HELP  reported  marginally  higher  full-year  results  in  Dec  2013  on  an increase  in  student  enrolment.  We  continue  to  like  the  group’s  solid management team and healthy balance sheet. We also like its foray into the  international  private  school  space,  which  will  provide  long-term recurring  income  stream  given  the  large  market  base.  As  HELP  will soon  be  taken  private  by  new  owners  BEE,  we  are  discontinuing coverage on the company.

• Positive  FY13  results.  HELP  has  reported  marginally  better  than expected FY13 core net profit of MYR12.1m. This came in at 106% of our full-year estimates, as we were previously more conservative on our estimates  given  the  challenging  operating  environment.  The  improved performance was attributed to higher-than-anticipated student enrolment during the period under review.
• Business as usual.  We understand that  HELP’s operations  will not be impacted following its proposed takeover by   Better Education Enterprise SB (BEE), as co-founder Datuk Dr Paul Chan, together with members of his family, will continue on in key management positions. We continue to like  the  group’s  healthy  balance  sheet  and  experienced  management team. We also like  its foray into the private international school space,which  we  believe  will  provide  HELP  with  a  long-term  recurring  income given this segment’s larger market base.
• Ceasing coverage.    In 4QCY13,  HELP received a conditional takeover offer  from  Southern  Capital  Partners  III  Ltd  via  BEE,  to  acquire  all  its ordinary shares at an aggregate cash consideration of MYR359.3m, or MYR2.53/share. The group’s shareholders have  already  given the green light to this corporate exercise. As BEE has stated that it does not intend to maintain  HELP’s listed status,  we are ceasing coverage on the group. Our previous  NEUTRAL  recommendation was  pegged to the offer price of MYR2.53.

Financial Exhibits

SWOT Analysis

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

Recommendation Chart

Source: RHB