HELP’s  MYR12.1m  FY13  net  profit  came  in  marginally  above  our expectations  –  at 106% of full-year forecasts. This was  due to  higherthan-expected student enrolments.  We  continue to  advise investors to accept  the  takeover  offer  priced  at  MYR2.53/share,  as  we  deem  it  fair and attractive.  Downgrade to NEUTRAL (from BUY), with an unchanged FV of MYR2.53 as stock price has appreciated to the offer price.

• Positive  surprise.  HELP’s  FY13  revenue  inched  up  5.7%  y-o-y  to MYR123.8m on  higher student enrolments. However, EBIT edged down 18.1% y-o-y on higher personnel costs incurred in recruiting teachers for its new private international school. All in, HELP’s FY13 core earnings totalled  MYR12.1m  (-10.3%  y-o-y),  or  106%  of  our  full-year  estimates. This  was  attributed  to  increase  student  intake.  On  a  quarterly  basis, 4QFY13  numbers  were  generally  up  y-o-y  and  q-o-q,  with  the MYR33.4m  revenue  (+19.1%  q-o-q;  10.9%  y-o-y)  and  MYR4.7m  net profit  (>100%  q-o-q;  +5.5%  y-o-y)  increases  attributed  to  a  higher student base.
• Shareholders  to  say  “yes”.  HELP  announced  on  5  Dec  that  it  has received  a  conditional  takeover  offer  from  Better  Education  Enterprise SB (BEE) to acquire its entire entity at MYR2.53/share. We understand that BEE does not intend to maintain the  company’s listing status should it  achieve  the  minimum  75%  acceptance   threshold.  The  current  major shareholders  –  Selangor Properties (SPR MK, NR),  and Datuk  Dr Paul Chan  and  family  –  hold  a  collective  59.7%  stake  in  HELP  and  have accepted the offer.  Given the attractive pricing,  which translates into  an implied  18.8x  FY14F  P/E,  or  a  19.7%  premium  to  its  5-year  historical average  P/E  of  15.7x,  we  continue  to  advise  investors  to  accept  the takeover offer.
• Downgrade  to  NEUTRAL.  Overall  we  make  no  major changes  to  our assumptions,  but tweak our FY14F estimates slightly lower by 2.2% as we update our model following the company’s FY13 results. We continue to  peg  our  FV  to  the  offer  price  of  MYR2.53 ,  as  we  believe  that  the takeover  will  likely  occur.  Given  the  limited  upside  from  its  last closing price of MYR2.52, we downgrade our call on HELP to NEUTRAL.

Financial Exhibits

SWOT Analysis

Company Profile
HELP International (HELP) is a tertiary education provider in Malaysia.

Recommendation Chart

Source: RHB