School

Over the past few days, the criticism had been increasing day by day over high initial public offering (IPO) price of SISB Public Company Limited (SISB), 17-year old company in educational business. SISB offers 260 million shares with a par value of ฿0.50/share, and the IPO price at ฿5.20/share. The share is expected to be traded in “mai” on November 29, 2018. The criticism was due to the IPO price at ฿5.20/share, which is 59x of P/E. The number has led to the question whether the price is too high or not. Moreover, the data also indicated that a total of 166 million shares or 17.71% of SISB’s shares are not on the silent period. The first trading day will be very crucial to SISB if it faces a huge selloff. Mr. Somphop Keerasuntonpong, director of Finansia Syrus Securities, which serves as financial advisory of SISB, has revealed to “Kaohoon Online” through Facebook Live and FM 102 MHz. that the IPO price and the considerably high 59x P/E are calculated from SISB’s operation for the past four quarters. Mr. Somphop asserts that school businesses are the business that has constant earning from the number of student that increases continuously. He also adds that business in education is an interesting business, supporting with its constant growth. “The majority of SISB incomes are from tuition fees. In 2015-2017, SISB had 1,532, 1,705, and 2,061 students, respectively. For the first nine months of 2018, the school had 2,334 students. The school had also expanded its capacity from 2,150 students in 2016 to 3,120 students in 2017, and to 4,175 students in 2018,” said Mr. Somphop. Regarding all the worries of a selloff on the first trade day, Mr. Somphop has asserted that the major holders certainly will not do such thing as they have been in the business for 17 years. As for the low book value, Mr. Somphop clarifies that the adjustment in statement is due to the request from SEC to solely meet with the new accounting standard in 2019, and to submit the filing to SEC for selling IPO. Lastly, Mr. Somphop states that ฿600 million that the company made from selling IPO will be used to settle the debt, which will save the company from ฿30 million worth of interest that SISB could use the amount for business development in the future, and will turn SISB into a debt-free company. As for the remaining ฿700 million from selling IPO, the amount can be used to strengthen and further the business. In 2015-2017, SISB and its subsidiaries earned ฿543.92 million, ฿623.49 million, and ฿785.38 million, respectively. The revenue from tuition fees are 90% of SISB’s total earning, while the net profit was ฿76.51 million, ฿84.73 million, and ฿59.60 million, respectively.