Prestariang zooming in on training

by **hlk** Tue 28 May 2013, 13:27

Business & Markets 2013
Written by CIMB Research
Tuesday, 28 May 2013 10:15
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Prestariang Bhd
(May 27, RM1.70)
Maintain outperform at RM1.74 with a target price of RM2.79:
Management sounded a long-term positive note about developments in
its information and communications TECHNOLOGY [] (ICT) training and
certification division at a recent meeting with analysts and also on its
new in-house intellectual property (IP) programmes, such as Proficiency
in Enterprise Communications (PEC) and SmartGreen.
We maintain our earnings per share forecasts and target price, based
on an unchanged 12.5 times calendar year 2014 price-earnings ratio
(PER). The stock continues to be an “outperform”. Dividend yields
remain attractive at 6% to 7% even after the recent share price rally.
More major ICT orders or better than expected enrolment in UniMy
could catalyse the stock. Prestariang is our top pick in the small cap
sector.
Last Thursday’s briefing yielded two positive surprises. First,
Prestariang is optimistic about the merger between the Education
Ministry and the Higher Education Ministry as the company believes
there is on potential to up-sell its ICT training and software services
across the education spectrum.
One area the company is hoping to work on with the government is to
provide ICT training and certification for public school teachers. We
believe this should be in line with the government’s view to benchmark
the country’s education standard on a global basis. We understand the government would like its teachers to use more
technology in the classroom.
Second, its new in-house IP SmartGreen (SG) certification programme started to generate revenue in the second quarter
ending June of 2013 financial year (2QFY13), which was faster than we had expected. In Europe, 100 users have already
participated in its SG certification. Its other in-house IP programme, PEC, is expected to be commercially launched by 4Q.
We believe management has been putting in a lot of effort into growing its in-house IP programmes, such as IC Citizen (ICC),
SG and PEC. The ICC programme has been a great success. Launched in 2010, ICC will have trained around 80,000
students by end-2013. Management is looking to develop ICC@2.0 in the near future to cater for other market segments.
Remain invested in the stock. Earnings could surprise on the upside. — CIMB Research, May 27