KUCHING: Prestariang Bhd (Pestariang) has added valuation appeal to its fundamentals and stock via the oncoming launch of a new information technology (IT) university, named University Malaysia of Computer Science & Engineering, at the end of this month.
The January 31 launch was scheduled to be held at the university’s temporary campus at the Mahindra Satyam Malaysia Global Centre in Cyberjaya with a target maiden intake of 300 students to commence classes in April, to be followed by another intake in September.
OSK Research Sdn Bhd (OSK Research) stated, “Assuming an average annual tuition fee of RM30,000 per student, we expect the university to contribute RM1.3 million to Prestariang’s bottom line for FY13 (financial year 2013).
“We estimate that at the full capacity of 3,000 students, this could potentially translate into core earnings of RM15 million to RM20 million annually.”
The research house also highlighted that the company was also in the midst of talks with top oil and gas (O&G) companies in relation to the provision of industry-related training.
“Prestariang recently secured a RM4.8 million contract from the Ministry of Finance to provide O&G training to 360 students for a period of three months. This foray into O&G-related training has encouraged the group to take more steps forward.
“According to our estimates, this contract works out to RM13,000 per student, which we deem highly profitable due to the light opex and short term nature of such programmes.
“We gather that management is now in talks with a few big O&G companies in relation to offering Auto-Desk software and professional training programmes.
“Now that the new university is ready to take off while management actively explores other O&G training opportunities, we continue to see potential in the company, especially in view of its appealing valuation.”
As it did not expect major surprises in the upcoming fourth quarter FY12 results due for release in mid-February, it maintained the stock’s fair value at RM2.15 per share, based on 10 times FY13 price earnings ratio.