Thursday 29 December 2011

RHB Research remains Neutral on education sector, but earnings more stable

KUALA LUMPUR (Dec 29): RHB Research Institute remains Neutral on the education sector with few re-rating catalysts on the horizon.

It said on Thursday that the sector, after recording a lacklustre performance in 2011, “we believe that earnings will be more stable in 2012”.

RHB Research said growth was expected to be organically-driven as the players’ focus on optimising the utilisation of their existing campuses.

However, the research house pointed out the sector lacked re-rating catalysts as news flow has been relatively muted in 2H2011, and as it believed the stocks in the sector had already priced in their medium to longer-term expansion plans.

“The sector’s heavy regulation remain a concern going forward as more regulatory changes could be introduced that could potentially hamper earnings growth,” it said.



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