Yew Hock Koh, CEO of SISB Public Company Limited (SET: SISB), revealed to “Kaohoon” that the company would hold the Board of Director meeting on 20 February 2025 to review and approve the financial performance of 4Q24 and the 2024 annual financial statement.
Overall, the performance in 4Q24 would be the peak of 2024, as the period has grown from the previous quarter and the same period a year ago due to a surging number of enrollees, both Thai and foreign, especially Chinese.
The fourth quarter would also recognize a full quarter of revenues from the increased tuition and related activity fees in the first semester (August 2024) of the academic year 2024/2025.
The overall performance of 2024 has gone as planned, and SISB fundamental factors did not see any change. The company is confident that 2024 earnings will grow no less than 20% from its previous year, which booked THB 1,940 million, while maintaining its three-year goal for 2024-2026.
SISB, Thailand’s number one international school, aims to expand its student compound annual growth rate (CAGR) to at least 400 students per year, or 4,600 students in 2024, from 4,197 students in 2023. The number of students is expected to reach 5,000 in 2025, and 5,400 in 2026. Meanwhile, the company also set a target of 17% annual revenue growth or reaching THB 3,100 million within 2026, which could come from growth in existing schools or the opening of new schools.
As for the previous dip in stock price, SISB sees it as a result of the market conditions, a previous hike in the share price, and other variables outside of the company’s control. The company has affirmed that it took no part in putting the company stock as a collateral margin and then being forced to sell the share.
Koh also said that SISB’s campus expansion plan in 2024-2026 would increase the lecture seats to around 2,800 seats, and the company has allocated approximately THB 896 million for the construction budget. The expansion plans would consist of:
- The second phase of expansion of the Chiang Mai campus, which would add 300 new seats, is worth THB 66 million. The project has finished and has opened for business in February 2024, and will be fully open in 2025.
- The third phase of expansion of the Pracha Uthit campus, which would add 600 new seats, is worth THB 250 million. The project is expected to finish in 1Q26.
- The third phase of expansion of the Thonburi campus, which would add 900 new seats, is worth THB 250 million. The project was then separated into two phases:
- The first phase would add 300 seats using THB 30 million of the budget, and finished in August 2024.
- The second phase would add 600 seats using THB 30 million of the budget, the project is currently on hold until the new law governing the area-to-floor ratio has been passed.
- The seventh international school “SISB International Rangsit” project, which would add 1,000 new seats, is worth THB 300 million. The school would use a 35% cheaper tuition model from the usual THB 500,000-600,000 tuition fee, while maintaining its exceptional academic quality. Presently, the land has been purchased and transferred, and the school is currently being designed.
SISB has increased their tuition fee for the academic year 2024/2025 by 5%, and the fee for the academic year 2025/2026, which would be announced in the mid-year before the first semester (August 2025), would maintain the tuition increase rate at 3-5% just as it were since the foundation of the school. In the future, the 3%,4%, and 5% rise in tuition fees would spark questions about the margin. SISB has calculated that the increased fee would have no significant effect on the margin and that the rising fee is rather an adjustment according to the economic condition. The company has always been accounting for the student’s parents along with the economic climate.
Krungsri Securities has changed its recommendation from “Speculative Buy” to “Buy” on SISB’s stock while maintaining the target price for 2025 at THB 35. The reason is that the price has plummeted considerably, thus being a good opportunity to invest when compared to a downside from the case that the enrollment is lower than expected. KSS noted that 90% of SISB income is regular income, while having a growth opportunity from student count and new school branches.
While the director may announce that in 2025, SISB will increase the tuition fee for the new semester in August 2025 by 3% compared to a 5% rise in 2024, due to economic uncertainty affecting purchasing power, and the company may also put a target for 400 new student, with 5,000 total student at the end of the year. The director may see challenges from the economic condition and news of dangers to Chinese people in Thailand. At the end of 2024, SISB will have 4,600 students, a 10% increase from the previous year, 29% of which were foreign students, and 75% of said foreign students were Chinese.
Furthermore, the downside to net profit would mostly be evaluated from the new student count rather than tuition fees. The earlier week (13-15 January) saw SISB stock plunge by almost 20%, which could happen from concerns over the downside in net profit from student count missing the company’s goal, and this year tuition fees have increased less than 5%. The net profit estimate for SISB was based on the theoretical 400 new students per year and an annual 5% hike in tuition fees.
Nonetheless, the downside to net profit is likely to come from less than 400 new students rather than tuition fee adjustment, as the fee adjustment would happen in the new semester and students move to higher grades, making average earnings from tuition fees higher than earnings from the annual fee adjustment. According to KSS, every 10% of the empty seats would affect the net profit in 2025-2027 by 2% and 3% respectively.
