SGX:RQ1

Stock Analysis Report

Executive Summary

Overseas Education Limited, an investment holding company, operates a private foreign system school in Singapore.

Rewards

Trading at 70.1% below its fair value

Earnings are forecast to grow 6.92% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 8.73% is not well covered by earnings or forecast to be in the next 3 years

Does not have a meaningful market cap (SGD131M)



Snowflake Analysis

Good value with acceptable track record.

Share Price & News

How has Overseas Education's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RQ1 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

RQ1

-1.5%

SG Consumer Services

0.1%

SG Market


1 Year Return

5.0%

RQ1

0.9%

SG Consumer Services

2.5%

SG Market

Return vs Industry: RQ1 exceeded the SG Consumer Services industry which returned 0.9% over the past year.

Return vs Market: RQ1 exceeded the SG Market which returned 2.5% over the past year.


Shareholder returns

RQ1IndustryMarket
7 Day0%-1.5%0.1%
30 Day10.5%1.6%-1.0%
90 Day12.5%5.9%1.8%
1 Year14.7%5.0%2.9%0.9%6.7%2.5%
3 Year10.4%-11.3%6.2%0.7%16.5%4.0%
5 Year-48.8%-62.9%8.6%-2.5%13.0%-6.0%

Price Volatility Vs. Market

How volatile is Overseas Education's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Overseas Education undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RQ1 (SGD0.32) is trading below our estimate of fair value (SGD1.05)

Significantly Below Fair Value: RQ1 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RQ1 is good value based on its PE Ratio (17.3x) compared to the Consumer Services industry average (17.9x).

PE vs Market: RQ1 is poor value based on its PE Ratio (17.3x) compared to the SG market (13.3x).


Price to Earnings Growth Ratio

PEG Ratio: RQ1 is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: RQ1 is good value based on its PB Ratio (1x) compared to the SG Consumer Services industry average (1x).


Next Steps

Future Growth

How is Overseas Education forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

6.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RQ1's forecast earnings growth (6.9% per year) is above the savings rate (1.8%).

Earnings vs Market: RQ1's earnings (6.9% per year) are forecast to grow faster than the SG market (6.4% per year).

High Growth Earnings: RQ1's earnings are forecast to grow, but not significantly.

Revenue vs Market: RQ1's revenue is expected to decline over the next 3 years (-0.2% per year).

High Growth Revenue: RQ1's revenue is forecast to decline over the next 3 years (-0.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RQ1's Return on Equity is forecast to be low in 3 years time (6.4%).


Next Steps

Past Performance

How has Overseas Education performed over the past 5 years?

-31.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RQ1 has high quality earnings.

Growing Profit Margin: RQ1's current net profit margins (9.3%) are higher than last year (8.5%).


Past Earnings Growth Analysis

Earnings Trend: RQ1's earnings have declined by -31.1% per year over the past 5 years.

Accelerating Growth: RQ1's earnings growth over the past year (7.1%) exceeds its 5-year average (-31.1% per year).

Earnings vs Industry: RQ1 earnings growth over the past year (7.1%) underperformed the Consumer Services industry 9.2%.


Return on Equity

High ROE: RQ1's Return on Equity (5.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Overseas Education's financial position?


Financial Position Analysis

Short Term Liabilities: RQ1's short term assets (SGD33.2M) do not cover its short term liabilities (SGD35.3M).

Long Term Liabilities: RQ1's short term assets (SGD33.2M) do not cover its long term liabilities (SGD120.0M).


Debt to Equity History and Analysis

Debt Level: RQ1's debt to equity ratio (84.6%) is considered high.

Reducing Debt: RQ1's debt to equity ratio has reduced from 98.9% to 84.6% over the past 5 years.

Debt Coverage: RQ1's debt is well covered by operating cash flow (22.6%).

Interest Coverage: RQ1's interest payments on its debt are not well covered by EBIT (2.7x coverage).


Balance Sheet

Inventory Level: RQ1 has a high level of physical assets or inventory.

Debt Coverage by Assets: RQ1's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Overseas Education's current dividend yield, its reliability and sustainability?

8.73%

Current Dividend Yield


Dividend Yield vs Market

company8.7%marketbottom25%2.5%markettop25%5.4%industryaverage2.1%forecastin3Years8.9%

Current dividend yield vs market & industry

Notable Dividend: RQ1's dividend (8.73%) is higher than the bottom 25% of dividend payers in the SG market (2.5%).

High Dividend: RQ1's dividend (8.73%) is in the top 25% of dividend payers in the SG market (5.44%)


Stability and Growth of Payments

Stable Dividend: RQ1 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: RQ1 has only been paying a dividend for 7 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (151.1%), RQ1's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RQ1's dividends in 3 years are not forecast to be well covered by earnings (134.9% payout ratio).


Next Steps

Management

What is the CEO of Overseas Education's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

David Alan Perry (77yo)

0yrs

Tenure

S$338,200

Compensation

Mr. David Alan Perry serves as the Chief Executive Officer and Executive Chairman of Overseas Education Limited. Mr. Perry serves as Chairman of Board Of Directors of Overseas Family School Limited. He has ...


CEO Compensation Analysis

Compensation vs Market: David Alan's total compensation ($USD248.22K) is about average for companies of similar size in the SG market ($USD252.26K).

Compensation vs Earnings: David Alan's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.3yrs

Average Tenure

62yo

Average Age

Experienced Management: RQ1's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

7.3yrs

Average Tenure

64yo

Average Age

Experienced Board: RQ1's board of directors are considered experienced (7.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyS$81,20021 Jun 19
Saray Capital Limited
EntityCompany
Shares280,000
Max PriceS$0.29

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Kok Liang Chew

    Company Secretary

    • Tenure: 0yrs
  • Irene Wong (64yo)

    Executive Director

    • Tenure: 8.2yrs
    • Compensation: S$352.62k
  • David Alan Perry (77yo)

    Executive Chairman & CEO

    • Tenure: 0yrs
    • Compensation: S$338.20k
  • Jason Lee (50yo)

    General Manager

    • Tenure: 12.9yrs
  • Suzanne Magdalen Bentin (60yo)

    Head of School/High School Principal

    • Tenure: 0.7yrs
  • Patrick Wong

    Head of Security

    • Tenure: 3.3yrs

Board Members

  • Yew Mun Ho (67yo)

    Lead Independent Director

    • Tenure: 7.3yrs
    • Compensation: S$120.00k
  • Clement Leow (44yo)

    Independent Director

    • Tenure: 7yrs
    • Compensation: S$120.00k
  • Irene Wong (64yo)

    Executive Director

    • Tenure: 8.2yrs
    • Compensation: S$352.62k
  • David Alan Perry (77yo)

    Executive Chairman & CEO

    • Tenure: 0yrs
    • Compensation: S$338.20k
  • Teng Muan Tan (57yo)

    Independent Director

    • Tenure: 8.2yrs
    • Compensation: S$100.00k
  • David Peter Walker

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: S$100.00k

Company Information

Overseas Education Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Overseas Education Limited
  • Ticker: RQ1
  • Exchange: SGX
  • Founded: 1991
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: S$130.840m
  • Shares outstanding: 415.36m
  • Website: https://www.ofs.edu.sg

Number of Employees


Location

  • Overseas Education Limited
  • 81 Pasir Ris Heights
  • Singapore
  • 519292
  • Singapore

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RQ1SGX (Singapore Exchange)YesOrdinary SharesSGSGDFeb 2013

Biography

Overseas Education Limited, an investment holding company, operates a private foreign system school in Singapore. The company offers an integrated inquiry-based program comprising the International Early Y ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/07 12:57
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.