Education counters see mixed price action


THE prospects of vaccines to manage the Covid-19 pandemic have benefitted cyclical but investors appear not too keen on education-based counters.

Education-based stocks have seen mixed price action over the past 11 months as nationwide lockdowns this year have disrupted school calendars and student intake across educational levels.

A check on Bloomberg showed that Prestariang Bhd and SMRT Holdings Bhd have made gains in their market price since the start of the year, while Minda Global Bhd and Land & General Bhd (L&G) were trading lower.

Prestariang’s share price has increased 78% or 29 sen year-to-date (YTD) to 66 sen, while SMRT has seen its share price rise by 33% or three sen to 12 sen over the period.

On the opposite end, Minda Global’s share price has declined by 8% or half a sen YTD to 5.5 sen, while L&G’s share price has fallen 28% or four sen to 10 sen. SEG International Bhd, however, has remained flat over the period, but was up one sen last Friday at 64 sen.

Known for its university and colleges under the brand name of SEGi, the group is looking at growing its market segments both locally and internationally in its upcoming fiscal year.

“SEG International is looking at adding on new academic programmes which are in demand by the workplace, particularly those related to technology.

“We are also expanding our reach internationally through collaborations and smart partnerships with local partners in many countries around the region,” it said in a bourse filing recently.

The education provider made a net profit of RM12.2 million in its third quarter ended Sept 30, 2020 (3Q20), a decrease of 19% year-on-year (YoY) from RM15.1 million.

Its 3Q20 revenue was also lower at RM50.7 million, a decline of 21% YoY from RM64.9 million.

“Lower revenue was partly due to the challenges in new enrolments as a result of border controls which are still in place, affecting the arrival of new international students,” it stated.

Minda Global also expects its performance to remain affected by the Covid-19 pandemic for the financial year ending Dec 31, 2020 (FY20).

The company owns the University of Cyberjaya, Selangor; Asia Metropolitan University in Johor Baru, Johor; and Asia Metropolitan Colleges in Kuching, Sarawak and Kota Kinabalu, Sabah.

It also has a presence in the languages and K12 segment through its ownership of the Oxbridge Language Centre and Asia Metropolitan International School.

Minda Global’s net loss in 3Q20 narrowed to RM3.06 million from RM8.66 million partly attributed to lower expenditure costs and administrative spending.

Its turnover, however, was slightly lower at RM23.65 million from RM24.18 million.

L&G, which owns Sri Bestari Private School, Sri Bestari International School and Manjaria Bestari Kindergarten via its wholly owned subsidiary Lang Education Sdn Bhd, recently posted an 87% higher net profit of RM14.08 million for its 2Q21 from RM1.74 million a year ago.

Revenue was up 32.5% to RM51.95 million versus RM39.22 million from a year prior.

The education business contributes about 20% to the L&G’s group revenue and slightly more than 10% to the profits.

The Malaysian Reserve had previously reported that private higher educational institutions (PHEIs) are bracing for another bad year as a result of delayed major examinations and a devastating drop in new enrolments for the upcoming sessions.

Malaysian Association of Private Colleges and Universities president Datuk Dr Parmjit Singh said the government needs to formulate a resilient policy that could ease the enrolment of local and international students which could ensure the survival of most of the PHEIs.