Prestariang Berhad is a Malaysia-based investment holding company. The Company's segments include Information and Communications Technology (ICT) training and certification and software license distribution and management (ICT services and distribution), Education, Employment services and Others. The ICT services and distribution segment is engaged in the provision of both basic and professional ICT training and certification encompassing instructor-led courses and certification examination at the end of the course. The Education segment includes University Malaysia of Computer Science and Engineering (UniMy), which provides computer science and engineering education. The Employment services segment provides human resource management services. The Others segment includes its investment holding activities. Its businesses provide a suite of services, including talent acquisition and management, and software asset management, as well as technology services in border security.

The notable Board of Directors is Dato’ Mohamed Yunus Ramli Bin Abbas, who is the Chairman, Non-Independent Non-Executive Director of Prestariang, has a strong corporate background in the ICT sector by being the former CEO of Celcom Axiata Berhad from 2002 till 2005 and formal Country Manager for Motorola from 1998 to 2001.

Based on Financial Year (FY) 2016 full year results, Prestariang achieved RM 132 million turnover, which is categorised as a small company based on turnover value. Other aspects of the company’s FY2016 financial results are illustrated in the table below.

Prestariang’s revenue is in a mixed trend for the past 5 years, with FY2016 achieving the highest revenue at RM 132 million while the lowest revenue was recorded in FY2014 at RM 78 million. Net earnings wise Prestariang is in a downtrend, from the highest earnings at RM 42 million in FY2013 to RM 8.9 million in FY2016. This is due to the increasing cost of revenue over the years.

Net profit margin wise, Prestariang achieved 7.3% and Return of Equity of 9.28%, both are of average values.

On company’s debt, Prestariang has closed to no debt with a very low debt to equity ratio at 0.002. The company has a strong current ratio at 5.02, but a low cash ratio of 0.25.

Prestariang pays a very low dividend yield of 1.25%, and with a payout ratio of 1.63, which means that the company is paying more than what it earns as dividends to shareholders.

In conclusion, although Prestariang has a low company debt, its net profit downward trend and paying out more than what its earning as dividend is not a good sign and investors should take precaution. As per the chairman statement, the thinning down of the business margin was mainly due to Malaysia’s weakened economy and Ringgit downturn. Moving forward, the company’s outlook remains positive due to the role out of SKIN Project (Sistem Kawalan Imigresen Nasional), which secures the company 15 years of new revenue stream. Purpose of SKIN is to enhance the effectiveness of Malaysia’s immigration and border security system with the use of digital technologies to replace existing system which is deemed outdated. This project will also allow Prestariang to offer similar services to government agencies and industries not only local but throughout the region as well.

Next quarterly results announcement is expected to be in the month of May 2018.

News on Prestariang Berhad

The Ministry of Finance (MoF) has extended Prestariang Bhd's contract for another three years to supply Microsoft software licences to all government agencies and a training centre for an estimated value of RM222.6 million. In a filing with Bursa Malaysia today, Prestariang said its wholly-owned subsidiary Prestariang Systems Sdn Bhd (PSSB) has received a letter of award from MoF on the extension under what it termed Master Licensing Agreement (MLA) 3.0, which would commence from Feb 1 this year to Jan 31, 2021. Prestariang said MLA 3.0 involves the supply of Microsoft software licensing, products and services, which is an enhancement of MLA 2.0 (Feb 1, 2015 till Jan 31, 2018), and includes a government training centre as a new customer base, with additional scope of services.

Management is finalising the funding for the Sistem Kawalan Imigresen Nasional (SKIN) project, estimated at around RM800 million. We are looking at a 20%:80% equity debt ratio funding for SKIN, which means the company might need to raise around RM160 million equity funding. The company is also expected to finalise the equity investors for the SKIN project.

The SKIN concession project is the revamping of the country’s immigration IT system. Construction work on the 15-year concession SKIN project has recently started and is targeted to be ready for full commercial use at end-2020. Prestariang would be paid by the government over 12 years, starting from 2021. We expect SKIN to generate RM3.5 billion revenue for Prestariang.

We continue to like Prestariang for its leading position in information communications technology training and the software distribution space in Malaysia. The award of SKIN is expected to beef up its net profit by more than eight times from FY16 to FY18 forecast, while its recent tie-up with Alibaba Cloud and Conversant Solutions to develop EduCloud may provide new revenue streams. 

iVolume Spread Analysis Weekly Chart & Comment – Prestariang Berhad

Weekly iVSAChart have shown Prestariang currently is in Distribution stage. We have seen more weakness in Prestariang chart and this are confirmed by the major Sign of Weaknesses at the resistance level. The 1^st Red Diamond in May 2017 have alerted investors/traders to exit Prestariang and avoided losses of -39%. Notice Red Diamond appeared again at mid of March after the continuation of distribution stage by Smart Money.

Accumulation stage need to be formed for coming weeks with Sign of Strengths to ensure Smart Money stop to distribute and follow by Green Diamond before you plan to invest/trade.

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