into the setting up of a university in Indonesia.
MEGB said on Wednesday, April 13 its unit Masterskill (M) Sdn Bhd had signed an MoU with PTSA and MEGB group CEO Datuk Seri Santhara Kumar A/L Ramanaidu to work together to teach and train MEGB’s students at the Mayapada Hospital. The next step is to form a joint venture company in Indonesia to set up Universitas Masterskill – Mayapada in Indonesia.
“The parties proposed to form a JV company in Indonesia with proposed paid-up capital of US$10 million wherein MEGB and Santhara will each hold a 30% stake and the remaining 40% by PTSA," it said. MEGB and Santhara would each invest US$3 million and PTSA US$4 million in the JV.
PTSA is listed on the Stock Exchange of Indonesia and is the owner of Mayapada Hospital in Indonesia.
Under the MoU, PTSA shall be responsible to obtain all approvals and consents for the establishment and operation of Universitas Masterskill–Mayapada.
The university will offer programmes in nursing and allied health education similar to the programmes offered by Masterskill University College of Health Sciences and Masterskill College of Nursing and Health.
MEGB said Masterskill would provide the standard operating procedures, curriculum and guidelines relating to the programmes in nursing and allied health education to be offered by Universitas Masterskill–Mayapada.
The parties would be responsible in renovation works to the buildings of Universitas Masterskill–
Mayapada.
They would also be jointly responsible and take reasonable steps in the recruitment of students to study in Universitas Masterskill–Mayapada.
Monday, April 4, 2011
Is foreign selling in Masterskill finally over?
Written by Yantoultra Ngui Yichen
Monday, 04 April 2011 11:54
Could selling by foreign shareholders in Masterskill Education Group Bhd — the biggest catalyst for its depressed share price — be finally coming to an end? According to analysts, that is a strong possibility, judging by the high volume traded in the last six weeks, and especially late last week, plus the fact that Masterskill’s share price has since rebounded strongly.
Since hitting an all-time low of RM1.67 on March 15, the stock has rallied 28.7% to hit RM2.15 last Friday.
Despite the recent rebound, the stock is trading at just half of its all-time high of RM4.30 and 43% below its IPO price of RM3.80.
It was the sixth most actively traded stock last Friday, gaining 23 sen or 12% to RM2.15 on heavy volume of 30.58 million shares.
If the foreign selling overhang is over, analysts expect Masterskill’s share price to better reflect its fundamentals.
After the debut in May last year, shares of the nursing and allied health sciences educator surged to a high of RM4.30 two months later compared with its IPO price of RM3.80, before it spiralled downwards.
Heavy foreign selling by two US-based portfolio funds — Smallcap World Fund Inc and Fidelity Management and Research LLC — was the key reason behind the collapse in its share price, even as the company delivered strong earnings that were within expectations.
Concerns on the ballooning deficit at Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN), the National Higher Education Fund Corp, as a result of a rising number of default payments were said to have accelerated the selling in Masterskill.
Over 90% of Masterskill’s students are financed by PTPTN loans.
The two portfolio funds ceased to be substantial shareholders of Masterskill in mid-February. This means that their respective stakes fell below the 5% threshold and they do not need to disclose further sales.
From the volume traded since then and assuming the two funds are the largest sellers of Masterskill shares at depressed prices, it would appear that the bulk or possibly all of their remaining shares may have already been disposed of.
When contacted, Masterskill officials declined to comment on its foreign shareholding.
Smallcap ceased to be a substantial shareholder after disposing of 230,200 shares or a 0.56% stake in the firm on Feb 16, paring its total shareholding to 20.48 million shares or a 4.99% stake.
On the other hand, Fidelity ceased to be a substantial shareholder after it sold 167,400 shares or a 0.41% stake on Feb 10, reducing its interest to 20.43 million shares or a 4.98% stake. Collectively, both funds had 40.91 million shares left in mid-February this year.
Between Feb 17 and April 1, the counter saw a total of 109.57 million shares changing hands, with 30.58 million shares traded last Friday alone, according to calculations by The Edge Financial Daily. This was nearly three times the total amount of shares held by the two funds.
Incidentally, between Feb 17 and March 15, when the stock hit an all-time low of RM1.67, a total of 43.76 million shares were transacted over 19 trading days, according to estimates by the daily.
This was slightly more than the shares held by the two US funds, suggesting that selling pressure might have climaxed then when the stock reached its nadir before rebounding.
Given the sharp fall in the share price, analysts see value in Masterskill. Seven out of eight analysts have “buy” recommendations on the stock.
The consensus target price on the stock is RM4.60, according to Bloomberg data. This is more than double last Friday’s closing price of RM2.15.
Maintaining a “trading buy” recommendation on Masterskills, OSK Research, for instance, said the stock is currently trading at an alluring price-to-earnings ratio (PER) for FY11 while offering a dividend yield of more than 7%. It has forecast earnings per share of 28.7 sen for FY11, implying a forward PER of 7.5 times. Its target price for the stock is RM3.44 based on 12 times PER for FY11.
Masterskill declared a final single-tier dividend of 7.9 sen a share last Wednesday, translating into total single-tier dividends of 14.9 sen for FY10.
Based on last Friday’s closing price, the counter fetches a high net dividend yield of 6.9%.
Masterskill’s net profit for FY10 rose almost 5% to RM102.14 million from RM97.38 million a year ago on the back of a 15.49% increase in revenue to RM315.74 million from RM273.39 million.
With earnings per share of 24.9 sen, the stock is trading at a historical PER of just 8.6 times.
Its cash flow from operating activities increased to RM109.5 million in FY10 from RM101.1 million a year ago.
In addition, the net cash position had also improved to RM99.41 million as at Dec 31, 2010 from RM30.23 million a year ago, allowing the company to capitalise on expansion at an opportune time.
On the concern about PTPTN funding, OSK Research said it was optimistic that the impact should be insignificant as the new loan allocation, if implemented, would cover more than 75% of a typical tertiary course.
It is learnt that Masterskill’s management is currently pursuing its recent appeal against PTPTN’s new ruling capping loans of RM45,000 for new courses.
An analyst also said the government is unlikely to stop funding the programme, which is an important national initiative to help students finance their higher education. “The government is more likely to focus on the collection process through the Internal Revenue Board and other means, rather than stop funding”, he added.
Notwithstanding that, Masterskill continued to take a beating in the subsequent months as Fidelity and SmallCap World disposed of their shares in the company.
As OSK Research put it, the high foreign ownership could keep investors’ interest at bay as Asian inflation fears could trigger portfolio reallocation.
Nevertheless, things could be turning around as signs are pointing towards a potential end of selling by foreign funds.
Monday, 04 April 2011 11:54
Could selling by foreign shareholders in Masterskill Education Group Bhd — the biggest catalyst for its depressed share price — be finally coming to an end? According to analysts, that is a strong possibility, judging by the high volume traded in the last six weeks, and especially late last week, plus the fact that Masterskill’s share price has since rebounded strongly.
Since hitting an all-time low of RM1.67 on March 15, the stock has rallied 28.7% to hit RM2.15 last Friday.
Despite the recent rebound, the stock is trading at just half of its all-time high of RM4.30 and 43% below its IPO price of RM3.80.
It was the sixth most actively traded stock last Friday, gaining 23 sen or 12% to RM2.15 on heavy volume of 30.58 million shares.
If the foreign selling overhang is over, analysts expect Masterskill’s share price to better reflect its fundamentals.
After the debut in May last year, shares of the nursing and allied health sciences educator surged to a high of RM4.30 two months later compared with its IPO price of RM3.80, before it spiralled downwards.
Heavy foreign selling by two US-based portfolio funds — Smallcap World Fund Inc and Fidelity Management and Research LLC — was the key reason behind the collapse in its share price, even as the company delivered strong earnings that were within expectations.
Concerns on the ballooning deficit at Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN), the National Higher Education Fund Corp, as a result of a rising number of default payments were said to have accelerated the selling in Masterskill.
Over 90% of Masterskill’s students are financed by PTPTN loans.
The two portfolio funds ceased to be substantial shareholders of Masterskill in mid-February. This means that their respective stakes fell below the 5% threshold and they do not need to disclose further sales.
From the volume traded since then and assuming the two funds are the largest sellers of Masterskill shares at depressed prices, it would appear that the bulk or possibly all of their remaining shares may have already been disposed of.
When contacted, Masterskill officials declined to comment on its foreign shareholding.
Smallcap ceased to be a substantial shareholder after disposing of 230,200 shares or a 0.56% stake in the firm on Feb 16, paring its total shareholding to 20.48 million shares or a 4.99% stake.
On the other hand, Fidelity ceased to be a substantial shareholder after it sold 167,400 shares or a 0.41% stake on Feb 10, reducing its interest to 20.43 million shares or a 4.98% stake. Collectively, both funds had 40.91 million shares left in mid-February this year.
Between Feb 17 and April 1, the counter saw a total of 109.57 million shares changing hands, with 30.58 million shares traded last Friday alone, according to calculations by The Edge Financial Daily. This was nearly three times the total amount of shares held by the two funds.
Incidentally, between Feb 17 and March 15, when the stock hit an all-time low of RM1.67, a total of 43.76 million shares were transacted over 19 trading days, according to estimates by the daily.
This was slightly more than the shares held by the two US funds, suggesting that selling pressure might have climaxed then when the stock reached its nadir before rebounding.
Given the sharp fall in the share price, analysts see value in Masterskill. Seven out of eight analysts have “buy” recommendations on the stock.
The consensus target price on the stock is RM4.60, according to Bloomberg data. This is more than double last Friday’s closing price of RM2.15.
Maintaining a “trading buy” recommendation on Masterskills, OSK Research, for instance, said the stock is currently trading at an alluring price-to-earnings ratio (PER) for FY11 while offering a dividend yield of more than 7%. It has forecast earnings per share of 28.7 sen for FY11, implying a forward PER of 7.5 times. Its target price for the stock is RM3.44 based on 12 times PER for FY11.
Masterskill declared a final single-tier dividend of 7.9 sen a share last Wednesday, translating into total single-tier dividends of 14.9 sen for FY10.
Based on last Friday’s closing price, the counter fetches a high net dividend yield of 6.9%.
Masterskill’s net profit for FY10 rose almost 5% to RM102.14 million from RM97.38 million a year ago on the back of a 15.49% increase in revenue to RM315.74 million from RM273.39 million.
With earnings per share of 24.9 sen, the stock is trading at a historical PER of just 8.6 times.
Its cash flow from operating activities increased to RM109.5 million in FY10 from RM101.1 million a year ago.
In addition, the net cash position had also improved to RM99.41 million as at Dec 31, 2010 from RM30.23 million a year ago, allowing the company to capitalise on expansion at an opportune time.
On the concern about PTPTN funding, OSK Research said it was optimistic that the impact should be insignificant as the new loan allocation, if implemented, would cover more than 75% of a typical tertiary course.
It is learnt that Masterskill’s management is currently pursuing its recent appeal against PTPTN’s new ruling capping loans of RM45,000 for new courses.
An analyst also said the government is unlikely to stop funding the programme, which is an important national initiative to help students finance their higher education. “The government is more likely to focus on the collection process through the Internal Revenue Board and other means, rather than stop funding”, he added.
Notwithstanding that, Masterskill continued to take a beating in the subsequent months as Fidelity and SmallCap World disposed of their shares in the company.
As OSK Research put it, the high foreign ownership could keep investors’ interest at bay as Asian inflation fears could trigger portfolio reallocation.
Nevertheless, things could be turning around as signs are pointing towards a potential end of selling by foreign funds.
Wednesday, March 30, 2011
Masterskill Declared 7.9 cents final dividend payout
Source: The Edge | Publish date: Thu, 31 Mar 08:25
KUALA LUMPUR: Masterskill Education Group Bhd shares rose on Thursday, March 31 after it recommended a final single tier dividend of 7.9 sen per 20 sen share for the financial year ended Dec 31, 2010.
At 9.25am, Masterskill was up six sen to RM1.91 with 1.61 million shares traded.
It said on Wednesday, March 30 the dividends would be payable on June 15. The group had on Oct 13, 2010, completed the distribution of an interim dividend of seven sen per share to the shareholders.
The total of 14.9 sen per share dividend for 2010 will represent a total payout of 60% of its net profit, equivalent to RM61 million.
OSK Research maintains Trading Buy on Masterskill, unch FV RM3.44
Price Target date: 31/03/2011 | Source: OSK
KUALA LUMPUR: OSK Research is maintaining a Trading Buy on Masterskill Education Group Bhd (MEGB) at an unchanged FV of RM3.44 at 12x FY11 PER.
It said on Thursday, March 31 the stock is currently trading at an alluring FY11 PER of 6.4x, the cheapest in its coverage, with dividend yield of'' more than 7% p.a.
'With the stock's valuation at its trough, we believe that any further downside risks are unlikely and hence we see this as an opportune time to accumulate. Its key re-rating catalysts are more affirmative indications in relation to PTPTN's loan allocation and the potential approval of courses at its new Kuching campus,' it said.
http://klse.i3investor.com/servlets/fdnews/195225.jsp
Sunday, March 27, 2011
Under-performing stocks boost yields
Written by Insider Asia
Friday, 25 March 2011 11:43
Recent selldown lowers valuations and raises yields for Masterskill
Another stock expected to offer investors higher-than-market average yield, driven by the sharp decline in its share price is Masterskill Education Group Bhd.
The stock has fallen well off its peak of RM4.25 last year, depressed by a confluence of factors. These include uncertainty over potential cutbacks in the National Higher Education Fund Corp (PTPTN) loan scheme, selldown by foreign investors as well as some delays in the opening of its new campuses. Still, despite its share price weakness, the company’s earnings have met market expectations. Revenue was up 15% to RM315.7 million in 2010 while net profit grew 5% to RM102.1 million or 24.9 sen per share.
Its outlook appears upbeat. The education industry, as a whole, is widely viewed as recession-proof and prospects for growth are good. The company, which offers a wide range of higher education and training services in nursing and health services, expects to maintain earnings growth on the back of campus expansion plans and rising student numbers. It recently secured approval for programmes for its new campuses in Kuching and Seri Alam, Johor, from the Higher Education Ministry. In a related development, the government recently indicated that repayments for study loans under the PTPTN have improved in the past three years. This bodes well for Masterskill. The national fund is in deep deficit, raising concerns on its future funding capability — which is the primary source of financing for the majority of students undertaking Masterskill courses.
Some of the measures undertaken include the transfer of loan collection responsibility to the Internal Revenue Department last May, so that repayments could be made through salary deductions. PTPTN is also developing a loan management system, to be completed next year, to further improve and enhance repayments.
Masterskill targets to pay out 50%-60% of net profit
Masterskill has a relatively generous dividend policy, with a target payout of 50%-60% of annual net profit. We estimate dividends to total 13.6 sen per share for the current year, assuming a 50% earnings payout. That would translate into an attractive net yield of 7.3% at the prevailing price of RM1.85.
Steady cashflow from operations and a strong balance sheet would support both the company’s expansion plans and dividend payout. Net cash totalled RM99.4 million at end-2010 or roughly 24.3 sen per share.
The recent selldown has driven Masterskill’s valuations lower — forward P/E estimated at just about 6.8 times — well below that of peers HELP International Corp Bhd and SEG International Bhd as well as the broader market’s average valuations.
Friday, 25 March 2011 11:43
Recent selldown lowers valuations and raises yields for Masterskill
Another stock expected to offer investors higher-than-market average yield, driven by the sharp decline in its share price is Masterskill Education Group Bhd.
The stock has fallen well off its peak of RM4.25 last year, depressed by a confluence of factors. These include uncertainty over potential cutbacks in the National Higher Education Fund Corp (PTPTN) loan scheme, selldown by foreign investors as well as some delays in the opening of its new campuses. Still, despite its share price weakness, the company’s earnings have met market expectations. Revenue was up 15% to RM315.7 million in 2010 while net profit grew 5% to RM102.1 million or 24.9 sen per share.
Its outlook appears upbeat. The education industry, as a whole, is widely viewed as recession-proof and prospects for growth are good. The company, which offers a wide range of higher education and training services in nursing and health services, expects to maintain earnings growth on the back of campus expansion plans and rising student numbers. It recently secured approval for programmes for its new campuses in Kuching and Seri Alam, Johor, from the Higher Education Ministry. In a related development, the government recently indicated that repayments for study loans under the PTPTN have improved in the past three years. This bodes well for Masterskill. The national fund is in deep deficit, raising concerns on its future funding capability — which is the primary source of financing for the majority of students undertaking Masterskill courses.
Some of the measures undertaken include the transfer of loan collection responsibility to the Internal Revenue Department last May, so that repayments could be made through salary deductions. PTPTN is also developing a loan management system, to be completed next year, to further improve and enhance repayments.
Masterskill targets to pay out 50%-60% of net profit
Masterskill has a relatively generous dividend policy, with a target payout of 50%-60% of annual net profit. We estimate dividends to total 13.6 sen per share for the current year, assuming a 50% earnings payout. That would translate into an attractive net yield of 7.3% at the prevailing price of RM1.85.
Steady cashflow from operations and a strong balance sheet would support both the company’s expansion plans and dividend payout. Net cash totalled RM99.4 million at end-2010 or roughly 24.3 sen per share.
The recent selldown has driven Masterskill’s valuations lower — forward P/E estimated at just about 6.8 times — well below that of peers HELP International Corp Bhd and SEG International Bhd as well as the broader market’s average valuations.
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