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This article first appeared in The Edge Financial Daily on May 18, 2018

Prestariang Bhd
(May 17, RM1.32)
Maintain outperform with a target price (TP) of RM1.39:
We attended Prestariang Bhd’s analyst briefing on Wednesday and came away with some guidance on the company’s direction going forward. Despite the uncertainties surrounding the concession contract due to the recent change of ruling government, management said that it is fully committed to the Sistem Keselamatan Imigresen Nasional (SKIN) project. Going forward, it will focus on execution, while also consolidating and streamlining its operations. We reaffirm our sum-of-parts-based “outperform” call with an unchanged TP of RM1.39.

 

The construction of the SKIN project officially commenced on April 25, 2018. It is currently at the design stage, which will take about six months. The next stage will be setting up of the data centre, which is then expected to see hardware deployment by October. To fully participate in the SKIN project, the immigration department has assigned 60 officials to Prestariang’s office for its involvement with the project in various aspects.

 

The education arm has been bleeding since 2013 as it has failed to secure a sizeable enough number of students for its courses. Management said it is looking at various solutions or industry partners to help turn around the education segment. For the first quarter of financial year 2018, it registered similar losses of RM1.4 million.

In contrast to the previous “asset-light” business model, management plans to expand its assets to scale its business and bring in more recurring income to the company. — PublicInvest Research, May 17

 

 

 

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