RHBInvest Research Highlights 16th December 2011

Stock Name: HELP
Company Name: HELP INTERNATIONAL CORPORATION

Research House: RHB

Price Call: HOLD

Target Price: 1.80

16th December 2011

 

Top Story

Media Prima ' Keeping its chin up in 2012                                                               Underperform Visit Note -                  Management believes the current environment looks challenging, given the prevailing debt issues in Europe that have led to advertisers tightening their ad spending. Maintaining margins will be one of the key challenges amid rising staff costs. -                  Maintain earnings forecasts and indicative fair value of RM2.10 based on 12x CY12 EPS of 17.5 sen. Media Prima is vulnerable in the event of an economic downturn from its high exposure to the more expensive broadcasting segment. Maintain Underperform. -                  Related story: Media Prima Results Note ' Festivities And Cost Efficiencies Boost Profits (21 Nov 2011); Media Sector Update ' Adex Recovers In Oct (22 Nov 2011)

Corporate Highlights

HELP ' Expecting a better quarter                                                                          Market Perform Results Preview -          HELP is due to release 4QFY10/11 results on 22 Dec. We are expecting 4QFY11 net profit of RM2m that is a sequential improvement given: 1) historical trends; and 2) lower-than-expected 3Q11. Full-year dividend is anticipated to be minimal, as HELP is conserving its cash for the construction of its Subang 2 campus. -          The key earnings driver for HELP in FY12 would be the contribution from its Frasers Business Park campus, where management is guiding for up to 1,000 new students for the campus in FY12, an almost 10% increase on HELP's current total student numbers. -          No change to forecasts. Maintain Market Perform (after upgrading the stock from Underperform on 1 Dec), with an unchanged fair value of RM1.80. -          Related story: HELP Results Note ' Below Expectations Again (29 Sep 2011); Education Sector Update ' Waning Optimism (29 Sep 2011)   Dialog ' Rights and warrants priced                                                                              Outperform News Update -          Yesterday, Dialog announced that the rights issue has been priced at: 1) RM1.20/share for the new rights; and 2) RM2.40/warrant. The price of the new shares is a discount of 46.5% to the estimated theoretical ex-price of RM2.23/share (based on the five-day volume weighted average market price of Dialog up to 14 Dec). -          We believe the additional discount is mainly to entice shareholders given the volatile market conditions, but the higher exercise price for the warrants suggests that the company is confident on delivering in the longer term. Maintain Outperform. -          Related story: Dialog News Update ' Proposed Fund Raising For Long-Term Projects (19 Aug 2011)