HELP to grow non-degree segment, says president

KUALA LUMPUR: HELP INTERNATIONAL CORPORATION [] Bhd plans to grow its non-degree segment to 30% of its contributions in five years’ time, said its president Datuk Dr Paul Chan

"We are now diversifying our revenue sources and are now working towards adult learning programmes," he said after the company’s annual general meeting on Tuesday.

Chan saiod HELP would also start offering in house training to large corporations and was now doing so with "the largest insurance company in Malaysia".

He said it also hoped to increase its student base from the current 11,000 to 20,000 by 2018 when its Subang 2 campus is completed.

The group is spending some RM200 million on building the campus which will not only cater the university but also its international school, due to start in September 2013.



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RHB Research maintains market perform on HELP, FV RM1.80

KUALA LUMPUR (March 20): RHB Research Institute is maintaining its market perform recommendation of HELP International, fair value of RM1.80.

It said on Tuesday it was positive on the company’s move to establish an IT Industry Advisory Board (IAB) to ensure the greater relevance in its curriculum and to widen its students’ exposure to internships, research and other projects. The board will consist of industry members and HELP academicians.

RHB Research said currently only about 2%, that is 200 students of HELP’s 11,000 total student population are undertaking HELP’s IT courses.

According to a study by the Multimedia Development Corp, the demand for IT graduates had increased by 18.6% over the two-year study, while supply only rose by 2.6%.

“With the fees for HELP’s IT courses averaging about RM25,000 per course, we believe that the increased awareness for the IT industry and courses could have a positive impact on HELP’s longer-term topline and bottomline. No changes to our earnings forecasts at this juncture,” it said.



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HELP to invest RM20m for international school

KUALA LUMPUR: Education outfit HELP International Corp Bhd is investing RM20 million to set up an international school in Subang Jaya to offer primary and secondary education.

In a filing with Bursa Malaysia yesterday, HELP said it had received approval from the Education Ministry to set up the international school to be located within HELP University’s flagship green technology campus.

HELP said the school would be located on a 2.8ha site and will cater for more than 3,000 students.

The first phase is expected to open in September 2013 with an initial intake of 500 to 600 students.

“The demand for quality private education in Malaysia continues to grow strongly with the population growing in affluence. The establishment of the HELP International School is part of the group’s long-term plans to expand its educational presence in the country,” it said.

HELP said the curriculum would be based on the UK syllabus leading up to the Edexcel A-levels, and it will seek partnerships with renowned international schools in Australia, the UK and the US.

HELP plans to finance the establishment of the international school via internal funds and external borrowings.

For FY11 ended October, HELP posted a net profit of RM13.06 million on the back of RM108.06 million in revenue. Earnings per share (EPS) for the 12 month period was 9.2 sen.

For FY10 the company registered net profit of almost RM19.1 million from RM105.20 million in sales. EPS in FY10 stood at 13.4 sen.

As at end-October last year, HELP had cash and cash equivalents amounting to some RM60 million and no significant borrowings.

“With the investment in staff, facilities and the transitional period on student intakes, the directors expect the financial performance of the group to be satisfactory for FY12.

“The directors remain confident that the group is fundamentally strong and the initiatives taken during this capacity building phase will prepare us to position HELP as a global education provider of quality education. The group has a strong balance sheet and sufficient resources to expand its business,” HELP said.

HELP has been trending downwards in the past six months, falling from a high of RM2.54 to close at RM1.50 yesterday, inching up one sen.


This article appeared in The Edge Financial Daily, January 19, 2012.



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HELP International edges up on RM20m expansion plan

KUALA LUMPUR (Jan 19): Shares of HELP International Bhd chalked up small gains on Thursday after it announced plans to set up a private primary and secondary international school in Subang but concerns about the growing competition from other players restrained strong buying interest.

At 11.31am, it was up 2.0 sen to RM1.52 with 83,200 shares done.

HELP announced late Wednesday it was expanding its education business which would see it investing RM20 million to set up the school with the capacity for more than 3,000 students. The first phase will open in September 2012 with an initial intake of 500 to 600 students.

OSK Research said it lauded the move as part of management’s strategy to diversify away from its traditional stronghold in the tertiary education segment and to penetrate into the fast-growing private education sector.

However, it maintained its Neutral call for now as it remained wary of the potential equity dilution to fund the project.

“We are also cautious on the heightening competition as its bigger peers continue to expand aggressively as well as a possible downside risk to earnings as management ramps up its headcount after obtaining university status.

“Retain our FV at RM1.63 based on an unchanged 9.0 times FY12 PER plus its net cash per share of 42 sen as of 4QFY11,” OSK Research said.



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Stocks to watch: Hua Yang, HELP, Pantech, Country View

KUALA LUMPUR (Jan 19): Stocks which could see trading interest on Thursday include HUA YANG BHD [], HELP INTERNATIONAL CORPORATION [] Bhd, PANTECH GROUP HOLDINGS BHD [] and COUNTRY VIEW BHD [].

Hua Yang Bhd’s earnings jumped 90% to RM14.57 million in the third quarter ended Dec 31, 2011 from RM7.68 million a year ago underpinned by better sales of its homes. Its revenue rose 70.8% to RM84.25 million from RM49.30 million while earnings per share were 10.12 sen versus 5.33 sen.

HELP is expanding its education business to set up a private primary and secondary international school.

It is investing RM20 million to set up the school on a seven acre site in Subang with the capacity to cater for more than 3,000 students. The first phase will open in September 2012 with an initial intake of 500 to 600 students.

Steel pipes and fittings manufacturer Pantech posted net profit of RM10.34 million in the third quarter ended Nov 30, 2011, an increase of 69.5% from RM6.09 million a year ago.

Its revenue increased 49.3% to RM112.65 million from RM75.43 million. Earnings per share were 2.29 sen compared with 1.36 sen. It declared a special interim single tier dividend of 1.2 sen per 20 sen share.

Country View swung into the black for the financial year ended Nov 30, 2011, posting net profit of RM7.43 million compared with net loss of RM8.19 million in FY10, boosted by higher sales from its residential PROPERTIES [] and shop-offices.

Its revenue surged 314% to RM96.29 million from RM23.26 million. At the profit before tax level, it was RM11.50 million compared loss before tax of RM8.5 million.

In the fourth quarter ended Nov 30, 2011, it posted net profit of RM4.72 million compared with net loss of RM1.72 million a year ago.



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HELP International investing RM20m for international school

KUALA LUMPUR (Jan 18): HELP INTERNATIONAL CORPORATION [] Bhd is expanding its education business to set up a private primary and secondary international school.

It said on Wednesday it is investing RM20 million to set up the school on a seven acre site in Subang with the capacity to cater for more than 3,000 students.

The first phase will open in September 2012 with an initial intake of 500 to 600 students.

To recap, HELP said it had on Jan 16 received the Education Ministry’s approval to set a private international school within the vicinity of HELP University’s flagship green TECHNOLOGY [] campus in Subang 2.

HELP executive director Adam Chan said: “We aim to make this a model school and will look at other opportunities to expand within Malaysia and overseas.”



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HELP: Strong recovery in FY12, worst over

HELP International Corp’s 4QFY11 earnings and the full year ended Oct 31, 2011 were within our expectations. Full-year net profit of RM13.1 million was slightly below our forecast of RM13.6 million. The company posted a 32.6% year-on-year decline in pre-tax profit to RM5.3 million, while net profit fell 44.6% to RM3.6 million.

Still, it was a marked improvement over 3QFY11, when HELP posted a net profit of just RM820,000 as the seasonally weak quarter was compounded by RM5 million in one-off relocation costs associated with its new facility in Fraser Business Park, Kuala Lumpur. The city branch opened in May after several delays caused by late delivery of the premises.

For the full year, revenue increased marginally by 2.7% to RM108.1 million. Due to the sharp fall in earnings in 2HFY11, pre-tax fell by 23.6% to RM20.4 million while net profit was 31.6% lower at RM13.1 million.

HELP has been plagued with several problems this year, both locally and abroad. Apart from cost overruns associated with Fraser Business Park, the delayed opening has also resulted in missed opportunities for student intakes.

Although a positive move, the recent promotion of HELP from university college to full university status has also resulted in increased manpower costs as HELP had to hire more PhD holders and improve staff-student ratios.

Another issue the company faced was the Ministry of Higher Education’s directive for education institutes to streamline their twinning programmes. As a result, HELP’s twinning programmes were transferred from HELP University College to another subsidiary, HELP Academy. The move necessitated additional one-off licensing and promotion costs, including obtaining new KDN licences for marketing and to secure accreditation for National Higher Education Fund Corp (PTPTN) loans for students.

On the revenue side, HELP is seeing a decrease in student numbers from China as it has become more affordable for students from China to study in the UK and US due to the strength of the yuan and relaxation in regulatory restrictions in those countries.

Co-founder and president Datuk Paul Chan at HELP campus. The Fraser Business Park facility is fully operational.

Expect a strong recovery in FY12
We expect a strong recovery next year as the worst appears over after a series of negative events this year.

We expect net profit to jump 30.5% to RM27 million in FY12, but to remain relatively flat in FY13. HELP’s shares have fallen substantially after the two successive quarters of weak results. At RM1.71, its valuations are fair at 14.3 times for FY12.

We continue to like HELP’s strong business model and brand name, which has helped to expand its student population base, extend its presence overseas and increase the appeal of its own degrees. While the company’s earnings were affected in FY11 as it digested its expansion, the expansion plans are also central to its growth strategy. The company aims to grow its domestic student base from around 12,000 to 16,000 by 2016.

The domestic expansion will be anchored by two new branches, in Fraser Business Park and Subang 2. HELP will also widen its target market by increasing the levels of education and courses — from mainly tertiary to post-graduate, secondary schooling, certificate and vocational courses.

We understand plans to expand into secondary and primary schooling are nearing fruition, with HELP planning to establish an international school at its Subang 2 campus. Some 2ha of the 9ha will be carved out for the purpose. With higher fees, stronger margins and a much larger market base, this venture should improve HELP’s earnings prospects.

Positively, many of the issues involving Fraser Business Park (the delay in its opening), Vietnam (a change in government regulations) and local regulatory changes (the segregation between twinning and local courses), have also been largely resolved and should not affect the company next year.

However, the impact of some of these may also be structural, such as the lower number of students from China seeking education in Malaysia, as well as a higher overall cost base due to its university status and operating multiple campuses.

The Fraser Business Park facility is fully operational and has started student recruitment. The current student population here is 1,500 — mostly transferred from HELP-ICT in Klang. Management is seeing healthy intakes, especially for its American degree programme and is targeting to add another 1,000 students by end-2012.

HELP is leasing about 220,000 sq ft of space at a preferential rate there, which can accommodate up to 5,000 students. The branch will cater largely for post-graduate, technical and vocational courses, and will host a wide range of new courses such as culinary, hospitality, performing arts and physiotherapy, among others.

At the main Damansara Heights branch, HELP is expecting student growth of about 10%, as the company is seeing an increase in its own homegrown degrees compared with the traditionally more favoured twinning programs.

A potential risk is its foreign student base. HELP has seen many Chinese students opt to pursue their education directly in the US and UK due to the strong yuan. The recent weakening of the ringgit is positive, but it is unclear if the move by Chinese students is a structural one, given the country’s rising affluence.
Cautious of cost escalation going into FY14

On the cost side, expenses related to the Fraser Business Park facility have been fully expensed but personnel expenses could continue to rise due to HELP’s new full university status. Expenses would also rise towards the end of 2013 and into 2014 when HELP completes and shifts to the new full-fledged campus in Subang 2 by end-2013. This could dampen earnings in FY14 again.

In Vietnam, student intake has resumed after missing out on half a year’s enrolment in the first six months of the year. This followed the Vietnamese government’s more stringent checks on education players aimed at weeding out degree mills. Earlier this year, the Vietnamese government had stopped foreign players from enrolling students until they were audited and verified.

HELP’s degrees in Vietnam, which are undertaken by Vietnam National University, have been audited and approved, and the government lifted the moratorium in July. HELP is now targeting enrolments for MBA and post-graduate degrees there, which fetch higher margins, before preparing for the high volume but lower margin tertiary enrolments early next year.

In the past, there were 1,000 to 1,500 students studying for HELP degrees in Vietnam. The company hopes to rebuild these numbers.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.



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Marginal improvement for HELP International

HELP International Corp Bhd (Dec 27, RM1.64)
Maintain market perform at RM1.62 with fair value of RM1.80: Net profit for 4QFY11 ended October of RM3.6 million (-44.6% year-on-year [y-o-y], more than 100% quarter-on-quarter [q-o-q]) took FY11 earnings to RM13.1 million, a 31.6% decline y-o-y. This was above our expectations but slightly missed street estimates, coming in at only 91% of consensus. As expected, only a minimal full-year gross dividend per share of two sen was declared, as HELP continues to conserve its cash for the construction of its Subang 2 campus.

Revenue for 4QFY11 was up 18.7% q-o-q, mostly due to the higher student enrolment. Earnings before interest and tax (Ebit) margins improved to 19.5% during the quarter (from 4.6% in 3Q11), as HELP was no longer incurring campus relocation costs that dented earnings in 3Q11. The effective tax rate also declined to 31.9% during the quarter (from 70.1% in 3QFY11).

HELP is guiding for better earnings in FY12 as management expects an improvement in student enrolment and normalised operating costs. The key earnings driver in FY12 will be the full contribution from its Frasers Business Park facility. We expect HELP’s earnings to pick up from 2QFY12 onwards, as major intakes will be held from January to March 2012.

The risks include: (i) further regulatory changes; (ii) lower than expected student numbers; and (iii) a decline in demand for private higher education.
We have revised our revenue forecasts for FY12/FY13 by reducing our estimated fee growth assumption to 4.5% (from 8%) as we believe our previous estimates were too aggressive. However, we have increased our net earnings margins after factoring in a better utilisation rate at the Frasers Business Park branch. Overall, our FY12/FY13 earnings per share estimates are slightly reduced by 1.1% to 1.2% to 14.7 to16.1 sen (from 14.8 to 16.9 sen). We have also introduced our FY14 forecast.

As our FY12 forecast revisions were minor (-1.1%), we maintain our “market perform” call on HELP, with an unchanged fair value of RM1.80. We value HELP at 12 times FY12 earnings, after imputing a two times multiple discount to the market’s estimated price-earnings ratio of 14 times due to the stock’s thin trading volume (12-month average traded volume of 26,000 against SEG International Bhd’s 958,000 and Masterskill Education Group Bhd’s 2.4 million). — RHB Research, Dec 27


This article appeared in The Edge Financial Daily, December 28, 2011.



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KLCI closes higher ahead of extended weekend

KUALA LUMPUR (Dec 23): The FBM KLCI closed higher on Friday, in line with the generally positive sentiment at key Asian markets spurred by signals of some strengthening in the US economy as new claims for unemployment benefit dropped to their lowest in 3-1/2 years.

The 30-stock FBM KLCI rose 4.69 points to 1,496.15.

Gainers led losers by 413 to 292, while 343 counters traded unchanged. Volume was 942.51 million shares valued at RM886.66 million.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.37% to 18,629.17, Taiwan’s Taiex added 2.07% to 7,110.73, South Korea’s Kospi gained 1.07% to 1,867.22, the Shanghai Composite Index was up 0.85% to 2,204.78 and the Singapore Straits Times Index edged up 0.44% to 2,676.47.

Meanwhile, European stocks rose in early trade on Friday, extending the week's thin-volume, pre-holiday rally after reassuring US economic data in the previous session gave a short-term fillip to a market still overshadowed by the euro zone debt crisis, according to Reuters.

On Bursa Malaysia, BAT was the top gainer and rose RM1.32 to RM49.20; Lafarge Malayan Cement added 30 sen to RM6.90, Petronas Dagangan and Batu Kawan were up 28 sen each to RM17.30 and RM17.28, KLK 20 sen to RM22.20, Advanced Packaging 17 sen to RM1.35 and IJM Corp gained 16 sen to RM5.58.

Among the decliners, PPB fell 12 sen to RM16.98, Shell 11 sen to RM9.19, Tasco, Maybank and Kretam lost 10 sen each to RM1.55, RM8.35 and RM2.40 respectively, while SCGM, HELP, Sarawak Oil Palm fell nine sen each to 45 sen, RM1.62 and RM5.36 respectively, while JobStreet was down eight sen to RM2.22.

The actives included Sanichi, UEM Land, Perisai, Utopia, Astral Supreme and Envair.



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KLCI extends gains at mid-day as Asian markets rise

KUALA LUMPUR (Dec 23): The FBM KLCI extended its gains at the mid-day break on Friday, in line with its regional peers ahead of more economic data coming out from the US later today, as most global markets head for an extended weekend with the Christmas break.

At 12.30pm, the FBM KLCI was up 3.30 points to 1,494.76.

Gainers led losers by 304 to 279, while 320 counters traded unchanged. Volume was 451.74 million shares valued at RM363.87 million.

The ringgit strengthened 0.30% to 3.1565 versus the US dollar; crude palm oil futures for the third month delivery rose RM32 per tonne to RM3,129, crude oil was up 20 cents per barrel to US$99.73 and gold added US$4.75 an ounce to US$1,610.30.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.08% to 18.576.06, the Shanghai Composite Index gained 1.45% to 2,218.01, Taiwan’s Taiex added 2.14% to 7,115.13, South Korea’s Kospi rose 1.19% to 1,869.45 and Singapore’s Straits Times Index edged up 0.35% to 2,674.11.

On Bursa Malaysia, Nestle and BAT rose 30 sen each to RM56.90 and RM48.18, AIC was up 15 sen to RM1.30, MAHB 13 sen to RM5.59, while KLK, UMW, Esso, Genting and IJM rose 10 sen each to RM22.10, RM6.55, RM3.51, RM10.86 and RM5.52 respectively.

Among the decliners, Tasco, Shell and PPB fell 10 sen each to RM1.55, RM9.20 and RM17 respectively; HELP and Public Bank lost six sen each to RM1.65 and RM13.20, Huat Lai and WCT fell five sen each to RM2.30 and RM2.25, while Bina Goodyear was down 4.5 sen to 60 sen.

The actives included Perisai, Astral Supreme, Sanichi, UEM Land, Envair, KNM and Utopia.



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HELP International dips to 1-week low

HELP International Corp, a provider of higher education, fell to the lowest level in a week in Kuala Lumpur trading after fourth-quarter net income slid 45 per cent to RM3.6 million from a year earlier.

The stock declined 2.9 per cent to RM1.66 at 9:17 a.m. local time, set for its lowest close since Dec. 14. -- Bloomberg



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HELP retreats on weaker 4Q earnings

KUALA LUMPUR (Dec 23): HELP INTERNATIONAL CORPORATION [] Bhd shares retreated in early trade on Friday after its net profit for the fourth quarter ended Oct 31, 2011 fell 44.6% to RM3.59 million from RM6.47 million a year earlier, due to new student recruitment affected by delays in obtaining licences and approvals for operations.

At 9.20am, HELP fell five sen to RM1.66 with 2,000 shares traded.

Revenue for the quarter rose to RM28.44 million from RM27.33 million in 2010.

HELP had proposed a final gross dividend of two sen per share of 50 sen each, amounting to RM2.13 million for the financial year ending Oct 31, 2011.



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Stocks to watch: Muhibbah, Perisai Petroleum, MRCB, HELP, technology-related stocks

KUALA LUMPUR (Dec 22): Trading on Bursa Malaysia on Friday ahead of the extended weekend is likely to be cautious, given the muted reaction of regional markets on Thursday following the take-up of nearly 490 billion euros from the European Central Bank at its first-ever offer of three-year loans on Wednesday.

Although the FBM KLCI closed higher on Thursday, the broader market remained weaker with losers edging gainers, a trend that will likely be repeated on Friday.

Among the stocks that could be in focus today are Muhibbah Engineering Bhd, PERISAI PETROLEUM TEKNOLOGI BHD, MALAYSIAN RESOURCES CORPORATION BHD, HELP INTERNATIONAL CORPORATION BHD and TECHNOLOGY-related stocks.

Muhibbah Engineering Bhd and its Australian joint venture partner Monadelphous Group Limited have landed a RM1.05 billion (AUD330 million) job to build an approach jetty and ship berth in Queensland.

Muhibbah said on Thursday that Monadelphous Muhibbah Marine JV (MMM) had secured the contract to build the jetty and ship berth associated with the Wiggins Island Coal Export Terminal Pty Ltd’s (WICET) Project at Gladstone in Queensland.

MMM is a 50:50 joint venture between Muhibbah CONSTRUCTION [] Pty Ltd, a wholly owned subsidiary of Muhibbah in Australia and Monadelphous Engineering Pty Ltd, a wholly owned subsidiary of Monadelphous Group Ltd.

Perisai expects contribution from its mobile offshore production unit (MOPU), which it acquired through Garuda Energy (L) Ltd to be realised by FY12.

Its managing director Zainol Izzet Ishak said on Thursday that the acquisition would be finalised by the end of this year and will start contributing to the group's bottom line from the first day of its operation as the group's asset.

MRCB’s unit MRCB Engineering Sdn Bhd was awarded a RM13.93 million contract to upgrade the Sabah Employees Provident Fund (EPF) building in Kota Kinabalu.

HELP’s net profit for the fourth quarter ended Oct 31, 2011 fell 44.6% to RM3.59 million from RM6.47 million a year earlier, due to new student recruitment affected by delays in obtaining licences and approvals for operations.

Revenue for the quarter rose to RM28.44 million from RM27.33 million in 2010.

HELP proposed a final gross dividend of two sen per share of 50 sen each, amounting to RM2.13 million for the financial year ending Oct 31, 2011.

For the financial year ended Oct 31, HELP’s net profit fell 31.6% to RM13.06 million from RM19.1 million in 2010, on the back of increased revenue of RM108.06 million from RM105.2 million a year earlier.

Meanwhile, OSK Investment Research on Thursday upgraded the technology sector to Neutral and said that better HDD pricing could help mitigate losses from the Thailand flood.

It said that against the backdrop of the massive works in progress to restore operations following Thailand’s crippling floods, the worst could well be over.

The research said it had become less bearish on the hard-hit HDD components sector given the ongoing accelerated restoration as well as potential price hike over the immediate term, which could mitigate the earnings pressure from forgone capacity in the short term.

The research house upgraded Eng Teknologi and Notion Vtec from Sell to Neutral, and upped its recommendation on JCY International to Trading Buy from Sell.



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HELP 4Q net profit falls 44.6% to RM3.59m

KUALA LUMPUR (Dec 22): HELP INTERNATIONAL CORPORATION [] Bhd net profit for the fourth quarter ended Oct 31, 2011 fell 44.6% to RM3.59 million from RM6.47 million a year earlier, due to new student recruitment affected by delays in obtaining licences and approvals for operations.

Revenue for the quarter rose to RM28.44 million from RM27.33 million in 2010.

Earnings per share for the quarter fell to 2.50 sen from 4.60 sen in 2010, while net assets per share was 88 sen.

HELP proposed a final gross dividend of two sen per share of 50 sen each, amounting to RM2.13 million for the financial year ending Oct 31, 2011.

For the financial year ended Oct 31, HELP’s net profit fell 31.6% to RM13.06 million from RM19.1 million in 2010, on the back of increased revenue of RM108.06 million from RM105.2 million a year earlier.



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Help International to sell Bridge2Think shares

Help International Corp Bhd has entered into a share sale agreement with Management Circle Group AG, Switzerland, to dispose of a 19.1 per cent equity interest in Bridge2Think AG (B2T) for a cash consideration approximately RM1.721 million.

B2T is a global learning solutions group with operations in Australia, Germany and the United Kingdom with its headquarters in Basel, Switzerland.

In a filing to Bursa Malaysia today, the company said the European services sector was expected to be more competitive in the future and the company felt the offer made by Management Circle Group AG was of reasonable value.

HELP would realise a 23 per cent gain upon completion of the disposal of B2T and would use the proceeds to focus more on investment opportunities in the Asia region. -- Bernama



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HELP expecting a better quarter

HELP International Corp Bhd (Dec 16, RM1.71)

Maintain market perform at RM1.71 with a fair value of RM1.80: HELP is due to release 4QFY11 ended October results on Thursday. We are expecting 4Q11 net profit of RM2 million, a sequential improvement given: (i) historical trends (HELP’s 4Q results tend to be stronger than 3Q); and (ii) 3Q11 earnings were affected by low student numbers and a material one-off relocation cost from Klang to Fraser Business Park (FBP), resulting in net profit declining to only RM245,000 for the period (2Q11:RM6.5 million, 3Q10:RM3.2 million). Earnings before interest, tax, depreciation and amortisation (Ebitda) margin for 4Q11 is likely to improve to around 20% to 25%, after declining to a dismal 4.6% in 3Q11. Full-year dividend is anticipated to be minimal, as HELP is conserving its cash for the construction of its Subang 2 campus.

Although HELP’s revenue has grown marginally year-on-year, this increase has been offset by the higher operating expenses incurred during the year, hence HELP’s FY11 net earnings will likely be lower than FY10 net earnings of RM19.1 million. However, we believe that net earnings will improve in FY12 as HELP will no longer be incurring exceptional costs in relation to the FBP branch.

The key earnings driver for HELP in FY12 will be the contribution from its FBP facility. The full contribution from the branch will be seen in FY12, after the setbacks experienced in FY11. The management is guiding for up to 1,000 new students for the facility in FY12, an almost 10% increase on HELP’s current total student numbers. We expect earnings to pick up from 2QFY12 onwards, as HELP’s major intakes will be from January to March 2012.


The risks include: (i) further regulatory changes; (ii) lower than expected student numbers; and (iii) decline in the demand for private higher education.

We are maintaining our earnings forecasts pending the release of the 4QFY11 results.

We maintain our “market perform” call on HELP (after upgrading the stock from “underperform” on Dec 1), with an unchanged fair value of RM1.80. We value HELP at 12 times FY12 earnings, after imputing a two times discount to the market’s estimated price-earnings ratio of 14 times due to the stock’s thin trading volume (12-month average traded volume of 26,000, against SEG International Bhd’s 958,000 and Masterskill Education Group Bhd’s 2.4 million). — RHB Research, Dec 16


This article appeared in The Edge Financial Daily, December 19, 2011.



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KLCI closes higher but gains limited on cautious sentiment

KUALA LUMPUR (Dec 5): The FBM KLCI rose marginally higher on Monday as Asian markets closed mixed, with sentiment lifted by Italy's unveiling of austerity steps, and expectations Ireland will do the same in a new budget to be announced later in the day.

World stocks and demand for German government bonds rose on Monday as confidence grew European leaders would make big strides in solving the euro zone's debt crisis at a crucial summit this week, according to Reuters.

The FBM KLCI gained 0.93 point to close at 1,489.95.

Gainers led losers by 407 to 337, while 303 counters traded unchanged. Volume was 2.33 billion shares valued at RM1.33 billion.

At the regional markets, Hong Kong’s Hang Seng Index gained 0.73% to 19,179.69, Japan’s Nikkei 225 added 0.60% to 8,695.98 and South Korea’s Kospi rose 0.36% to 1,922.90.

Meanwhile, the Shanghai Composite Index fell 1.16% to 2,333.23, Taiwan’s Taiex lost 0.60% to 7,098.08 and Singapore’s Straits Times Index shed 0.26% to 2,766.23.

On Bursa Malaysia, shares of automotive players PROTON HOLDINGS BHD [] and DRB-HICOM BHD [] rose after the Edge weekly reported that state investment arm Khazanah Nasional Bhd was likely to ask for proposals from interested parties for its stake in the carmaker.

Citing industry sources, the Edge said Khazanah had made overtures and put out feelers to the market, seeking proposals from existing car players on a business plan with regard to Proton.

Khazanah is the largest shareholder in the national car company with a 42.74% stake.

Proton was up 89 sen to RM4.50 while DRB-Hicom added 20 sen to RM2.20.

Other gainers included BAT that rose RM1 to RM48.10, Nestle 60 sen to RM53.20, CBIP 28 sen to RM4.63, United PLANTATION []s and Toyo Ink 26 sen each to RM18.36 and RM1.86, Tradewinds Plantations 25 sen to RM4.42 and Batu Kawan 22 sen to RM17.10.

Among the losers, IJM Corp fell 21 sen to RM5.57, Manulife 19 sen to RM2.90, HELP and Parkson 16 sen each to RM1.62 and RM5.68, Sime 14 sen to RM8.98, Petronas Dagangan 10 sen to RM17.20, Bursa and MAHB nine sen each to RM6.60 and RM6.06, while RHB Capital lost eight sen to RM7.35.

The actives included Proton, Sanichi, DRB-Hicom, Compugates and DPS Resources.


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KLCI slips at mid-day as Asian markets tread cautiously

KUALA LUMPUR (Dec 5): The FBM KLCI slipped at the mid-day break on Monday, in line with the cautious sentiment at most key regional markets that are awaiting for the outcome of a crucial European leaders’ summit later in the week.

The FBM KLCI slipped 0.16 point to 1,488.86 at the mid-day break, weighed by losses at select blue chips.

Gainers led losers by 298 to 290, while 287 counters traded unchanged. Volume was 1.3 billion shares valued at RM634.95 million.

The ringgit weakened 0.40% to 3.1391 versus the US dollar; crude palm oil futures for the third month delivery rose RM41 per tonne to RM3,101, crude oil rose 51 cents to US$101.47 per barrel while gold edged up two cents an ounce to US$1,746.77.

Asian markets were mixed after the HSBC Purchasing Managers' Index for China's services sector fell to 52.5 from 54.1 in November, its slowest rate of growth in three months.

At the regional markers, Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index each rose 39% to 8,677.61 and 19,114.78 respectively, and South Korea’s Kospi edged up 0.02% to 1,916.46.

Meanwhile, the Shanghai Composite Index fell 0.63% to 2,345.78, Taiwan’s Taiex lost 0.39% to 7,112.67 and Singapore’s Straits Times Index shed 0.33% to 2,764.25.

Among the decliners on Bursa Malaysia this morning, IJM Corp fell 17 sen to RM5.61, Sime Darby 13 sen to RM8.99, Asas 12 sen to 98 sen, Parkson 11 sen to RM5.73, Petronas Dagangan 10 sen to RM17.20, AIC nine sen to RM1.11 while HELP and OCB lost eight sen each to RM1.70 and 47 sen.

Proton was the top gainer and surged 98 sen to RM4.59 with 14.45 million shares done.

The national carmakers shares were actively traded on Monday after the Edge weekly reported that state investment arm Khazanah Nasional Bhd was likely to ask for proposals from interested parties for its stake in the carmaker.

Citing industry sources, the Edge said Khazanah had made overtures and put out feelers to the market, seeking proposals from existing car players on a business plan with regard to Proton.

Khazanah is the largest shareholder in the national car company with a 42.74% stake.

Other gainers included BAT that rose 72 sen to RM47.82, Nestle 60 sen to RM53.20, United PLANTATION []s and Toyo Ink 30 sen each to RM18.40 and RM1.90, Tradewinds Plantations 26 sen to RM4.43 while KLK added 20 sen to RM22.

The actively traded counters this morning included Proton’s securities, Compugates, DPS Resources and Sanichi.



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