HwangDBS Research - 29 May 2012
Price Target : 0.70

1Q12 registered RM2.9m net loss. Surprised with 14.64 sen DPS (14.5% net yield) despite poor result. Maintain FULLY VALUED rating and RM0.70 TP (pegged to 10x FY12F EPS of 7.0 sen).

i)MEGB has decided to defer the construction of buildings for their proposed main campus for the time being and the unutilised amount of RM76.97 million for use as working capital in view that such sum has not been utilised within the expected timeframe of twenty four (24) months as disclosed in the Prospectus. MEGB has declared a dividend of 14.64 sen totaling Rm60.01 million. Payment will be on 3/7/2012.

Hahahhahaha....Eventhough making a loss, MEGB is using Ipo cash for the proposed main campus(Rm76.97 million) to pay for dividend.

Q: Will this dividend payment be the last dividend from MEGB?
A: My assumption probably yes!



ii) For the 1QE12 MEGB is making a loss of Rm4.372 million. The previous 1QE11 the profit was at Rm24.879 million.

Q: Will the 2QE12 MEGB making a loss also?
A: My assumption mostly yes!

So to those holding, good luck. Predicted will drop further after the Entitlement date that is 12/06/2012.

Well for me , not interested to invest in this counter.

Well, this counter is not for those weak heart! Hahahahahah......! Dropping from 3.80 till the new low at 0.940sen. To those holding all the best. For me, never like this counter cos too much dependent on PTPTN's loan.

The reduction in the PTPTN’s loan schedule and the increase in the minimum entry requirements by the Malaysian Nursing Board had led to drop on student intake.

Imagine without PTPTN's loan, what’s going to happen to this counter?
Hehehehe!! So folks, be extra careful with your hard earned money when investing.

Announcement to Bursa dated 18/05/12

MEGB wishes to announce that due to among others,

(i) the reduction in the PTPTN’s loan schedule and
(ii)the increase in the minimum entry requirements by the Malaysian Nursing Board, which had led to a drop in student enrolment,

the Board of Directors of MEGB ("Board")

(i) has decided to defer the construction of buildings for their proposed main campus for the time being and
(ii)to reallocate the unutilised amount allocated for the purchase of land and construction of buildings amounting to RM76.97 million for use as working capital in view that such sum has not been utilised within the expected timeframe of twenty four (24) months as disclosed in the Prospectus.

Well, Q1 not going to be good and to those holding its going to be a rough ride next week onwards.

Careful now!

Latest from CIMB:

1. Speculation on bumper dividends from a land sale and unused IPO proceeds is unfounded.

2. Megb still plans to build a new campus despite the poor prospects for student intake.

3. Fair value 0.85sen.

So folks, this counter should be going south soon. Careful now!

Cheers!

Fully Valued rating with RM0.70 for this counter. Seem like the price will go south soon!

1. PTPTN's loan scheme has impacted the Group's revenue in which students who have enrolled with Masterskill after 1st Jun 2011 will receive reduced funding from PTPN to pay for the fees from 60k to 45k only to be made available to each eligible student. As such MEGB has to reduced the diploma fees to 50k.

2. The increase in minimum entry requipment for nursing programme from 3 credits to 5 credits (SPM) has also impacted the number of students joining the programme.

3. Academic staffs cost increased in line with the Malaysian Qualification Agency (MQA) requirement standard in which the teaching to student ratio for science programmes is 1: 20 instead of 1: 30 previously.

4. Earnings was also impacted by higher operating overheads due to the company's on-going expansion plans, which also resulted in higher depreciation and staff costs.

5. According to The Edge Weekly, Megb may distribute a bumper dividend from its remaining IPO proceeds (RM73.7m) and the potential sale of 10 plots of land in Kajang (RM38.8m). The combined amount of RM112.5m would translate to a potential dividend payment of RM0.27 per share. This comes as Megb may not need to develop the land – which was originally intended to be used for a multi-purpose university campus with 700k sq ft built-up area and a capacity of 20k students – due to the decline in its student enrolments.

6. While there is always a possibility for such bumper dividends to be made, the counter argument is that it would be better for Megb to conserve its cash pile amid the prevailing tough business environment. We also believe that Megb would not want to dispose of its plots of land in Kajang in the near-term, given the requirement to own a purpose-built campus for its university college status and its plan to offer more degree programmes in the longer run.

All the best to those buying. Cheers!

Stock....Price(RM).....Target(RM).....Market Cap(RMmil).....Rating

HELP.......1.71..........1.55.............242.9.............Neutral

MEGB.......1.16..........0.84.............475.5.............Sell

PresBhd....0.89..........1.48.............195.8.............Buy

SEGi.......1.75..........2.17.............978.9.............Buy

Source : OSK Research

Cheers!

1. PTPTN's loan scheme has impacted the Group's revenue in which students who have enrolled with Masterskill after 1st Jun 2011 will receive reduced funding from PTPN to pay for the fees from 60k to 45k only to be made available to each eligible student. As such MEGB has to reduced the diploma fees to 50k.

2. The increase in minimum entry requipment for nursing programme from 3 credits to 5 credits (SPM) has also impacted the number of students joining the programme.

3. Academic staffs cost increased in line with the Malaysian Qualification Agency (MQA) requirement standard in which the teaching to student ratio for science programmes is 1: 20 instead of 1: 30 previously.

4. Earnings was also impacted by higher operating overheads due to the company's on-going expansion plans, which also resulted in higher depreciation and staff costs

All the best to those buying. Cheers!

You are right! Segi must more better than Megb. Masterskill to much dependant on PTPTN that is almost 94% of its student on PTPTN loan.

1st QE12 will be worst than previous 1st QE11. Operation expenses higher but the revenue is falling from Q to Q!

30% of paid up capital for Private placement at 0.275 sen. Will buy & hold this counter at 0.275 below. Once private placement approved by shareholders then more good news coming from the new management. All the best!

Hahahaha...foreign funds dumping this stock from 3.80 till all the way down to 1.10 sen. Now price supported by the CEO. Let see how the 1st QE12 will be. Will be announced mid next month.