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Overseas Education Limited
01-03-2017, 08:49 PM,
Post: #61
RE: Overseas Education Limited
Increasing capacity in the private education industry coupled with a slow-to-no growing economy. It is going to be even more challenging for Overseas Education.

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25-04-2017, 10:03 AM,
Post: #62
RE: Overseas Education Limited
More and more competition.

Is OEL willing to drop the student fee per annum to remain relevant?
There are no good stocks. Stocks are only good when they go up after you bought them.

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25-04-2017, 05:43 PM,
Post: #63
RE: Overseas Education Limited
87,400 / 230,000 = 0.38

On 21 April 2017, Saray Developed Markets Value Fund boosted stake by acquiring additional 230,000 shares for a consideration of S$87,400.
Specuvestor: Asset - Business - Structure.
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10-05-2017, 12:24 AM,
Post: #64
RE: Overseas Education Limited
Revenue continues to trend lower (6.9% vs 1Q16) but profits inched slightly as expenses such as salaries/headcount was reduced (6.6% vs 1Q16). Balance sheet remains largely unchanged.

After more than a year of cost cutting, I believe there isn't much left to cut without seriously affecting the quality of education. A positive school environment, depends to a large part, having satisfied teaching staff.

Comparing 1Q14 -- before its move to the Pasir Ris campus -- with 1Q17, revenue fell while expenses rose:

1Q14 Revenue: $25.4m Expenses: $17.8m + $1m (depreciation) = $18.8m
1Q17 Revenue: $22.0m Expenses: $17.4m + $2.6m (depreciation) = $20.0m

Yet, competition continues to intensify in the international schools market. International schools continue to setup shop in Singapore, the more recent ones being Dulwich College and GEMS World Academy. As of 2016, there were 86 international schools in Singapore. Smaller players such as Middleton and Invictus have muscled in to offer cost-conscious expats more affordable options and are charging fees of $15k-$20k a year, which is half to a third cheaper than the full campus schools.

It should also be noted that the demand for quality education comes not only from the expat community working in Singapore, but also from the nouveau riche or elite families in our neighbouring countries. But some of this demand has shifted away as the international school locate themselves closer to their customers in Malaysia and Thailand, which means fewer of the wealthy Malaysian and Thai students may be coming to Singapore.

As if departing expats and increasing number of operators (in and around Singapore) isn't bad enough, there seems to be a plan to introduce more lower cost operators. This is probably part of Singapore's continued efforts to attract businesses and investments, by providing their expat workforce with affordable education. And they are planning to do that by leasing presently-unused school premises to international school operators. The short lease term also allows the operators to test the market before making bigger commitments; no need to spend a hundred million to lease lend and construct new buildings. With an increasing number of unused school premises from the merger of school, there shall be plenty of space available for interested operators.

Back to OFS' balance sheet, the biggest concern remains the refinancing of its bonds worth $143m in April 2019. Extrapolating its current profitability, it is unlikely that it will be able to earn enough to redeem the bonds fully. It is also unlikely that it will issue (sufficient) equity due to the low share price, and since the two major shareholders hold a combined 64%, they will have to fork out a very large sum if they do so. Therefore, OFS may likely issue more bonds, and since its business isn't doing as well as when it first issued its 5.2% bonds in April 2014, it may have to issue at a higher coupon rate, which may continue to compress its margins.

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27-07-2017, 06:31 PM,
Post: #65
RE: Overseas Education Limited
The competition for international students continues to heat up:

'Fees will be 40% cheaper compared with similar schools; classes begin next January'

'A new international school charging lower fees will open in January next year to cater to demand from expatriates looking for cheaper options.

One World International School (OWIS) will start a new Nanyang campus at 21, Jurong West Street 81, for students aged three to 18.

In a statement yesterday, OWIS said it will invest more than $10 million in the campus, which will be able to take in 1,200 students.'

Closer to OFS, construction of the Global Indian International School is well underway...

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11-08-2017, 07:19 PM,
Post: #66
RE: Overseas Education Limited
Business continues to be challenging at OEL as revenue shrinks 7.6% for 2Q17 when compared to 2Q16:

But when compared to 1Q17, revenue has stabilized.

Extrapolating its HY17 results for the entire year, profits may come in at about $5m - $7m.

Its April 2019 bonds -- where there are still $135m outstanding -- were still selling at a premium, and its market cap is about $153m. So at current prices, a buyer of OEL will be paying a total of about $288m.

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