Post our conference, we are more confident that management will be able to convert part of the upcoming installment for OUC (Oriental University City) to interest bearing loan. This should re-instill confidence on the counter and boost share price. Student enrollment remains firm. Reiterate Buy, TP: S$0.80.

Business Update at our “Pulse of Asia” conference. Raffles Ed management met with over 20 fund managers and buy-side analysts at our conference on Wednesday and provided insightful updates on their business.

OUC installment not an issue. Based on the meetings, management appears confident that they will be able to convert part of the upcoming S$100m installment into interest bearing loans. We believe the probability of success is high as it is beneficial for all parties – seller, banks and Raffles Ed.

Scrip Dividend Scheme should be approved. Raffles Ed’s management representative appears confident that the proposed SDS to be put before shareholders’ approval on 12 Jan 09 will be approved. The SDS provides alternative to shareholders to opt for cash or scrip. Investment banks and/or strategic investors will underwrite un-subscribed scrips.

Operations stable. Management shared that they have not witnessed any significant impact to operations and student enrollment continues to trend well. While they have seen some rise in private students asking for payment of fees in installment, management indicates that the proportion is insignificant to total student population. 1H09 results will be released on 5 Feb.

Reiterate Buy, TP: S$0.80. With more comfort and certainty that the deferment of the installment of OUC is in the bag, we believe this should provide a boost to share price. Furthermore, we believe education business will remain relatively resilient compared to other more cyclical businesses in the downturn. TP based on 18x FY09F PE.