Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria.

Sunday, January 6, 2013

~ Prestariang 柏斯達亮 (PRESBHD) AnAlysIs ~

The first time I came to know Prestariang was during his IPO launching back to July 2011. When I glance at its business portfolio, my first impression was it's a boring business nature. However as time goes by, it proves that boring is a very good investment. 

Prestariang's 2 main core business activites are ICT training & Certification and Software Licence Distribution & Management. 

For the training segment, Prestariang provide both basic and professional Information Communications Technology (ICT) training and certification examination at the end of the course while software licence distribution segment is just a follow up to distribute and manage the product licences. 

In simple term, Prestariang offers clients/companies a one stop package that provides training, certified them and also get paid for the product licences. That is. Their business plan is just that simple to understand which I clarified them as boring last time Haha. So, I missed out a good company. 

Looking back at its past 3 years result, revenue, profits and earning per share are nothing but just keep increasing. That shows how good its profit stability. 

For the 9-months FY12 period, it records an EPS of 12.22 cents, expect it can achieves a full year EPS of 16 cents. Base on today price of RM1.13, its PE ratio is around 7. Profit margin is exceptionally high in the region of 25-30%. ROE is also high due to its low net asset per share. 

As of its balance sheet, the RM35m cash in hands should be more than enough to cover its borrowings of RM2m. Current ratio is high at 4.8 which demonstrates its good liquidity. The total of retained profits and share premium are triple of the share capital, thus it's mathematically able to issue bonus share to increase the share market liquidity as its net asset per share is higher than its share par value. 

Portions of the cash in hands come from the IPO listing. The utilisation of IPO proceeds is only 50% of the RM19m it raised through IPO. As of its high cash in hands and retained profits, it should have no problem to gather money for expansion expenditures. Currently, Prestariang is in the midst of setting up its first computing university in Malaysia marking the first in Malaysia to offer higher education on specific ICT fields to have a sustainable future other than its 2 core business segments. 

Apart from that, the other thing I like the most of Prestariang is its generous dividend payout. It does not have any dividend policy currently, but it declared more than 50% of its net profit for dividend. For the cumulative Q312, it had declared a total of 7cents dividend. Expected there is another dividend payout for its Q412 in the region of 2-3 cents which translated into dividend yield of 7-8% based on today price RM1.13. To make it more exaggerating,it paid the dividend every quarters. It's so nice for you to receive a passive income every 3 months. 

Majority of the contracts being award to Prestariang are from government. It also starts to develop its own training and certification programme to cater international demand. One of it is the IC Citizen programme that able achieved sale at Brunei and also in middle east countries. 

Its CEO, Dr Abu Hasan Ismail who holds numerous academic certification is also the founder of Prestariang Berhad. He has great exposure to ICT development and teaching. Besides that, he was one of the founders of Multimedia University. As for the Chairman, Dato Mohamed Yunus Ramli Bin Abbas, this CV even longer. He had 25 years service at Motorola, executive officer for Encorp Group (Encorp Media, NTV7) before became the CEO for Celcom Berhad. He also established NuSura Technologies and is now the executive director of it. Besides, he also holds numerous chairman position at different government bodies. I believe these two gentlemen will even help Prestariang secures more contracts from the government. 

Now, lets take a look at the list of top 30 shareholders of Prestariang as at May 2012 ... 

Do you spot anything on it? Do you see there is quite a number of unit trust and funds in the top 30 shareholders? Seem like the unit trust and fund managers have great confidence on Prestariang. 

So, if you're investing your money on above stated unit trusts or funds, why not directly invest in Prestaring at the stock exchange? As you can get around 8% dividend yield instead of paying 3-5% service charge and 1.5% management fees when you investing in unit trust?

You know the calculation

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