Raffles Education

Raffles Education

Postby winston » Tue Jun 03, 2008 2:00 pm

Not vested anymore. From DBS:-

Story: We attended an analysts’ briefing yesterday by Mr Chew Hua Seng on the announced JV by Raffles Education Corporation (REC) with Educomp in India and China.

Point:
The JV with Educomp is a long-term partnership. Investment amount will total US$100m in India and US$50m in China (US$75m collectively for REC) over the next two to three years. The JVs will be focusing on tertiary education in India and K-12 education in China.

They will be looking to greenfield and/or acquisitions of schools. Funding by REC will be initially from bank loans, and thereafter listing of its China operations on HKSE and internally generated funds. Management is looking at an indicative S$500m- S$600m from its “vendor shares” arising from proposed listing, depending on market conditions. We are assuming debt funding at this point.
Management reiterated that there would be no other equity placement of REC shares and dividend payout will be maintained.

Relevance: We see the JV as positive since the potential of the education market for both REC and Educomp is huge given the population in India and China. REC’s shares have appreciated by about 5.5% since the announcement and further appreciation in price should come at a later stage when there are clearer signs of progress and benefits attributing from this JV such as the:-
(i) establishment of greenfield schools;
(ii) acquisitions of schools;
(iii) further announcement pertaining to specific initiation and/or development of courses/students intake.

Maintain Buy, TP: S$1.64.
We
(i) rolled over our DCF valuations to FY09F;
(ii) assume a higher WACC as a result of higher beta currently at around 1.1 (from c. 1x previously);
(iii) higher level of gearing (net gearing of 38% as at FYE Jun 09F); and,
(iv) the slight dilution arising from the issue of new shares (for Hartford Education Corporation exit offer). Consequently, our TP is adjusted slightly to S$1.64, on DCF with a WACC of 9.2% (from
8.6%), terminal growth of 3%. Maintain BUY.
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Re: Raffles Education

Postby millionairemind » Wed Jun 18, 2008 9:41 am

Date 6/6...
Not vested as of now..

Raffles Education Corp
Price - $1.33 Target - $1.75

Raffles Education (RLS) management organised a briefing for analysts to communicate further details on its two JVs with Educomp, which were announced on 27 May-08. We received greater clarity on management’s rationale for initiating the tie-ups - essentially to develop both greenfield and brownfield schools in India together, and to modify and subsequently, rollout Educomp’s successful education content software model across the Chinese market. While both JVs could take time to contribute meaningfully in terms of revenue and profits, we believe that a partnership between two of the strongest education brand names in the region is mutually beneficial to both parties, given their strong presence and deep local experience in their respective markets. RLS has continued to soundly place its bets on the secular growth of Asia’s middle class market, where rising incomes and aspirations should continue to insulate demand for education services from economic cycles. Maintain OUTPERFORM. – Credit Suisse (03 Jun)
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Re: Raffles Education

Postby LenaHuat » Wed Jun 18, 2008 9:48 am

This counter is also on my radar. The 'education theme' has worldwide appeal and demand.
So many stocks to buy :mrgreen: but I am patient abt this market. I would wait things out.
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Re: Raffles Education

Postby iam802 » Thu Dec 04, 2008 10:59 am

The rumour is KKR is doing a leveraged buyouts with a group of 5 banks linked to the deal.

For those who are interested, do take a look at the chart.

There is some selling going on as well. Today, it has break the first line of resistant at 0.47

As with all M&A deals, there will be risks involved and nothing is guaranteed. Be careful out there.

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Re: Raffles Education

Postby mocca_com » Thu Dec 04, 2008 11:45 am

even if there isnt any takeover, this company is also a good company. i believe during downturn, there will be more people wanted to further study in china and raffles education is a good player in that field at china. Beside this, the shareholders are increasing their stake in the company thru open purchase. vested

http://info.sgx.com/webcorannc.nsf/new% ... .1.2#1.1.2
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Re: Raffles Education

Postby mocca_com » Fri Dec 05, 2008 6:47 pm

Chung Gim Lian, Doris is increasing its stakes in raffles education. with the rumour of leveraged buyout, is seem like there could be a power strangle going on. haha
http://info.sgx.com/webcorannc.nsf/ef3b ... enDocument
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Re: Raffles Education

Postby kennynah » Sat Dec 06, 2008 10:15 pm

so...who's strangling who ?
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Re: Raffles Education

Postby mocca_com » Sun Dec 07, 2008 12:59 am

DUN KNOW.. PURE GUESS. WAHAHA
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Re: Raffles Education

Postby winston » Thu Dec 11, 2008 12:48 pm

From Kim Eng:-

Raffles Education Corp – Chairman Chew Hua Seng's direct stake in mainboard-listed Raffles Education Corp has increased to 32.34 per cent from 9.76 per cent, following the distribution of shares from a family trust. Humble Trust is a family trust that was set up five years ago, a spokesman for Raffles Education Corp told BT. However, the spokesman declined to comment on the termination of the trust. Humble Trust, which is managed by trustee Credit Suisse Trust Limited, held a 22.58 per cent stake - or about 523.81 million shares - in Raffles Education Corp and 'will be terminated following the distribution of shares to family members under the trust', a notice released on the Singapore Exchange (SGX) said.

The move means that Mr Chew's deemed stake has correspondingly dropped to 2.71 per cent from 25.29 per cent. Mr Chew's direct stake is now about 750.28 million shares, up from 226.47 million. The difference of about 523.81 million shares are held jointly by Mr Chew and his spouse. His spouse's direct stake in the company rose from 2.71 per cent to 25.29 per cent, also inclusive of the 523.81 million shares jointly held. Her deemed stake is now 9.76 per cent, down from 32.34 per cent
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Re: Raffles Education

Postby winston » Mon Jan 05, 2009 9:21 pm

20081229 SBI Raffles Education (RLS SP, S$0.58, BUY) - In a class of its own
Raffles Education (RLS SP, S$0.58, BUY) – In a class of its own

Initiating coverage with a BUY. We are initiating coverage on Raffles Education (REC) with a BUY recommendation and a 12-month target price of S$0.77, pegged at 15x FY06/10 P/E. We like education sector in general because it is a counter cyclical play to a softening economy that is often accompanied by high unemployment rate. Moreover, its colleges in China should continue to experience decent growth given that the country's educational capacity is still falling short of the increasing social demand.


Company profile

Established in 1990, Raffles Education Corp (REC) is the largest private education company primarily focused on Design and Business Management training in the Asia Pacific region. The company currently has 30 colleges across 9 countries with a total student population of about 33,000 students (as at Sept 2008). The company also owns the Oriental University City in Langfang, Hebei Province, China – a 3.31m square metres self-contained campus. Within this campus, there are 19 colleges with 57,000 students.


Investment merits

1) Resilient in an economic downturn
We believe REC offers good defensive play especially in times of highly uncertain macro environment. Education sector is usually viewed to be somewhat counter-cyclical as new student enrollment rates (including adult workers whom may see an increasing need to return to schools to upgrade their skills and practical training) may actually benefit from an economy downturn and weakening job market.

In particular, shorter-term programs such as Associate Degree, Diploma and Certificate programs tend to be more popular than higher level programs, which are longer term and require a larger commitment (such as Bachelor’s, Master’s Degrees). The degree of such resilience may also depend on the industries for which the programs are offered (For e.g., an education provider with a heavier exposure to healthcare training should do relatively better since the industry is typically considered to be evergreen in nature).


2) Growth strategies in place

Coupled with a scalable business model, REC plans to both organically and inorganically expand in two main directions:

Program breadth expansion – From purely design colleges, REC has subsequently expanded into additional fields such as Business Management (2004) and Psychology (2006) mainly through acquisitions. It intends to continue selectively expanding into other disciplines that have huge latent demand. As part of this strategy is the expansion into brownfield projects such as operating full-scale private vocational colleges and university cities in China.

Geographic expansion – REC’s 30 colleges are already widespread geographically throughout the Asia Pacific, with colleges in Australia (1), China (15), India (1), Malaysia (2), Mongolia (1), New Zealand (2), Singapore (3), Thailand (1) and Vietnam (4). Looking ahead, the company plans to continue expanding its presence in the region with a focus on three emerging countries i.e. China, India and Vietnam.


3) Buoyant industry prospects

In our view, China's education and training is still a sunrise industry. In particular, China's vocational education market has a huge untapped potential. In 2007, China's number of college graduates jumped to 4.79m from 2.50m in 2004, which on the one hand increases greatly employment pressure on the society while on the other hand, quite a few companies are still complaining that it is short of qualified talents. We believe such a poor match between supply and demand generates a huge demand for education after graduation. A continuous rise in the number of people pursuing bachelor and master degrees and a sustained expansion of college enrollment offer an enormous market for education and training industry.

In 2007, China had a total of 95,200 various kinds of private schools at all levels (excluding 22,300 private training institutions). The number of students aiming for various sorts of academic qualifications totaled 25.84m in the year, of which, 1.63m students studied in 297 private colleges and 1.87m students studied in 318 subordinate colleges. Notably, Chinese family's heavy emphasis on education and increasing rise in employment pressure at home provide a good opportunity for the domestic education/training sector.
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