OSK maintain TRADING BUY on Masterskill with TP of RM3.44

Masterskill Education Group's wholly-owned subsidiary, Masterskill (M) SB, has entered into an Undergraduate Articulation Program Agreement with Australia's University of Newcastle (UON). Under the agreement, UON will give one year’s advanced standing in the Bachelor of Business and Bachelor of Commerce program to Masterskill students in a number of study programs, including accounting practice and principles of marketing.

Maintain our TRADING BUY call at an unchanged FV of RM3.44 at 12x FY11 PER. Cheapest within our education sector coverage, the stock is trading at an alluring FY11 PER of 8.1x with a dividend yield of 6.2% p.a. We continue to see this as an opportune time to accumulate as the news flow on its Indonesian venture and collaboration with foreign university partners would likely grow over the next 2-3 months.

My view:
1. The recent sold down by its major shareholder SMALLCAP World Fund, Inc. ceased to be substantial shareholder on 21-Feb-2011. and "FMR LLC & FIL Limited" on 17-Feb-2011.
2. With this news about collabaration with University of Newcastle Australia, the market may have less fear about the Company's over concentration on Nursing courses.
3. Finally, market should have priced in all the fears... worst may be over (unless another major shareholder sells more). Trading opportunity is there for Masterskill..