Masterskill Education Group Bhd CEO Datuk Seri Edmund Santhara is an avid chess player. And like a game of chess, yesterday’s announcement of Masterskill’s venture into Indonesia is the latest in a series of strategic moves after two earlier major “checkmates” — the threat of lower PTPTN (National Higher Education Fund Corp) funding and persistent selling of its shares by foreign portfolio funds.
Of the two checkmates, analysts believe concerns over the large PTPTN deficit are overblown. Masterskill is appealing against PTPTN’s new ruling that caps loans at RM45,000 for new courses. Analysts believe that the new loan ruling, if implemented, would still cover more than 75% of a typical tertiary course.
Analysts also note that the government was unlikely to stop funding the programme, which was an important initiative to help students finance their higher education. Rather, they note that the fund will tighten the debt collection process.
The other setback was the persistent selling of Masterskill’s shares by two US-based portfolio funds — Smallcap World Fund Inc and Fidelity Management and Research LLC. On a positive note, the selling appears to have ended, given the large amount of shares traded since they ceased to be substantial shareholders in mid-February this year.
Indeed, Masterskill’s stock has rebounded by 36.5% to RM2.28 yesterday, from its mid-March low of RM1.67. Apart from the likely end of foreign selling, there was also positive news flow, including results for 2010 that met analysts’ expectations, generous dividends and the latest Indonesian venture.
The company’s full-year net profit for 2010 rose to RM102.1 million from RM97.4 million, after which it declared a final single-tier dividend of 7.9 sen.
Total single-tier dividends of 14.9 sen for 2010 gave the stock a high net dividend yield of 6.5%.
The latest positive move involves its venture into Indonesia, confirming The Edge Financial Daily’s earlier report on April 7, 2011.
Yesterday, Masterskill announced that it has entered into an MoU with PT Sejahteraraya Anugrahjaya Tbk (PTSA) to develop academic exchange and cooperation in the teaching and training of Masterskill students at the Mayapada Hospital owned by PTSA.
More significantly, the MoU involves forming a joint venture to establish Universitas Masterskill-Mayapada in Indonesia. It added that the university will offer programmes in nursing and allied health education, similar to those offered by Masterskill in Malaysia. This follows an earlier subscription by Masterskill in PTSA’s IPO.
The move into Indonesia will boost Masterskill’s geographical base, which is critical as the company has a relatively narrow, specialised product base.
Indeed, analysts say one major disadvantage that Masterskill has compared with other education peers such as HELP International Corp Bhd and SEG International Bhd is its narrow focus on nursing and healthcare-related courses. The other two listed colleges offer a wider choice of courses, catering for a broader spectrum of society.
An analyst notes that there will come a time when the Malaysian market, with its small population of about 28 million, will become saturated with nurses and healthcare personnel. Masterskill will have to either expand its product offering or market reach.
Given that its niche and branding is largely in healthcare and nursing education, going into new markets will be a better near-term strategy, analysts say, although it can expand into other healthcare-related courses.
Indonesia, with its 230 million population, annual GDP growth of over 5% and a rising middle class, serves as a good diversification platform for Masterskill.
Indeed, Malaysia’s small size does have limitations. Even HELP, which is already diversifying its courses and market reach locally, is expanding abroad — to Indonesia, Vietnam, China and elsewhere — mostly through twinning affiliations with small local colleges. Masterskill’s setting up of a full-fledged university is on a far more ambitious scale, and is a calculated strategic move by Santhara.
Many Malaysian companies have made it big in Indonesia, especially those in the banking and finance, plantations and telecommunications sectors. Only time will tell if Masterskill will be the next success story there.
This article appeared in The Edge Financial Daily, April 14, 2011.
Friday, April 15, 2011
Thursday, April 14, 2011
MEGB set up facility in Indonesia
PETALING JAYA: Masterskill Education Group Bhd, the operator of Masterskill University College of Health Sciences, intends to open a campus in Indonesia soon in a move to diversify geographically, sources said.
The education group will form a joint venture with Indonesia-based hospital owner PT Sejahteraraya Anugrahjaya (PTSA) for the venture, according to sources.
Under the plan, which is in its preliminary stages, the new campus would be able to enrol about 20,000 students for each semester, said sources.
Should the plan materialise, it would be a big boost to Masterskill in terms of student count and earnings. The group currently has about 18,400 students.
This comes hot on the heels of the group’s announcement on Tuesday that it had entered into a share subscription agreement to buy US$1 million (RM3.02 million) of new shares in Indonesia-based hospital owner PT Surya Cipta Inti Cemerlang, which will be listed on the Jakarta Stock Exchange on Monday.
PT Surya Cipta Inti Cemerlang is the controlling shareholder of PTSA, which owns and operates the Mayapada Hospital in Tangerang, near Jakarta. The former announced an IPO in January to raise fresh capital for expansion.
In its announcement, Masterskill said the share acquisition would enable the group to establish clinical training collaboration with Mayapada Hospital to allow the former’s students to comply with their academic requirements.
“We view the tie-up as a pioneer move for Masterskill to attract the foreign students, especially from Indonesia. The foreign students would be able to seek a career placement, apart from practical training, in Mayapada hospital through this strategic investment,” said Alliance Research.
Analysts said a venture into highly populated Indonesia, whose economy was on the growth path, was a good move as the demand for healthcare and healthcare practitioners was expected to be much bigger than at home.
“Whether private or public hospitals, the demand for healthcare will increase in tandem with the country’s economic growth as the standard of living improves,” said an analyst.
Masterskill has seen some negative news flow recently. The stock was hammered by heavy foreign selling and the group was hit hard by concerns over Perbadanan Tabung Pendidikan Tinggi Nasional’s (PTPTN) RM46 billion deficit.
The deficit raised worries that PTPTN would be more careful in granting student loans going forward. Masterskill was seen as the key victim because 90% of its students are financed by PTPTN loans.
Management is currently appealing against PTPTN’s new ruling that caps loans at RM45,000 for new courses.
Analysts believe that the new loan ruling, if implemented, would cover more than 75% of a typical tertiary course. An analyst noted that the government was unlikely to stop funding the programme, which was an important initiative to help students finance their higher education.
Nonetheless, the stock price rose to RM2.32, up 18 sen or 8.4% yesterday. It has rebounded 40% in the past three weeks from the all-time low of RM1.67. Despite the recent rebound, Masterskill is trading at just half of its all-time high of RM4.30 and 40% below its IPO price of RM3.80.
For FY10 ended Dec 31, revenue expanded to RM315.7 million from RM273.4 million previously. Net profit rose to RM102.1 million from RM97.4 million the year before.
This article appeared in The Edge Financial Daily, April 7, 2011.
The education group will form a joint venture with Indonesia-based hospital owner PT Sejahteraraya Anugrahjaya (PTSA) for the venture, according to sources.
Under the plan, which is in its preliminary stages, the new campus would be able to enrol about 20,000 students for each semester, said sources.
Should the plan materialise, it would be a big boost to Masterskill in terms of student count and earnings. The group currently has about 18,400 students.
This comes hot on the heels of the group’s announcement on Tuesday that it had entered into a share subscription agreement to buy US$1 million (RM3.02 million) of new shares in Indonesia-based hospital owner PT Surya Cipta Inti Cemerlang, which will be listed on the Jakarta Stock Exchange on Monday.
PT Surya Cipta Inti Cemerlang is the controlling shareholder of PTSA, which owns and operates the Mayapada Hospital in Tangerang, near Jakarta. The former announced an IPO in January to raise fresh capital for expansion.
In its announcement, Masterskill said the share acquisition would enable the group to establish clinical training collaboration with Mayapada Hospital to allow the former’s students to comply with their academic requirements.
“We view the tie-up as a pioneer move for Masterskill to attract the foreign students, especially from Indonesia. The foreign students would be able to seek a career placement, apart from practical training, in Mayapada hospital through this strategic investment,” said Alliance Research.
Analysts said a venture into highly populated Indonesia, whose economy was on the growth path, was a good move as the demand for healthcare and healthcare practitioners was expected to be much bigger than at home.
“Whether private or public hospitals, the demand for healthcare will increase in tandem with the country’s economic growth as the standard of living improves,” said an analyst.
Masterskill has seen some negative news flow recently. The stock was hammered by heavy foreign selling and the group was hit hard by concerns over Perbadanan Tabung Pendidikan Tinggi Nasional’s (PTPTN) RM46 billion deficit.
The deficit raised worries that PTPTN would be more careful in granting student loans going forward. Masterskill was seen as the key victim because 90% of its students are financed by PTPTN loans.
Management is currently appealing against PTPTN’s new ruling that caps loans at RM45,000 for new courses.
Analysts believe that the new loan ruling, if implemented, would cover more than 75% of a typical tertiary course. An analyst noted that the government was unlikely to stop funding the programme, which was an important initiative to help students finance their higher education.
Nonetheless, the stock price rose to RM2.32, up 18 sen or 8.4% yesterday. It has rebounded 40% in the past three weeks from the all-time low of RM1.67. Despite the recent rebound, Masterskill is trading at just half of its all-time high of RM4.30 and 40% below its IPO price of RM3.80.
For FY10 ended Dec 31, revenue expanded to RM315.7 million from RM273.4 million previously. Net profit rose to RM102.1 million from RM97.4 million the year before.
This article appeared in The Edge Financial Daily, April 7, 2011.
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