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[January 09, 2014]
Analysts bullish on Prestariang O&G training business [New Straits Time (Malaysia)]
(New Straits Time (Malaysia) Via Acquire Media NewsEdge) KUALA LUMPUR: Analysts are bullish on Prestariang Bhd's recent venture into the oil and gas training business.
They said the new business would be the main earnings growth driver for the information, technology and communications (ICT) training firm over the next few years.
In its research report, CIMB Investment said investors should remain invested in the stock as the long-term growth outlook is exciting, thanks to its recent venture in the oil and gas training business.
"With HELP International likely to be taken private, there are limited options for investors looking for stocks in the education sector other than Prestariang.
"This could mean that investors will focus more on Prestariang for exposure to the education sector," the bank said, giving the stock a target price of RM3.51.
CIMB said Prestariang's bullishness on its new oil and gas ICT training venture was evident during its corporate day, where there is strong demand for this business over the next few years.
"We maintain our earnings per share forecasts but raise target price as our sector price/earnings has risen to 14 times 2015 from 12.5 times previously." The higher price/earnings rating also reflects a scarcity premium as private higher education stock HELP is likely to be taken private soon. Prestariang remains our top small-cap pick, CIMB added.
Its forecasts, however, do not incorporate any earnings from the expansion plans for this business.
The expansion of this business in the region is long-term positive for the company but it is not expected to make significant immediate or medium-term contributions.
Prestariang participated in CIMB's Malaysia Corporate Day conference yesterday, meeting fund managers in a few small group meetings.
CIMB said there were a few positive surprises from the presentations, where the company is seriously looking at scaling up its oil and gas training business as the existing school is operating at full capacity.
It is looking to set up a new oil and gas training school in Johor, probably sometime this year.
Prestariang is now the master distributor for Autodesk software for the education and oil and gas sector.
It is looking at acquiring regional businesses which have synergies with its current core business.
The company has already hired a consultant to search for opportunities in the region.
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