Raffles Education: uninspiring FYJun11 results.
Revenue at $157.6m, -16% yoy, due to persistently weak student enrollment in China, and headwinds from the appreciating SGD (85% of revenue derived from overseas).
Net profit at $41.9m, -20% yoy, but the bottom line would have been a net loss if not for the $76.8m fair value gain on invmt properties.
Co proposed a final div of 0.45cts. Including interim div of another 0.45cts (post 3-for-1 split), this translates to 2.1% yield.
Looking ahead, mgt will not be pursuing any aggressive regional expansion as it intends to focus mainly on improving the profitability of its existing schools.
NAV/ sh is 65.8cts, vs last close at 43.5cts.
Stock trades at 9.1x P/E, but is expected to widen to 18.4x FY12E P/E.
Credit Suisse maintains TP at $0.45, but upgrades to Neutral from underperform on valuation grounds.
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