SISB Public Company Limited (SET: SISB) signaled a larger growth for 2024 than 2023 after the number of Thai and foreign students rose in 1Q24, while also expecting excellent corporate earnings in 4Q23 as the company will announce its performance on 23 February 2024. Analysts gave a “BUY” recommendation at a target price of THB 43. The profit of the company in 4Q23 was expected to reach a new high of THB 211 million, supporting the whole of 2023 to generate a profit of THB 654 million, an increase of 77%.
Mr. Yew Hock Koh, CEO of SISB, revealed to “Kaohoon” that the direction for the business outlook in 2023 of SISB was satisfactory and will continue to do so in 2024 following the increasing number of students, both Thai and foreigners, that enrolled to study in the affiliated schools of the company in 1Q24. The number of students usually spiked to its peak in the third quarter of every year, as it was the beginning period of the new semester, while the current students also shifted to study in higher classes. This conformed to the confidence in the quality of the education, as the company was the number one international school in Thailand.
Regarding the overall business performance in 4Q23, the company expected the performance to be satisfactory following the increasing number of students. The company will hold its Board of Directors meeting to discuss the budget for 2023 and announce its corporate earnings on 23 February 2024.SISB estimated that there will be a total of 4,200 students in the system at the end of 2023, an increase from 3,114 students in 2022, with a maximum capacity of 6,715. The company expected the number to increase to 4,600 in 2024 after the company continuously expanded its maximum capacity to 7,165.
KGI Securities (Thailand) gave a “BUY” recommendation for SISB in 2024 at a target price of THB 43 (9% WACC and 4% TG) from the previous THB 41, as the firm foresaw 4Q23 performance to be the best performance for SISB in 2023. The firm also expected the company to report overall revenue in 2023 of THB 1,885 million with a net profit of THB 654 million, an increase of 77.1% compared to THB 1,319 million with a net profit of THB 369 million in 2022.
The company is expected to record a new high net profit of THB 211 million in 4Q23, an increase of 64.5% YoY and 64.2% QoQ, as the previous expectation was THB 190 million. The adjustment was due to the increasing number of students in 4Q23 of 4,197, which exceeded the previous expectation of 4,190, reflecting the stronger business performance of the company. As per the latest expectation, the number of students in 4Q23 is expected to be 4,197, a surge of 34.8% YoY and 1.7% QoQ. When combined with the rising tuition fees, SISB is expected to achieve revenue of THB 558 million, an increase of 43% YoY and 16.9% QoQ.
The business performance in 4Q23 was stronger than expected and could potentially be even stronger in the long term from the current campuses in Nonthaburi and Rayong provinces. The net profit of the company is expected to be a surge of 4.8% to THB 654 million, an increase of 77.1% YoY in 2023, and a jump of 5.5% to THB 879 million, or an increase of 34.5% YoY in 2024, as from the adjustment to increase the gross profit margin, the decrease of SG&A to 21.3% from 22.5%. KGI also upgraded other income from after-school activities as well.
In addition, SISB is expected to generate revenue in the total amount of THB 2,396 million, with a net profit of THB 879 million. The analyst sees SISB with a positive sentiment, favoring the development of the demand for English usage in many careers and the demand for a higher level of education, as well as the capability for parents to enroll their children in international schools.
