Prestariang  closed  off  FY13  with  results  that  were  largely  in  line  with our/consensus  expectations  –  93%/94.2%  of  full-year  estimates. Earnings  were  lifted  by  its  training  and  certification  division,  which booked higher revenue contributions.  We continue to like the company given  its  recent  venture  into  the  oil  &  gas-related  training  business. Maintain BUY with our FV revised upwards to MYR3.88 (from MYR3.37).

• A  record  year  for  earnings.  Prestariang’s  FY13  revenue  came  in  at MYR119.4m  (-14.4%  q-o-q;  +8.4%  y-o-y).  This  was  bolstered  by  its training and certification division, which  saw topline surge 76% y-o-y to MYR59.9m. Thanks to this better yielding division,  Prestariang  recorded a FY13 net profit of MYR42.1m (+12.8% y-o-y) – a record for Prestariang since listing in July 2011. However, on a sequential basis, its MYR30.4m 4Q13 revenue and MYR10.7m core earnings declined 14.4% and 12.7% respectively  from  the  lower  number  of  ICT  training  classes  conducted during  the  quarter.  Prestariang  also  declared  a  final  DPS  of  3.0  sen, bringing  its  total  FY13 DPS to 12.0 sen. This  translates  into a generous 63% payout ratio, implying a yield of 3.6% for FY13.
• 1-for-1  bonus issue.  On a separate note, Prestariang  has proposed a 1-for-1  bonus issue of up to 220m bonus shares. This issuance will be fully capitalised from its share premium  account  and retained earnings,and  will  increase its share base to 440m. We believe that this will  boost trading sentiment by increasing the stock’s liquidity as well as reward its existing  shareholders.  Based  on  its  last  closing  price  of  MYR3.29,  the share price will be adjusted to MYR1.65 ex-bonus.
• Maintain  BUY.  We  continue  to  like  Prestariang  for  its  long-term fundamentals and its recent  expansion  into the  oil &  gas-related training business,  which  we  believe  will  be  a  key  earnings  driver  for  next  few years. Overall, we make no changes to our core assumptions, but tweak our FY14  estimates slightly lower by  1.8% after  updating  our model. We maintain  our  BUY  call  with  our  FV  bumped  up  to  MYR3.88  (from MYR3.37).  In our  opinion,  Prestariang  deserves  a  higher  target  P/E  of 17.5x (from 15x) on FY14 considering it can deliver sustainable earnings growth in the 15-20% range.  Note that its peer SEGi (SYS MK, SELL,FV: MYR0.76) has a five-year historical P/E of 31x. 

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SWOT Analysis

Company Profile
Prestariang  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