RafflesEdu

RafflesEdu: Co has exercised option to acquire Merchant Square, comprising 4-storey commercial office tower and 2 blks of shophouses for $65.0m. Only including direct expenses, net profit attributable to Merchant Square was $1.8m. Co intends to use space for education business instead of using rented premises when lease is up. Acq is conditional on authority approval for zoning and use of property and will be funded through internal funds and loans…

Our own house has had a conference call highlighting co has obtained approval to convert part of OUC’s land (approx 280k sqm) in China for residential dev and is in talks to form a JV, intends to list OUC by 2013. Other takeaways include a challenging environment for China enrollment and further growth to come from 13 colleges set up in India and SEA….

With current acq and OUC dev, counter is leaning towards property dev away from a education-service pure play. Total assets as of 1Q Sept results were at $850.6m, of which 55% or $468.7m were classified as investment properties. Counter trades at current P/E of 14.68x and P/B of 1.38x.