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

Friday, January 10, 2014

Prestariang (PRESBHD) update

CIMB investment bank published a report, Training for a Major Leap yesterday about Prestariang Berhad. There were few positive updates from the CEO too.

1) The existing oil & gas school is already operating at full capacity. The group is seriously looking to scale up the oil & gas training business which is another good engine growth. Currently training 240 students with RM13k per students which is equal to around RM3 million revenue. This speaks the attractiveness about the education industry in terms of revenue and profit margin.

2) The group finalised its new distribution terms with Autodesk. Thus, the group able to distribute the software to private sector as previously the group only able to deal with public higher education institutions. This will be another positive earnings transparency as the management is looking to double the size of the business to RM60m in 2-3 years' time. The gross margin of software licensing is believed to be around 5-30%. 

3) Jan student intake for UniMy was strong but did not disclose any enrolment numbers. The management target to breakeven in FY2014. This is good as the group spent around RM6 mil in FY2013 for administration purpose. This will improve the bottom line of the group's financial next year.

4) Else way, the group also looking at regional expansion which have synergies with its core business. Well, this is a long term plan. Nothing much to talk about at this term.
    In short, everything seems to be going well for Prestariang. Good company with room for growth. The price may be little bit high now but the price will probably increases along with the result in future. Waiting opportunity to further invest into it.

    In separate note, I invested a small portion in Dutch Lady yesterday as things are looking good in Dutch Lady. This stock will serves as my dividend stock. In fact, all my holdings except Scientex give me a dividend yield of >5% to meet one of my targets to achieve certain passive income from the dividends. 

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