Prestariang has clinched its first Middle East contract worth USD750k for a period of 3 years. It signed an agreement with Knowledge Point Educational Consultant (KPEC), an education and consulting firm based in Abu Dhabi, United Arab Emirates (UAE), to implement the Project-based Cyber Ethics Program in the UAE market.
Small for now but huge on potential. Although the contract value is deemed insignificant at approximately 1% of Prestariang’s existing orderbook of over RM200m, we see great underlying potential given the enormous addressable market with anchor partner KPEC on board. Riding on the collaboration, Prestariang could explore opportunities arising in other countries in the Arabian gulf region. This is in line with its intention of making strategic expansion into regional markets leveraging on its in-house training and certification products.
BUY. Since we initiated coverage on 29 Sept, Prestariang’s share price has moved up by a stellar 30%, outperforming the benchmark FBM KLCI index by over 25%. We continue to like the stock’s compelling valuation, sturdy orderbook as well as efforts to diversify its earnings stream, riding on its innovative in-house developed products. Moreover, trading interest is likely to spike up as the news flow on its overseas forays increase in the coming months. Hence, we maintain our BUY call at an unchanged Fair Value of RM0.92, based on an appealing 6x FY12 PER, with yield of >9% for both FY11 and FY12.