Monday, November 21, 2011

Masterskill slips in early trade on weaker 3Q earnings

KUALA LUMPUR (Nov 21): Masterskill Education Group Bhd (MEGB) shares fell in early trade on Monday after its net profit for the third quarter ended Sept 30, 2011 fell 78.8% to RM5.55 million from RM26.18 million a year earlier, due mainly to lower student enrolment and higher overheads.

At 9.30am, MEGB fell four sen to RM1.16 with 429,100 shares traded.

MEGB said on Nov 18 that its revenue for the quarter fell to RM61.19 million from RM80.68 million in 2010.

Earnings per share fell to 1.00 sen from 9.00 sen a year earlier, while net assets per share was RM1.31.

For the nine months ended Sept 30, MEGB's net profit fell to RM39.72 million from RM75.29 million in 2010, on the back of a dip in revenue to RM200.67 million from RM234.83 million.

RHB Research maintained its Underperform call on Masterskill with an unchanged fair value of RM1.05, based on a target FY12 PER of 8.5x.

The research house MEGB's lower earnings trend will continue into 1H12 as MEGB continues to incur higher operating costs in line with its expansion.

'Although MEGB should not be affected by the recent proposed changes to the PTPTN loans, with around 96% students taking the loans, MEGB is susceptible to future changes in the loans.

'Furthermore, MEGB's high foreign shareholding of 46.4% continues to expose the company to volatile portfolio flows,' it said in a note Nov 21.


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