Prestariang, Potential >10% Dividend Yield for the Next 2 Years



Prestariang Berhad

Prestariang Berhad (PRESBHD, 5204) was incorporated in 2003 as an Information and Communication Technology Services company, focussing on professional training and certification.

Currently, it offers 40 certification courses from various technology and software vendors and organizations, including Microsoft, IBM, Oracle, CompTIA, Autodesk, EC-Council, Adobe and others.

Prestariang was listed on Bursa Malaysia’s Main Market on 27th July 2011 win an IPO price of 90 sen. Unfortunately, due to listing timing, the share price performed badly since the listing day. The price drop to lowest of 47.5 sen on 19th September. It was close at 55.5 sen on 5th October.

The management has set a dividend policy of up to 50% for the next 3 years. Based on forecast earnings by OSK Research, it translates into a lucrative dividend yield of >10% for both FY11 and FY12 given the recent weakness in the share price. OSK Research also estimates, the target price or fair value of Prestariang at 92 sen representing 66.8% up site potential from 5th October closing price.

The table below is the historical & forecast financial summary.

FYE FY08 FY09 FY10 FY11* FY12*
Revenue (RMm) 46.4 39.4 58.5 80 95
Net Profit (RMm) 7.5 7.5 15.1 26.9 33.8
% chg y-o-y 49.10% 0.80% 101.10% 77.90% 25.90%
EPS (sen) 3.4 3.4 6.9 12.2 15.4
DPS (sen) 6.1 7.7
Dividend yield (%) ** 11.1 14.0
PER (x) ** 16.1 16.1 8.0 4.5 3.6

* – Forecast
** Based on 5th October share price

The key plus point of Preataring are,

  • Recession proof business with a good growth prospect.
  • Strong  orderbook of RM280m
  • Close relation with industry partners such as Microsoft
  • In-house developed products
  • Penetrating more government agencies
  • Management led by key promoter
  • Tax-exempt status until June 2015 given its Pioneer Status under MSC
  • Superior margins driven by focus on professional training and certification.

The largest shareholders of Prestariang are Dr Abu Hasan Bin Ismail (41.2%), Kumpulan Modal Perdana (9.5%) and PNB (4.8%).

What do you think about Prestariang Berhad?


Leave a Comment

  • kampunginvestor 6th October, 2011, 11:05 pm

    Companies with not much proven track record must be really careful. They might just gone with the wind in no time! I would personally not look into this company at the moment.

    Just my 2 cents! ^+^

    Reply
  • 1mdb.com 7th October, 2011, 8:59 am

    kampunginvestor, you are right. Need to be careful on new company without much track record.

    I buy small lots a few days ago based on their half year financial result. Seem to me 10% dividend yield this year is achievable if not close. Now the price shoot up more than 10% of my purchase price.

    Reply
    • kingjoke 5th November, 2011, 8:57 pm

      I tot u already sold yours…i bot few unit a month ago…price appriciate abt 15%. Intent to hold a bit longer.BTW thanks 4 ur opinion 🙂

      Reply
    • 1mdb.com 7th November, 2011, 9:21 am

      kingjoke, yes already sold but the price keep going up. Its OK as long as I make a positive return.

      Reply
  • newbie 4th November, 2011, 3:32 pm

    When I look up the company on Investing Businessweek, it says the co does not pay dividends..is there a mistake somewhere? Thanks.

    Reply
  • 1mdb.com 4th November, 2011, 5:33 pm

    newbie, yes Prestaring not paying any dividend since listing a few months back. But, they intend 50% of their net profit as dividend. This is what they say in their IPO prospectus.

    Reply