KUALA LUMPUR: CIMB Equities Research believes that SMRT is the cheapest education stock on Bursa Malaysia.
It said on Friday with 80% recurring revenue and a projected 35% to 50% three-year EPS CAGR, in turn supported by its medical university and English language teacher training contracts, this under-researched gem is poised for a re-rating.
CIMB Research said SMRT is trading at only 9 times to 11 times FY16 price-to-earnings (P/E).
“Assuming SMRT’s FY16 net profit to be around RM21mil to RM27.5mil (without Pro ELT and with Pro ELT) and pegging the value of the stock at 16 times FY16 P/E (in line with the education sector), it could trade up to RM1.04 to RM1.38, giving investors 40-86% upside.
“Potential re-rating catalysts are its transfer from the ACE Market to the Main Board and award of the Pro ELT contract,” it said.
It said on Friday with 80% recurring revenue and a projected 35% to 50% three-year EPS CAGR, in turn supported by its medical university and English language teacher training contracts, this under-researched gem is poised for a re-rating.
CIMB Research said SMRT is trading at only 9 times to 11 times FY16 price-to-earnings (P/E).
“Assuming SMRT’s FY16 net profit to be around RM21mil to RM27.5mil (without Pro ELT and with Pro ELT) and pegging the value of the stock at 16 times FY16 P/E (in line with the education sector), it could trade up to RM1.04 to RM1.38, giving investors 40-86% upside.
“Potential re-rating catalysts are its transfer from the ACE Market to the Main Board and award of the Pro ELT contract,” it said.
