Prestariang  (PRES)’  9MFY13  core  earnings  rose  16.6%  y-o-y  to MYR31.4m,  driven  by  higher  contribution  from  its  training  and certification division. The earnings were in line, at 69.2% of our full-year estimates. We are also positive on its recently-announced M&A venture. Maintain  BUY,  with  our  FV  unchanged  at  MYR3.37,  pegged  to  an existing  15.0x  FY14  P/E,  as  we  anticipate  a  slew  of  O&G  contracts  to catalyse a re-rating of its share price.

• Solid 9MFY13 numbers. PRES’ 9MFY13 revenue inched up 3.6% y-o-y to  MYR88.9m,  boosted  by  its  training  and  certification  division,  which surged  51.8%  y-o-y  to  MYR17.0m.  However,  this  was  offset  by  lower contribution  from  its  software  licensing  management  division.  All  in, 9MFY13 core earnings of MYR31.4m came in line with our expectations,accounting  for  69.2%  of  our  full-year  estimates.  Sequentially,  PRES’ 3QFY13 revenue improved 30.4% q-o-q and 0.3% y-o-y to MYR35.5m due  to  better  showing  at  its  more  profitable  training  and  certification division.  This  in  turn  boosted  its  3QFY13  core  earnings  to  MYR12.3m (+23.3% q-o-q; +20.9% y-o-y).
• Dividend of 3.5 sen.  PRES  announced a third interim DPS of 3.5 sen,bringing  its YTD DPS  to 9.0  sen, for a payout ratio of 63.1%. We expect the group to pay out another  2.0 sen in 4QFY13, followed by 12.0 sen in FY14, which will translate into  an attractive yield of around 4.8% for  this year and the next.
• Sizzling  prospects  in  O&G.  PRES  announced  on  15  Nov  that  it  has acquired  an  O&G  academy  to  immediately  roll  out  skills  certification training programmes for young recruits in the O&G industry.  At the same time, it  has  secured a contract worth MYR2.2m which we believe would be conducted under the said academy. We are positive on the move as it further solidifies PRES’ position in the O&G industry. Going forward,  we expect more O&G-related contracts to come on board.
• Maintain  BUY.  Maintain  BUY,  with  our  FV  unchanged  at  MYR3.37,based  on  an  existing  15.0x  FY14  P/E,  as  we  expect  a  slew  of  O&G related contracts to push the share price to new highs.

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Company Profile
Prestariang  (PRES)  provides ICT services focused on professional training and certification with industry partners such as Microsoft, IBM, Oracle and Autodesk.

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Source: RHB