KUALA LUMPUR: OSK Research Sdn Bhd, while retaining its forecast on SEG International (SEGi) Bhd's earnings of RM91.1 million for the current financial year and RM104.9 million for 2013, is anticipating a stronger performance for the second half of the year.
In a research note, it also projected a group net profit of RM114.2 million, for 2014, up 8.9 per cent, year-on-year, over the 2013 financial year forecast, as well as a dividend yield of 3.8 per cent per annum.
"Over the medium-term, the group's proposed acquisition of a 4.856 hectare piece of land in Bandar Setia Alam from SP Setia would help it penetrate the fast growing and better-yielding private pre-school, primary and secondary education segment.
"The tuition fee at the proposed international school, likely to welcome its first intake of students sometime early 2015, would range between RM40,000 and RM50,000 per annum," the research house added.
OSK Research said it expected the group to allocate between RM50 million and RM70 million in capital expenditure to accommodate around 4,000 to 5,000 students in the school.
SEGi's first half revenue was 15.8 per cent higher, year-on-year, at RM158 million, due to higher student enrolment, which we estimated at 29,000 as of June.
Earnings before interest and tax margin, however, dipped 32.9 per cent owing to higher distribution expenses, which jumped 17.5 per cent to RM16 million during the period under review.
"All in, SEGi's core earnings for the period under review improved 15.9 per cent to RM42 million," it added.
OSK Research maintained its "buy" call on the group, with a higher fair value of RM2.52 from RM2.19 previously. -- BERNAMA
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