Paramount’s stock is trading just slightly above its net assets per share of RM5.42 as at March 31, but less than 10 times historical PER for its core earnings.Indeed, the valuation of HELP may be a good gauge of how much Paramount’s education division could potentially be worth.
HELP has a market capitalisation of RM373.6 million and is trading at a trailing PER of 17.2 times and 15.9 times forward PER. For FY10 ended October, HELP posted a pre-tax profit of RM26.68 million on a revenue of RM105.2 million.
This makes HELP about 15% larger than Paramount’s education unit in terms of pre-tax profit and 8% bigger in terms of revenue.
If Paramount’s education unit is priced at a 15% discount to HELP in terms of market capitalisation, the unit, if listed, could be worth around RM317 million. This is equivalent to 46% of Paramount’s current market capitalisation, even though the education unit accounts for only 20% of core earnings. Paramount’s education business has fared well with pre-tax profit coming in steadily at above RM20 million a year between FY07 and FY10. Currently, the division is on a new expansion drive which could potentially see earnings reaching a much higher level from FY14/FY15 onwards.
Paramount CEO and managing director Ong Keng Siew told The Edge Financial Daily that the expansion is for both the tertiary and private school units, explaining that a new RM400 million campus for KDU University College is under construction while the group is also starting its new international school programme this September.
Paramon 1724 已加快让集团子公司 Kdu University College 上市,以让公司回收大量现金供作发展和回愦股东,2009年盈利四千两百万(全年股息Rm210),2010年盈利五千七百万(全年股息Rm280),2011年盈利一亿五千万(全年股息+特别股息Rm750/每股),本益比1.22,EPS126 cents,公司现有现金流高达三亿。 |