HELP's 9MFY12 core earnings of RM9.0m represented 58.0% and 52.3% of our and consensus  forecasts  respectively.  We  deem  the  numbers  in  line  with  our expectations as we foresee a much stronger 4QFY12, boosted by a major intake in September.  We  make  no  changes  to  our  forecasts  and  retain  our  RM1.93  FV, based on an unchanged 10x FY13f PE and FY13f net cash per share of RM0.45.

9MFY12 numbers flat. HELP's 9MFY12 revenue jumped 9.3% y-o-y to RM87.0m owing to a higher estimated enrolment of 12.5k as of July 2012. EBIT, however, edged down 4.8% y-o-y to RM15.3m due to higher depreciation expenses from its Fraser campus as well  as  a  slight  uptick  in  overhead  expenses  arising  from  the  recruitment  of  lecturers following its upgrade to university status. All in, the company's 9MFY12 core earnings totaled RM9.0m, down by a slight 4.5% y-o-y.

Unexciting  quarter.  On  a  quarterly  basis,  the  3QFY12  numbers  were  weaker  than those in the previous quarter due to the seasonal slack in intake during the quarter. Y-o-y however, the company's 3QFY12 revenue improved 6.1% while core earnings jumped 34.7%, albeit insignificant in absolute terms at RM0.3m.

International  school  to  start  in  4QCY13.  Progress  on  its  proposed  RM30m international  school  remains  largely  on  track  for  commencement  of  classes  in  4QCY13 with an initial intake of 300 students. At an average fee of RM30k per student per year,
the company should register additional income of over RM20m once the school reaches full capacity, assuming a net margin of 20%. As we have yet to incorporate this into our model, an earnings revision is likely when this campus moves closer to completion.

Ground works on campus in progress. Management said it is in the midst of securing a  bankers'  guarantee  for  the  proposed  RM160m  university  campus.  The  main contractor, Beijing Urban Construction Group, has begun groundworks on the site. The funding, however, is yet to be finalized as management is considering borrowing. In view of the quantum required, we still believe that the financing may involve both equity and debt. We expect management to firm up the financing details latest by 1QCY13.

NEUTRAL. With the 9MFY12 numbers within our expectations, we make no changes to our  earnings  forecasts  for  now.  While  we  continue  to  like  the  company's  solid management  team  and  clean  books,  we  are  cautious  on  the  potential  of  a  cash  call which  could  dampen  sentiment.  Reiterate  NEUTRAL,  with  our  FV  unchanged  at RM1.93,  based  on  a  10x  FY13  PE,  plus  our  forecast  FY13  net  cash  per  share  of RM0.45.

 Source: OSK