Singapore Stock Market News

Overseas Education Ltd - Defensive earnings

StockFanatic
Publish date: Tue, 28 May 2013, 10:27 AM
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Overseas Education's (OEL) earnings are resilient with little credit risk, we believe, due to its upfront collection of fees. A 50% dividend policy pays investors for waiting for the next step-up in its earnings on the completion of its new campus in 2015.

We initiate coverage with an Outperform and S$0.91 target price, based on DCF (WACC 7.6%). Implied 17.1x CY14 P/E is in line with the average of regional peers. Re-rating catalysts are expected from the completion of its new campus.
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