Stock Calls

Raffles Education

Hold | 66.5 cents

OCBC Investment Research cuts Raffles Education Corp’s fair value estimate to S$0.650 from S$0.815, and maintains a Hold rating.

This follows the group’s Q3 earnings, which showed a 15.4-per-cent decline in revenue on-year and reflected a 33.7 per cent and 20.6 per cent cut in FY11 and FY12 core earnings estimates respectively. “Besides the persistent structural headwinds still facing REC, we also note that start-up expenses from the expansion of new colleges continued to cause a drag on REC’s earnings,” OCBC says.

The stock is down 3 per cent at S$0.64.

Dr B S Goh

14/03/2011

I think this is a sensible decision for all concerned.

In 1987, I set up the first private university college in Australia in Claremont and then built a new campus in Joondalup. It was called the Australian Institute for University Studies and it conducted courses from Curtin University and London University. Around that time Alan Bond was thinking of setting up a private university in Yanchep but he built it in the Gold Coast. I tried to build a second campus in Sydney but failed for a variety of reasons.

The fact of the matter is that Perth is not a popular destination for International Students coming to Australia. In my opinion it is best for Midland to get an existing university in Perth to build a branch campus for conducting Foundation Courses and First Year Courses.

HL2

14/03/2011

If you had girls like the one pictured above going to Midland uni, I think you'd see TEE results in surrounding schools jump 500%.