Analysts expect strong recovery in Prestariang’s 2Q15 earnings

KUCHING: Analysts are expecting strong recovery in Prestariang Bhd’s (Prestariang) second quarter of 2015 (2Q15) earnings.

According to RHB Research Institute Sdn Bhd (RHB Research), Prestariang is set to release its 2Q15 results on August 19.

RHB Research believed core earnings would come within RM8 million to 12 million, up from 1Q15’s RM4 million, driven by Prestariang’s Microsoft contract, which has an outstanding orderbook of RM87 million as at end-March.

On top of that, the research house expected contributions from its previously expired contracts, although earnings accretion from these contract renewals will likely be more profound in the second half of 2015 (2H15).

“Notably, the 3P industry-based certification programme and IC Citizen certification programme re-commenced in May and June respectively, while the group has also clinched the renewal for its Managing University Software as an Enterprise (MUSE) programme for a period of two years commencing July 2015 at total sum of RM20 million,” RHB Research said.

On a side note, the research house gathered that enrolments for the group’s university are gradually picking up pace.

RHB Research continued to expect the institution to break even by end-2015, leveraging on its proposed tie-up with Majlis Amanah Rakyat.

The group is looking to roll out its accelerated training course for the Programme for International Student Assessment (PISA) by 4Q15 based on the research house’s channel checks.

“While the recent split of the Ministry of Education and Higher Education following the recent cabinet reshuffling could lengthen negotiations, we remain hopeful that the Government would firm this up in due course to address Malaysian students’ subpar performance in international examinations,” it said.

While management remains tight-lipped on the group’s recent tie-up with Unisys, RHB Research believed this partnership is intended to bid for new IT-related jobs to help expand the group’s recurring earnings base.

“This could propel earnings growth in the long run and hence help to further re-rate its share price,” the research house added.