Stock Name: HELP
Company Name: HELP INTERNATIONAL CORPORATION
Research House: RHB
Education sector
Initiating coverage with overweight rating: The Malaysian government recognises the importance of education as a critical asset of the nation. It was identified as one of the services sub-sectors for further growth and development during the 2006-2020 Industrial Master Plan 3 (IMP3).
Between 2007 and 2011, operating expenditure for education grew at a compound annual growth rate (CAGR) of 5.6%. In the 2011 budget, education accounts for 24.5% and 21.1% of the federal government's operating and development expenditure respectively. The education sector contributed approximately RM27 billion or 4% of gross national income in 2009, with RM23 billion from government-funded education services alone.
Over the years, the enrolment of students in private institutions has outpaced public institutions, with a CAGR of 7% (from 2002 to 2010) against 5.6% for public institutions. In 2010, private tertiary institutions enjoyed a 48% share (versus 41% in public institutions and 11% in polytechnics, community colleges and KTAR respectively) of student enrolments.
Factors that contributed to the growth of private institutions include: (i) Quota system ' while there is no quota system to enter Form Six, under the matriculation system only 10% of the places are open to non-bumiputera students; (ii) Language ' almost all private institutions use English as the principal medium of instruction; (iii) Foreign students ' foreign students are an important element of total enrolment. From 2003 to 2010, the foreign student population rose at a 42% CAGR and 72% of foreign students are in private institutions; (iv) Lack of capacity in public institutions; and (iv) Rising affluence.
Risks include: (i) Change in regulations set by the governing bodies; and (ii) A change in policy by the government might impact the eligibility criteria for students to obtain the loans/scholarships.
We believe the education sector is well poised for growth and remains a critical driver for Malaysia's transformation into a high-income nation due to its impact on productivity and human capital development.
Key growth drivers include: (i) Increasing in number of students in both public and private institutions; (ii) Strong partnerships with leading universities from all over the world; and (iii) Increasing number of foreign students.
We initiate coverage on SEG International Bhd (fair value: RM4.54) and HELP International Corp Bhd (FV: RM2.87). ' RHB Research, April 20
This article appeared in The Edge Financial Daily, April 21, 2011.
Company Name: HELP INTERNATIONAL CORPORATION
Research House: RHB
Education sector
Initiating coverage with overweight rating: The Malaysian government recognises the importance of education as a critical asset of the nation. It was identified as one of the services sub-sectors for further growth and development during the 2006-2020 Industrial Master Plan 3 (IMP3).
Between 2007 and 2011, operating expenditure for education grew at a compound annual growth rate (CAGR) of 5.6%. In the 2011 budget, education accounts for 24.5% and 21.1% of the federal government's operating and development expenditure respectively. The education sector contributed approximately RM27 billion or 4% of gross national income in 2009, with RM23 billion from government-funded education services alone.
Over the years, the enrolment of students in private institutions has outpaced public institutions, with a CAGR of 7% (from 2002 to 2010) against 5.6% for public institutions. In 2010, private tertiary institutions enjoyed a 48% share (versus 41% in public institutions and 11% in polytechnics, community colleges and KTAR respectively) of student enrolments.
Factors that contributed to the growth of private institutions include: (i) Quota system ' while there is no quota system to enter Form Six, under the matriculation system only 10% of the places are open to non-bumiputera students; (ii) Language ' almost all private institutions use English as the principal medium of instruction; (iii) Foreign students ' foreign students are an important element of total enrolment. From 2003 to 2010, the foreign student population rose at a 42% CAGR and 72% of foreign students are in private institutions; (iv) Lack of capacity in public institutions; and (iv) Rising affluence.
Risks include: (i) Change in regulations set by the governing bodies; and (ii) A change in policy by the government might impact the eligibility criteria for students to obtain the loans/scholarships.
We believe the education sector is well poised for growth and remains a critical driver for Malaysia's transformation into a high-income nation due to its impact on productivity and human capital development.
Key growth drivers include: (i) Increasing in number of students in both public and private institutions; (ii) Strong partnerships with leading universities from all over the world; and (iii) Increasing number of foreign students.
We initiate coverage on SEG International Bhd (fair value: RM4.54) and HELP International Corp Bhd (FV: RM2.87). ' RHB Research, April 20
This article appeared in The Edge Financial Daily, April 21, 2011.
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