KL Trader Investment Research Articles
MEGB - Paying special dividends?
Masterskill Education; Fully Valued; RM1.07
Price Target: RM0.70; MASEG MK
According to The Edge Weekly, Masterskill may distribute a bumper dividend from its remaining IPO proceeds (of approximately RM73.7m) and the potential sale of 10 plots of land in Kajang (valued at RM38.8m). The combined amount of RM112.5m would translate to a potential dividend payment of RM0.27 per share (or a 25.2% yield based on its current share price). This comes as Masterskill may not need to develop the land – which was originally intended to be used for a multi-purpose university campus with 700k sq ft built-up area and a capacity of 20k students – due to the decline in its student enrolments.
In our view, while there is always a possibility for such bumper dividends to be made, the counter argument is that it would be better for Masterskill to conserve its cash pile amid the prevailing tough business environment. We also believe that Masterskill would not want to dispose of its plots of land in Kajang in the near-term, given the requirement to own a purpose-built campus for its university college status and its plan to offer more degree programmes in the longer run.
We maintain our Fully Valued rating with RM0.70 TP pegged to 10x FY12F EPS, with FY12F net dividend yield of 3.2% (based on a 50% payout).
Source: HwangDBS Research - 7 May 2012
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Latest from CIMB:
1. Speculation on bumper dividends from a land sale and unused IPO proceeds is unfounded.
2. Megb still plans to build a new campus despite the poor prospects for student intake.
3. Fair value 0.85sen.
So folks, this counter should be going south soon. Careful now!
Cheers!
2012-05-07 19:32
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BullBear
Fully Valued rating with RM0.70 for this counter. Seem like the price will go south soon!
1. PTPTN's loan scheme has impacted the Group's revenue in which students who have enrolled with Masterskill after 1st Jun 2011 will receive reduced funding from PTPN to pay for the fees from 60k to 45k only to be made available to each eligible student. As such MEGB has to reduced the diploma fees to 50k.
2. The increase in minimum entry requipment for nursing programme from 3 credits to 5 credits (SPM) has also impacted the number of students joining the programme.
3. Academic staffs cost increased in line with the Malaysian Qualification Agency (MQA) requirement standard in which the teaching to student ratio for science programmes is 1: 20 instead of 1: 30 previously.
4. Earnings was also impacted by higher operating overheads due to the company's on-going expansion plans, which also resulted in higher depreciation and staff costs.
5. According to The Edge Weekly, Megb may distribute a bumper dividend from its remaining IPO proceeds (RM73.7m) and the potential sale of 10 plots of land in Kajang (RM38.8m). The combined amount of RM112.5m would translate to a potential dividend payment of RM0.27 per share. This comes as Megb may not need to develop the land – which was originally intended to be used for a multi-purpose university campus with 700k sq ft built-up area and a capacity of 20k students – due to the decline in its student enrolments.
6. While there is always a possibility for such bumper dividends to be made, the counter argument is that it would be better for Megb to conserve its cash pile amid the prevailing tough business environment. We also believe that Megb would not want to dispose of its plots of land in Kajang in the near-term, given the requirement to own a purpose-built campus for its university college status and its plan to offer more degree programmes in the longer run.
All the best to those buying. Cheers!
2012-05-07 16:29