Friday, May 07, 2010

Feedback On Masterskill

4 comments:

kl said...

Goldman Sach's involvement must have helped with foreign investors. Don't like this offering. Somewhat pricey for my taste. Financial numbers a bit suspect too. Sustainable, ah, in the longer term? Was the jewel polished up before sale? Should be some premium upon listing given names involved in its IPO. I would be a stag if so.

Wedding Gifts, Favours, Bells... said...

they always make them look good during IPO stage... after 1FY results, all optimism will be gone...

see said...

RM11k per student courtesy of govt study loans PTPTN .....95% of students under PTPTN!

K C said...

Projections of dividend yield 4.6%, PER 13? HELP Institute with its years of track record gives you better yield and lower PER (I think so as I have not analyzed its financial statement yet). I could find scores of public listed companies with established records and much better than what is promised by Masterskill. Anyone thinks the actual results of Masterskill can be better than promised? Gila! How come there are investment banks willing to underwrite this IPO?


I was wondering how long it will take for my readers to ask the "right" question. The prize goes to SEE
see said...

RM11k per student courtesy of govt study loans PTPTN .....95% of students under PTPTN!

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I would like to ask another question, how many of the students are under PTPTN? I am not questioning whether Masterskill is a good place of learning, I am more concerned of its business model and the accountability plus transparency parts. If I set up HELP College, maybe 20% of the students will be on government scholarships or loans. Since I am privately owned, thats about right.

If 40% of my students are on the same government study loans, things start to blur. If its past 50%, danger Wilson, danger. I hope its not 95% like what SEE mentioned, but can we get a figure.

If the majority of students were on the same government study loans, then Masterskills profitability can be called into question. It recorded an audited revenue of RM273.4 million and net profit of RM97.4 million for its financial year ended Dec 31, 2009. No matter how you cut it, 97.4 divided by 273.4 is a fucking 35.6% NET MARGINS, where in the world can get that kind of net margins??!!?? If a college is dependent for the majority of students on the same govt's loans, it certainly is unjustifiable for the college to make such huge supernormal profits, or am I deluded? Of course if the number of said students is only a minority, then Masterskills is a terrific institution of higher learning... full stop.

Its important because if a private institution has the majority of students from the same government study loan scheme, the government should have a stake or a strong say in the institution, don't you think so. Some kind of build-operate-transfer should be in place. IF I am largely dependent on the same government loan scheme for the majority of my students, I would question why the government is not given a stake. Thats why we have UM, UKM etc. ... It also makes for a bad business model as in a convoluted way its like Proton all over again (started and maintained with huge subsidies from the government and the public).


But its a big IF, so can we have the release of the number of students under PTPTN at Masterskill please. No investment view, just questions.

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kh has left a new comment on your post "Feedback On Masterskill":

As of end 2009, there are 17,165 students, 95.5% of Masterskill’s students financed their programme fees via National Higher Education Fund Corporation (PTPTN)loans. The balance 4% of its students were sponsored by private foundations and public and private hospitals, and only 0.5% of its students were on self-financing.

Extracted fro DBS research dated 30th Apr 10.

Thanks KH, 95.5% hmm.... don't know what to say anymore ...



13 comments:

kh said...

As of end 2009, there are 17,165 students, 95.5% of Masterskill’s students financed their programme fees via National Higher Education Fund Corporation (PTPTN)loans. The balance 4% of its students were sponsored by private foundations and public and private hospitals, and only 0.5% of its students were on self-financing.

Extracted fro DBS research dated 30th Apr 10.

Roy said...

I'll give this a pass.

KoSong Cafe said...

Just guessing... PTPTN loans would mean a large portion in the form of debtors as at the financial year end. It is all legit to recognize revenue but the cashflow is something else which the company has to put up with for at least a few months.

Also another guess is that the demand comes from the increasing needs of expanding medical centres. Unless they have enough inhouse facilities for training, they would depend on Masterskill's graduates. If PTPTN is funding them, it saves them a lot on costs of training.

see said...

the question should be HOW they manage to get that many PTPTN qualifying students to sign up, what is the drop out rate, etc... must have strong powers of persuasion LOL! Nursing is considered among critical manpower skills for the country hence, easier to get the loan. The big risk i see is a tightening of criteria of PTPTN loans

eddie said...

Don't know how to reach u directly but this is for a totally unrelated posting in music.

Have a listen to Melody Gardot. Execellent Jazzy voice with interesting story of the singer.



Eddie

Jimmy Tham said...

and at the end of their study, most of these PTPTN sponsored students will be roped in to work with the government hospitals as an alternative to repaying the loan.

The other thing to look at, most of the government linked PE firms and offshore islands registered firms are a front for somebody. Enough said =) See the link there? How would they be able to secure such amount of loan and contracts to supply nurses at such a short span of time.

JP said...

I dont have the exact quote but I have read an article in The Star claiming that our country is currently facing a shortage of qualified nurses.

The 95.5% number looks suspicious. However, this is a nursing college we are talking about. Securing an education loan like this could be easier as the whole country is in-need of such expertise.

Beside, the rm23k annual tuition fees makes sense to me.
http://www.masterskill.edu.my/MASTERSKILL%20WEBSITE/masterskill/programmes/programmes.php
Look at the products this company is offering....pharmacy, nursing etc. Both of these courses are very hot among Malaysian students.

Let's look a bit deep into these products.
Bachelor of Pharmacy (Hons)
4+0 La Trobe University, Australia
KPT/JPS (KA 6953) 02/13 (PA 6953) 06/12

Bachelor of Nursing (Hons)
University of Sunderland, UK (Top-Up Programme)
KPT/JPS (KA 8505) 10/13 (PA 8505) 03/11

Okay, do you guys spot they key? Yeap, the degrees are awarded by foreign universities and hence the higher fees. Furthermore, the courses are accredited and approved by the responsible agencies proving the feasibility and qualification of these courses.

Anyway, Masterskill is not the only college offering critical healthcare courses in Malaysia. MAHSA college is another with identical business model but offering much more courses.

Malaysian parents are very crazy about the healthcare sector at the moment. If you do read the newspaper, all the Malaysian bright minds are opting for a career in healthcare after SPM/STPM/Pre-U such as Pharmacy, Dentistry and Medicine. It's one big bubble which is gonna burst in the next few decades.

I can see why the investors are so bullish about the company. I am bullish too but remain sceptical at the IPO numbers. The stock is good for a ride, at least, on paper.

Salvatore_Dali said...

JP,

No doubt the courses are good ... but can u see nursing being a high paying job??? A normal student would probably end up with at least RM30,000 loan at the end ... after a few years, we will have the same unpaid study loans situation again.

The thing is I am NOT SURE how vigilant are those study loans being disbursed. You can see how this may be "made easy" if the processes are not transparent enough. If it is deliberately made easy, we will have record number of nurses in a short time, all turning into unemployed nurses, with little ability to pay back the loans.

rontlp said...

Yeap, it is a matter of time before we see unemployed nurses, pharmacists and even medical officers in the country. That's the big picture and the ultimate question is "when".

It is a fact that we are facing manpower shortages in the healthcare sector which will continue for the next 5 years at least. Sooner or later, the supply is going to meet demand but at the mean time, the supply is lagging behind the actual demand.

Regarding the disbursement of ptptn loans, I think it is a policy thing. FYI, the particular study loan has expanded since the government made the decision to allow UEC students to be eligible for the loan as well. This indicates that PTPTN might have a larger war chest that we could ever imagine. Besides, PTPTN also announced that ptptn lenders who manage to secure a first class degree by the time they graduate need not repay the loan! And do you guys know how much interest PTPTN are charging on these loans? A whopping 4% on a yearly basis. I dont know where PTPTN get all those money from but I seriously think that PTPTN is a Santa Claus in disguise. How I wish I were a student!

Back to the fundamentals, Masterskill is certainly not the best education group among the other players. It has aggressive marketing strategy but we dont know about the genuine quality/sustainability of the products they are offering... the lecturers, the facilities, the services..we dont know.. The reasons why students are attracted to this college might be due to cheaper tuition fees, better accredited degrees and supposedly easy-to-secure study loans.

If PTPTN decides to tighten the loan requirements which will hit Masterskill on the head, it would be a big problem for the whole education sector in Malaysia...and believe me, I am going to short all the education stocks like hell if I were given the chance.

I believe Masterskill is a macro play. Higher instituitions like IMU are actually raising prices and requirements for the courses they are offering and that tells us how many students are fighting for a vacant there. 10 years ago, there were few medical universities. 10 years later, every university is offering a medicine degree and a further 10 years later, god bless [insert name] here. The point which I am highlighting is the supply in the healthcare sector is on steroids while the demand is staying constant from what I see.

If the quality of a website could enlighten us on the quality of a particular company, I would certainly think twice before I put any serious money into the company... The information available on its website is scarce and I couldnt even find the tuition fees for each specific courses!!

Bloody hell!!!!

Gabriel Ng said...

I thought everyone knew that most of these nurses end up working abroad. One doc at a private hospital told me there was a nursing SHORTAGE in Malaysia perenially because of this high turnover, nurses going to foreign countries. We now export nurses, like the Filipinos export helpers!

ronnie said...

Golly gosh. Gabriel tells us these nurses who get government loans are exported. What is the rate of loan delinquency? If these nurses are overseas, it is likely they will not be servicing the study loans. But if they do not go abroad, they will be poorly paid and will find it difficult to service these study loans. If the rate of delinquency is high, how long can the government afford to extend these loans?

We, the tax payers, are therefore subsidising export of nurses like we subsidise export of Protons.

K H said...

KLSE is looking more and more like a casino...

kh said...

I noticed that commenters too emphasise on nursing discipline, I would like to point out that out of 17,165 students (100% Malaysian), only 5,186 students are in nursing discipline, the rest (11,979) are studying allied health (i.e. therapeutic science, biomedicine and pharmacy). In term of revenue by product segment, 70% of the Group’s revenue in 2009 is contributed by allied health. Beside, Masterskill plans to further strengthen its status by introducing new programmes mainly in the allied health education. It has lined up a total of 24 new programmes (13 degrees and 11 master programmes) to be launched in 2010-2013.

Prospect
Statistics from the Ministry of Health (MOH) show that there is a serious shortfall of registered nurses in Malaysia. Based on a targeted nurse-to-population ratio of 1:200, Malaysia faced a deficit of 84,000 registered nurses in 2008. The MOH has also estimated a possible shortage of allied health professionals (excluding pharmacists) by 8,100 in 2009 and 8,752 in 2010 based on an optimum requirement of 96,560 and 101,207 personnel, respectively. Hence, this suggests an urgent need for trained nurses and allied health professionals, which would then underpin demand for such education programmes from institutions like Masterskill.
Other factors that would boost demand for healthcare workforce (such as qualified nurses and allied health professionals) are:
(a) larger population base which is projected to grow at 1.9% p.a.;
(b) growing number of healthcare facilities and hospital beds;
(c) rising elderly population;
(d) increasing healthcare expenditure;
(e) government’s commitment to healthcare, health education and training;
(f) healthcare tourism; and
(g) government’s target to make Malaysia a regional centre for higher education hub.

The Ministry of Higher Education recently said that it would stop issuing licenses for new institutions to conduct nursing courses at the diploma level effective 1 July 2010.
The intention is to force the existing educational institutions to improve the quality of education
programmes and offer more degree courses.
This is a positive development for existing players like Masterskill, given its market leadership position among the existing 106 institutions offering nursing courses.

Extracted from HwangDBS Vickers research report dated 30th Apr, 10.

Disclosure: I have strike 2 lots.

Those prefer to read the full report please follow this link:
http://www.einvest.com.my/Archive-CompanyFocus/1.%20Company%20Focus/By%20Date%20(past%202%20weeks%20only)/