In our recent meeting with Management, we gathered that HELP’s international school remains on track and will be completed in August
this year. Management has yet to finalise funding for its flagship campus but we believe it may involve both equity and debt financing. All in, we make no changes to our forecasts and reiterate our NEUTRAL call with FV of MYR1.88, based on an unchanged 10x FY13 P/E and FY13 net cash per share of 45 sen.

 International school right on schedule. Progress on HELP’s MYR30m international school is on track to be completed by August this year for commencement of classes in 4QCY13, with 300 students in its first intake. Management has allotted a capex of MYR33m and has recruited a total of 30 academics from different backgrounds. At an average fee of MYR30k per student annually, this would translate into an income of more than MYR20m when the school reaches its full capacity of 3k students, assuming a net margin of 20%. We have yet to incorporate this new segment into our forecasts though we would likely make an earnings should classes commence on time.
 Progress on flagship campus on track. Recall that Management has decided to reduce the capex for its proposed new Subang 2 flagship campus from MYR160m to MYR60m, with capacity now at 10k (previously 6k-8k), to prevent burdening its balance sheet. The funding, however, is yet to be finalized as Management is still considering various options such as equity and debt issuance. We expect Management to firm up the financing details for its new campus by mid-2013.
 Maintain NEUTRAL. We came away from the briefing with Management still feeling positive on the company’s venture into the private
international school sector. However, we remain cautious pending the finalization of funding for its new Subang 2 campus as well as the
relatively weak student enrolment at its Fraser campus. As such, we maintain our NEUTRAL call and MYR1.88 FV, based on an existing 10x FY13 P/E. We are projecting for a FY13 net cash per share of 45 sen.

Source: RHB