Stock Name: Raffles Edu
Company Name: RAFFLES EDUCATION CORP LTD
DBS Vickers Securities in a June 27 research report says: "Raffles Ed has entered into a Sales & Purchase agreement to sell 50% of a subsidiary, Value Vantage Pte Ltd, for S$46m. We understand that the sale will have no impact on its NES education operations in Shanghai, China.
"We are not surprised by this move and view this as mildly positive, as management has previously indicated its desire to "unlock" the value of its real estate to complement its anemic education business growth. We trimmed our forecasts by c.11-12% to factor in FX losses in FY11F and lower enrollment arising from the fall in Gao Kao takers in FY12/13F.
"Consequently, our SOP-based target price is lowered marginally to 52 cents (58 cents previously). After c.30% decline in share price post its dismal 3Q results, the counter now looks oversold at 0.7x P/BV. UPGRADE TO HOLD."
Company Name: RAFFLES EDUCATION CORP LTD
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 0.52 |
DBS Vickers Securities in a June 27 research report says: "Raffles Ed has entered into a Sales & Purchase agreement to sell 50% of a subsidiary, Value Vantage Pte Ltd, for S$46m. We understand that the sale will have no impact on its NES education operations in Shanghai, China.
"We are not surprised by this move and view this as mildly positive, as management has previously indicated its desire to "unlock" the value of its real estate to complement its anemic education business growth. We trimmed our forecasts by c.11-12% to factor in FX losses in FY11F and lower enrollment arising from the fall in Gao Kao takers in FY12/13F.
"Consequently, our SOP-based target price is lowered marginally to 52 cents (58 cents previously). After c.30% decline in share price post its dismal 3Q results, the counter now looks oversold at 0.7x P/BV. UPGRADE TO HOLD."
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