CIMB Research maintains Outperform on Masterskill

KUALA LUMPUR: CIMB Equities Research has lowered the target price for Masterskill Education Group Bhd from RM4.48 to RM3.48 but it is maintaining an OUTPERFORM rating while the main potential catalyst is the recovery of investor sentiment.

It said on Monday, June 27 The Edge’s article highlighted Masterskill CEO and ED’s comments on his health after a brain aneurysm, confirming speculation on it early this year.

“Positive surprises include (i) the operation of smart schools which are in good demand, (ii) diversification into business-related courses, and (iii) a 2012 target for the launch of its Indonesian campus.

“However, the delay in revealing the developments in the CEO’s health could highlight the issue of transparency and corporate governance. In view of this, we raise our discount to our 14.5 times target market P/E from 10% to 30%, in line with our small-cap valuations,” it said.

CIMB Research said though its target price is cut from RM4.48 to RM3.48, it maintains an OUTPERFORM rating as its CY11-12 P/E of six to seven times and 9% dividend yields are attractive. The main potential catalyst is the recovery of investor sentiment.