Stock Name: PRESBHD
Company Name: PRESTARIANG BERHAD
Prestariang Bhd
(Sept 29, 53.5 sen)
Initiating coverage with a buy rating at 50 sen with a fair value of 92 sen: Prestariang is involved in the provision of information and communications technology (ICT) services focusing on professional training and certification, as well as the distribution and management of software licences. We like the company's sturdy order book of close to RM280 million, its established relationship with key partner Microsoft, innovative in-house developed products and its appealing valuation backed by a dividend yield of more than 10% in the next two years. ''
We see strength in Prestariang's two core businesses given their synergy and complementary characteristics, whereby ICT training and certification is typically provided together with the licensing of the software used in its training and certification. While it can be argued that Prestariang is a technology player, we see greater potential in its professional training and certification business, which pits it closer to education players such as SEGi, Masterskill and HELP. ''
Prestariang has to date secured an order book of close to RM280 million, with projects spanning one to four years up to 2015. Its anchor projects include the RM80 million industry-based certification programme, which received the nod earlier for renewal for another four years and its RM60 million MUSE programme through which it provides and maintains software licences for all public higher education institutions in Malaysia.
Its close rapport with valued partners such as Microsoft, Oracle, IBM and Autodesk, helped sustain profitability margins. Of note, Prestariang has established close ties with Microsoft, which has been its single most important partner for the last eight years for provision of software and training certification. Going forward, we see more upside potential for the group's profit margins going into FY12, with a target of 36% at the net level at the close of the year on greater economies of scale.
Prestariang also focuses on R&D activities to develop new programmes in-house by working with partners in related fields. We like its R&D-centric focus as creating its own intellectual properties could help to drive up margins as well as provide a launching pad for its regional expansion going forward.
Given its'' robust balance sheet with minimal capex requirements apart from R&D expenditure, management has set a dividend policy of up to 50% for the next three years. For our forecast earnings, this translates into a lucrative dividend yield of more than 10% for both FY11 and FY12 given the recent weakness in share price, which has retraced by >44% since going public in late July this year. ' OSK Research, Sept 29
This article appeared in The Edge Financial Daily, September 30, 2011.
Company Name: PRESTARIANG BERHAD
| Research House: OSK | Price Call: BUY | Target Price: 0.92 |
Prestariang Bhd
(Sept 29, 53.5 sen)
Initiating coverage with a buy rating at 50 sen with a fair value of 92 sen: Prestariang is involved in the provision of information and communications technology (ICT) services focusing on professional training and certification, as well as the distribution and management of software licences. We like the company's sturdy order book of close to RM280 million, its established relationship with key partner Microsoft, innovative in-house developed products and its appealing valuation backed by a dividend yield of more than 10% in the next two years. ''
We see strength in Prestariang's two core businesses given their synergy and complementary characteristics, whereby ICT training and certification is typically provided together with the licensing of the software used in its training and certification. While it can be argued that Prestariang is a technology player, we see greater potential in its professional training and certification business, which pits it closer to education players such as SEGi, Masterskill and HELP. ''
Prestariang has to date secured an order book of close to RM280 million, with projects spanning one to four years up to 2015. Its anchor projects include the RM80 million industry-based certification programme, which received the nod earlier for renewal for another four years and its RM60 million MUSE programme through which it provides and maintains software licences for all public higher education institutions in Malaysia.
Its close rapport with valued partners such as Microsoft, Oracle, IBM and Autodesk, helped sustain profitability margins. Of note, Prestariang has established close ties with Microsoft, which has been its single most important partner for the last eight years for provision of software and training certification. Going forward, we see more upside potential for the group's profit margins going into FY12, with a target of 36% at the net level at the close of the year on greater economies of scale.
Prestariang also focuses on R&D activities to develop new programmes in-house by working with partners in related fields. We like its R&D-centric focus as creating its own intellectual properties could help to drive up margins as well as provide a launching pad for its regional expansion going forward.
Given its'' robust balance sheet with minimal capex requirements apart from R&D expenditure, management has set a dividend policy of up to 50% for the next three years. For our forecast earnings, this translates into a lucrative dividend yield of more than 10% for both FY11 and FY12 given the recent weakness in share price, which has retraced by >44% since going public in late July this year. ' OSK Research, Sept 29
This article appeared in The Edge Financial Daily, September 30, 2011.
No comments:
Post a Comment