Stock Name: SEG
Company Name: SEG INTERNATIONAL BHD
SEG International Bhd
(June 22, RM3.84)
Maintain outperform at RM3.83 with revised fair value of RM4.60 (from RM5.05): The media recently reported that SEGi is constructing a RM300 million to RM500 million campus in Perak. Management clarified that although there is a campus being built in Perak, SEGi is not directly involved in its construction.
SEGi has entered into an agreement with a private developer, Oakfine Development Sdn Bhd, to build the campus with SEGi leasing it from the developer upon completion. As SEGi will not be bearing any of the construction costs, there is no direct impact on SEGi's financials in the immediate term. The campus is expected to be completed in late 2013 or early 2014, which is beyond our current investment horizon.
Earlier this month, the government announced that a consortium of nine early childhood care and education (ECCE) providers had been formed under the Economic Transformation Programme (ETP). SEGi will lead the way in providing ECCE programmes and setting up the ECCE education hub.
Under this programme, SEGi will look at providing courses to kindergarten teachers and childcare providers. The courses are expected to start at end-2011 or early-2012, subject to'' government approval of the syllabus.
Management has guided that the introduction of new high margin programmes is on track. The optometry programme is already underway at its Kota Damansara campus, while the dentistry programme is currently awaiting approval.
Risks include: (i) change in requirements set by governing bodies; and (ii) a change in government policy might impact the eligibility criteria for students to obtain loans/scholarships.
We make no change to our FY11 to FY13 net profit forecasts for now. We reiterate our 'outperform' call on the stock, with a revised fair value of RM 4.60 (from RM5.05), which is based on target 18 times FY12 price earnings ratio and fully-diluted earnings per share.
In our opinion, SEGi deserves to trade at a premium to its peers with its superior three-year compound annual growth rate of 24.4% (against HELP International Corp Bhd's 17.1% and Masterskill Education Group Bhd at 11.3%) and an attractive dividend yield of 4.4% (against HELP and Masterskill of 1.7% and 7.4%). ' RHB Research, June 22
This article appeared in The Edge Financial Daily, June 23, 2011.
Company Name: SEG INTERNATIONAL BHD
| Research House: RHB | Price Call: BUY | Target Price: 4.60 |
SEG International Bhd
(June 22, RM3.84)
Maintain outperform at RM3.83 with revised fair value of RM4.60 (from RM5.05): The media recently reported that SEGi is constructing a RM300 million to RM500 million campus in Perak. Management clarified that although there is a campus being built in Perak, SEGi is not directly involved in its construction.
SEGi has entered into an agreement with a private developer, Oakfine Development Sdn Bhd, to build the campus with SEGi leasing it from the developer upon completion. As SEGi will not be bearing any of the construction costs, there is no direct impact on SEGi's financials in the immediate term. The campus is expected to be completed in late 2013 or early 2014, which is beyond our current investment horizon.
Earlier this month, the government announced that a consortium of nine early childhood care and education (ECCE) providers had been formed under the Economic Transformation Programme (ETP). SEGi will lead the way in providing ECCE programmes and setting up the ECCE education hub.
Under this programme, SEGi will look at providing courses to kindergarten teachers and childcare providers. The courses are expected to start at end-2011 or early-2012, subject to'' government approval of the syllabus.
Management has guided that the introduction of new high margin programmes is on track. The optometry programme is already underway at its Kota Damansara campus, while the dentistry programme is currently awaiting approval.
Risks include: (i) change in requirements set by governing bodies; and (ii) a change in government policy might impact the eligibility criteria for students to obtain loans/scholarships.
We make no change to our FY11 to FY13 net profit forecasts for now. We reiterate our 'outperform' call on the stock, with a revised fair value of RM 4.60 (from RM5.05), which is based on target 18 times FY12 price earnings ratio and fully-diluted earnings per share.
In our opinion, SEGi deserves to trade at a premium to its peers with its superior three-year compound annual growth rate of 24.4% (against HELP International Corp Bhd's 17.1% and Masterskill Education Group Bhd at 11.3%) and an attractive dividend yield of 4.4% (against HELP and Masterskill of 1.7% and 7.4%). ' RHB Research, June 22
This article appeared in The Edge Financial Daily, June 23, 2011.
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