Prestariang  posted  4QFY12  core  earnings  of  RM10.4m  while  its  FY12  net  profit  ofRM37.3m  was  within  expectations,  making  up  98.1%  of  our  forecast.  4QFY12  net profit ticked up 1.6% q-o-q but dipped 1.7% y-o-y, pulled down by start-up expenses incurred by its new university during the quarter. Management has declared a final DPS of 3.0 sen, bringing its FY12 DPS to 10.0 sen, for a payout ratio of 59%. Maintain BUY, with our FV tweaked slightly to RM2.11 as we update our FY12 numbers, and based on an unchanged 10x FY13 PE.

Within estimates. Prestariang's FY12 revenue of RM110.1m fell by a marginal 1.5% y-o-y due  to  lower  contribution  from  the  company's  training  and  certification  division. Nonetheless,  its  FY12  core  earnings  jumped  10.9%  higher  y-o-y  to  RM37.3m  on  better margins  achieved  during  the  year.  On  a  quarterly  basis,  its  4QFY12  revenue  slipped 25.7%  y-o-y  and  31.4%  q-o-q  to  RM24.2m  due  to  slower  billings  during  the  quarter. However, the company's 4QFY12 net profit ticked up by 1.6% q-o-q  but was 1.7% lower y-o-y  to RM10.4m,  attributed  to  one-off  expenses  incurred  in  setting  up  its  new  boutique university, University of Computer Science and Engineering (UniMy), during the quarter.

Another generous dividend. Prestariang has declared a final DPS of 3.0 sen, bringing its FY12 DPS to 10.0 sen, which translate into a generous payout ratio of 59% as well as an appealing yield of over 10% for FY12. In view of its light asset business model, we see the company  paying  a  DPS  of  11.0  sen  for  FY13  and  12.0  sen  for  FY14,  representing  a lucrative more than 9% yield over the next two years.

BUY.  We continue to like Prestariang's long-term  fundamentals  as  well  as  its  appealing valuation.  With  UniMy  well  in  place,  the  group  may  see  this  income  stream  potentially generating RM15m to RM20m in recurring earnings annually. Management said efforts are underway to secure more O&G-related training jobs. Overall, we make no changes to our core assumptions but tweak our FY13 and FY14 estimates slightly lower by 2%-3% as we update our model following the release of the company's FY12 results. Maintain BUY, with our new FV at RM2.11, based on an unchanged 10x FY13 PE.a

Source: OSK