OVERSEAS EDUCATION LIMITED
RQ1.SI
Overseas Education Limited - Ceasing Coverage
- Overseas Education continues to underperform, in line with the muted growth numbers of expatriates. Total registration fees for 9M17 continue to be on a declining trend.
- Due to low institutional interest and trading liquidity, we are ceasing coverage on Overseas Education. Our last recommendation was a SELL, with TP of SGD0.36.
Challenging for foreign system schools.
- The operating environment for foreign system schools in Singapore continues to be challenging, on the back of a tepid economy and muted growth in expatriate arrivals.
- Based on Ministry of Manpower statistics, the number of employee pass holders was on a slight decline, as at Jun 2017. The vacancy rates in some of the better schools are also rising. Overseas Education’s premises at Pasir Ris put it at a disadvantage when competing with better schools.
- Given that Singapore’s GDP is growing at low single digits, we do not think the growth in the number of expatriates in Singapore would change significantly in the near term. As such, we think there are limited catalysts to drive higher earnings growth in the foreseeable time line.
Juliana Cai
RHB Invest
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http://www.rhbinvest.com.sg/
2017-12-27
RHB Invest
SGX Stock
Analyst Report
0.360
Same
0.360
