Sasbadi’s latest LoAs to contribute positively to FY19 earnings
KUALA LUMPUR: Sasbadi Holdings Bhd’s (Sasbadi) latest projects granted by the Ministry of Education (MoE) are expected to contribute positively to the group’s financial year 2019 (FY19) earnings.
In a filing on Bursa Malaysia, Sasbadi announced that pursuant to the notification of the tender results by the MoE for the Year 3 textbook packages of national vernacular schools, directly-owned subsidiary Sasbadi Sdn Bhd (SSB) had signed and accepted two letters of acceptance (LoAs) from the MoE to publish and print the textbook packages for Mathematics and Arts Education subjects for Year 3 of the Chinese national-type primary schools (SJKCs) throughout Malaysia.
The group also announced that indirectly-owned subsidiary The Malaya Press Sdn Bhd (TMP) had signed and accepted a LoA from the MoE to publish and print the textbook package for the Chinese Language subject for Year 3 of the SJKCs throughout Malaysia.
“The RM6.53 million worth of LoAs are expected to contribute positively to group’s earnings in FY19,” the research arm of Hong Leong Investment Bank Bhd (HLIB Research) said.
“However, this is slightly lower than the first three contracts that Sasbadi won in FY17 which amounted to RM6.81 million.”
According to HLIB Research, Sasbadi will be delivering the group’s first portion of textbooks in the first quarter of FY19 (1QFY19) and 2QFY19 worth approximately RM3.9 million.
The research arm noted that the remainder of the contract sum will flow into FY19 and FY20.
“There will be one more round of tender award expected to be called in May-2018,” it said.
“Recall in FY17, Sasbadi won two contracts in the second round amounting to RM4.3 million.”
Overall, HLIB Research remained neutral on Sasbadi’s earnings outlook, while tracking closely the growth potential from i-Learn Ace and advance augmented reality (AR) educational products.
The research arm opined that they will take time before showing significant contributions.