A Look At HELP International's Earnings

HELP International had been a darling stock for investors. ( HELP was listed on May 2007. )

Miss out on that?

HELP International reported its earnings last night.

Since HELP belongs to the educational sector, it's logical that the only comparison worth noting is the y-y comparison.

It was impressive.

Revenue: 30.976 million vs 27.927 million.
Net Profit: 6.973 million vs 5.330 million.

Here's Help International track performance as a listed business entity.

ttm stands for trailing twelve months.

And if here's the expanded view..



It does look very impressive, yes?

Growth is there. Piggy bank cash is healthy and growing and the fact that HELP had avoided the helping hand from the banks (ie no loans) is certainly very impressive.

Does this look like a stock one could invest or is there issues for concern?

Here are some recent news...

• Higher student numbers will HELP it achieve target (from Business Times April 2010)
  
  By Jeeva Arulampalam Published: 2010/04/28
  
  HELP International Corp Bhd (7236) hopes to achieve double-digit growth for its full-year earnings, driven by rising student intake as it adds more home-grown programmes.
  
  The group saw its revenue increase 13 per cent to RM23.5 million for its first quarter ended January 31 2010. Its net profit doubled to RM2.4 million for the period.
  
  "We aim to grow the student numbers in our own programmes offered. Currently, about 42 per cent of our graduates are from our very own programmes and not from twinning programmes," group chief executive officer Datin Low Kam Yoke told reporters after the group's annual general meeting in Kuala Lumpur yesterday.
  
  She said HELP wants to increase the percentage to 80 per cent in less than five years, as the education provider moves towards becoming a university from its current status of university college.
  HELP currently has some 11,000 odd students but will work towards achieving some 20,000 students by 2016.
  
  Low added that HELP has some 1,000 off-campus students in overseas markets such as Indonesia, China and Vietnam through partnership courses.
  
  The group wants to grow its franchise programmes by partnering with at least four institutions in Indonesia per year and also strengthening its presence in Vietnam and Indochina.
  
  HELP University College has also recently entered into two collaborations with China based Global EduTech Management Group and Singapore's EggStory Digital Arts Academy.
  
  The Singapore collaboration will see digital arts courses being offered, which include animation and interactive graphics.
  
  Meanwhile, group president and co-founder Datuk Dr Paul Chan said the overall group strategy was to build the right talent, management, partnerships, intellectual property and physical facility.
  
  It will be setting up two new campuses in the Klang Valley with operations starting this September at the Fraser Business Park campus in Kuala Lumpur
  "This campus will house the vocational courses while the Subang 2 campus will be an integrated facility providing our own home-grown courses," Chan said.

( the cash flow statement from its earnings reported last night showed the acquisition of land worth some 9 million)

And..

• AP Land, HELP in education venture
  
  Published: 2010/05/13
  
  ASIA Pacific Land Bhd (AP Land) has signed an agreement with HELP International Corp Bhd (HELP) to jointly provide education in any country including Malaysia and China.
  
  Under the deal, AP Land and HELP will form a joint venture (JV) with equal shareholding between the companies.
  
  “The JV will provide education in jurisdictions deemed viable across the whole spectrum of educational levels and fields in any country including Malaysia and China,” said AP Land in a filing to Bursa Malaysia yesterday.
  
  The JV will allow AP Land to fast track the growth of its education division, to complement its core business of property development.

Now as an education business, one of the issue one needs to look out for is fees. Education fees is one balance sheet item to watch for. Are the fees collected in advance? How is the company 'accounting for these fees collected in advance'? Are there any poor collection of fees?

Here's the compiled table.

From the compiled table, I reckon the fees collected in advance and fees receivables looks normal and acceptable but what I do not understand is the entry called 'other receivables'. And the fact that this 'receivables' is increasing is a worry.

For me, I cannot even fathom what 'other receivables' a business like HELP International could have besides education fees receivable.

And as stated in the Business Times articles, the management of HELP International has the ambition to grow as a business entity. Which is good. An ambitious company equals to a company with potential. And as an investor, this is great because with such ambition, the investor knows that there is potential to see the investment to grow.

But as usual there are risks involved. Yes, get real, there's no business without any risk. It just does not exist.

From Help International earning notes.

Help International states its capex commitment totals some 70.505 million.

Now if you compare the amount to HELP's balance sheet, this is no small commitment and as an investor, one would need to address this issue and question if the capex would be a future burden to HELP's balance sheet.

ps: I need to make a disclaimer.... hmmm... I have no idea if this rubbish blog posting of mine would HELP you lose money! (LOL! pun intended. :P)..

missed out the article on Business Times..

• Cost cuts, home-grown courses Help boost profit
  
  Published: 2010/06/19
  
  HELP International Corp Bhd (7236), an education group, said its second quarter net profit jumped by almost a third and it is confident of its prospects for the full year.
  
  The group posted a net profit of RM7 million for the quarter to April 30 2010, up 31 per cent from the same period a year earlier.
  
  Revenue was up 11 per cent to RM31 million.
  
  Help said the good results were due to better revenue that was driven by its home-grown programmes and prudent cost management.
  For the six-month period, net profit jumped 43 per cent to RM9.4 million while revenue was up 12 per cent to RM54.5 million.
  
  Help's stock also hit its highest ever price of RM2.80 although it closed at RM2.78, which is still a gain of 3 per cent for the day.
  
  "Our home-grown courses continue to excel as enrolments increase. We are in the process of rolling out our E-Learning programmes to support our students overseas.
  
  "We are looking into broadening our income base in the education and training sector abroad," it said in a statement to Bursa Malaysia.
  
  On June 17, Help signed a deal with property developer Asia Pacific Land Bhd (AP Land) to identify education business opportunities in Malaysia and China.
  
  "We're bullish about our growth and expansion for the next 5 years. The Help Group is expanding into overseas markets with some good partners, which will bring about significant growth for the company," said president Datuk Dr Paul Chan.
  
  
  
  Read more: Cost cuts, home-grown courses Help boost profit here