Masterskill, Fair Value/Target Price Compilation & Dividend Yield


Masterskill Education Group Berhad (MEGB, 5166) was incorporated in1997. It was listed in Bursa Malaysia Main Market on 18th May 2010 at an IPO price of RM3.80. The shares price drop to below RM1.70 in March 2011 due to heavy share disposal by their foreign investor.

Regardless, on why foreign investors decided to dispose their shares, MEGB has a recession proof business with a good growth prospect.

They are going to pay good dividend yield too. In the IPO prospectus, MEGB specify that they intend to pay in between 50% to 60% from net profit as dividend. For financial year end 31st December 2010, they keep their promise and pay 60% of net profit as dividend. This translate to 14.9 sen & dividend yield of 7.2 %. This clearly more than double of current fixed deposit rate. Share price recover improve after 2010 final dividend announcement.

There are a few research house make buy recommendation for MEGB. The table below are the latest fair value or target price.

Research House Target Price (RM)
Alliance 2.60
CIMB 4.48
OSK Research 3.44

The table below is the financial summary of MEGB for the past 3 years.

2008 2009 2010
Revenue (‘000) 202,884 273,385 315,736
Net Profit (‘000) 72,070 97,382 102,143
PE Ratio (x)# 21.61 16.00 8.31
EPS (sen) 17.56 23.8 24.9
Dividend (sen) N/A N/A 14.9
Dividend Yield (%) * N/A N/A 7.20

*Based on price on last trading day of the year
#Based on IPO price

On 21st April 2011, MEGB share prices close at RM2.12.

On 30th March 2011, MEGB declared 7.9 sen final dividend with an ex-date  of 12th May 2011. At last trading price, the dividend yield for 2010 is 7%.

MEGB is a leading operator in Nursing and Allied Health education in Malaysia, principally engaged in the provision of higher education and training.

Among the key highlights from MEGB are,

  • Steady cash flow
  • Lower PE Ration when compare to peers. SEGi trading at 20 times while HELP trading at 12 times.
  • Recession proof business with a good growth prospect.
  • Approved to set up new campuses in Kuching and Seri Alam, Johor.
  • Venturing to Indonesia and recently buy a stake in Indonesia’s Mayapada Hospital

Leave a Comment

  • kampunginvestor 26th April, 2011, 10:01 am

    Lately this counter is very hot. I missed the boat on this and hope will have a second chance. This counter is financailly sound but just do not know why it has been falling from sky high till now.

  • klse888 26th April, 2011, 4:42 pm

    yes, MEGB is a great counter… i had earned 30% in just 1 months time (recorded under my MEGB label/tag).

    After I achieved my GENS profit target, i shall seriously consider switching back to this darling…

  • 27th April, 2011, 10:19 am

    It is due to heavy selling by foreign investor. I manage to buy