Introduction:
Raffles LaSalle is a private education provider in the area of creative design
and management. Their colleges conduct a range of design programs specializing
in fashion design, interior design, visual communications (graphic design) and
multimedia design which includes 3D animation, web design and video editing;
and also management programs in design management, fashion marketing and business
administration. Students choose from a two-year intensive diploma program with
an intensive one-year add-on to degree level, bachelor degree programs and postgraduate
degree programs on behalf of the Curtin University of Technology and the Middlesex
University. Degrees are issued either by LaSalle College International Holdings,
or by the respective universities.
LaSalle Colleges enrolled about 750 full-time students in the design programs
and about 280 full-time students in the management programs. They currently
operate five colleges, one in Singapore and four in China. The China colleges
are located in Shanghai, Beijing, Huizhou and Changchun. They also manage a
colleges for their associated company, LaSalle International Design School (Kuala
Lumpur, Malaysia).
Financially, Raffles LaSalle has shown steady growth, with revenue of S$6.8
million in FYjun1999 increasing to S$12.4 million in FYjun2001. Net profits
after tax increased from (S$0.2 million) in FYjun1999 to S$2.4 million in FYjun2001,
resulting in a net after-tax profit margin during FY2001 of just under 20%.
IPO Details:
Total Shares Offered: 12 million
All Shares Placed Out, No Public Offer
Placement Price: S$0.21/share
IPO Manager: UOB Asia Limited
Estimated Net IPO Proceeds: S$1.22 million, to be used as follows:
- Set up SaSalle-Guangzhou college in China (5th China location)
BUSINESS OVERVIEW
Raffles LaSalle is a private education provider in the area of creative design
and management. Their colleges conduct a range of design programs specializing
in fashion design, interior design, visual communications (graphic design) and
multimedia design which includes 3D animation, web design and video editing;
and also management programs in design management, fashion marketing and business
administration. Students choose from a two-year intensive diploma program with
an intensive one-year add-on to degree level, bachelor degree programs and postgraduate
degree programs on behalf of the Curtin University of Technology and the Middlesex
University. Degrees are issued either by LaSalle College International Holdings,
or by the respective universities.
LaSalle Colleges enrolled about 750 full-time students in the design programs
and about 280 full-time students in the management programs. They currently
operate five colleges, one in Singapore and four in China. The China colleges
are located in Shanghai, Beijing, Huizhou and Changchun. They also manage a
colleges for their associated company, LaSalle International Design School (Kuala
Lumpur, Malaysia).
Raffles LaSalle has signed collaboration agreements with the Curtin University
of Technology and the Middlesex University to conduct or to facilitate their
design and design management degree programs, which include:
- Bachelor of Arts in Design (Graphic Design) (the Curtin University of Technology);
- Bachelor of Arts in Interior Architecture (the Curtin University of Technology);
- Bachelor of Arts (Honors) in Fashion Design (the Middlesex University);
- Bachelor of Arts (Honors) in Visual Communication (Graphic Design) (the
Middlesex University);
- Bachelor or Arts (Honors) in Visual Communication (Multimedia) (the Middlesex
University);
- Master of Arts in Design (Professional Practice) (the Middlesex University);
- Master of Arts in Fine Art (Professional Practice) (the Middlesex University);
On October 14 1999, Raffles LaSalle acquired da Vinci Institute. This institute
had developed programs that were accredited by the New South Wales Vocational
Education and Training Education and Training Accreditation Board based on the
Australian Qualification Framework. On 14 August 2001, Raffles LaSalle set up
an associated company, Raffles LaSalle-Thailand. On 10 September 2001, DHU International
Design College formed a collaborative agreement with Guangzhou University in
China.
COMPANY
HISTORY
The company was initially formed as Sinotani China Pte Ltd in 1994, and converted
to a public limited company under the name Raffles LaSalle Limited on 8 June
2001. In April 1990, Raffles LaSalle-Singapore was set up as a joint venture
between Prof Chew and LaSalle College Group Inc, an education group based in
Montreal, Canada. Because creative education was new in Singapore, the company
was offered grants from the Economic Development Board and Canadian International
Development Agency in the first year of operation. About 50 students enrolled
in 1990 and steady growth has increased enrollment to about 1,030 students in
five colleges (4 in China) by 2001.
BUSINESS MODEL
Raffles LaSalle's goal is to become the leading private education provider
in creative design in the Asia Pacific region. Their strategies to achieve
this status include:
- to seek opportunities to collaborate with renowned foreign universities
to offer their graduate and postgraduate programs;
- to develop and own programs and to get these programs accredited by the
relevant authorities; and
- to expand their network of colleges in the Asia Pacific region.
IPO VALUATION
This placement offer will increase outstanding shares from 66,571,429 to 78,571,429,
and effectively dilute FYjun2001 earnings to 2.59 cents/share, resulting in
a historical fully-diluted PE of 8.1. The prospectus shows FY01 EPS (using
pre-invitation share numbers) of 6.86 cents/share and PE 6.86.
FINANCIAL PERFORMANCE
| S$'000 |
FYjun99
|
FYjun00
|
FYjun01
|
| Turnover |
6,821
|
10,710
|
12,388
|
| Registration
and examination fees |
(108)
|
(76)
|
-
|
| Depreciation |
(500)
|
(768)
|
(807)
|
| Salaries |
(3,489)
|
(4,114)
|
(4,890)
|
| Marketing
and advertisement |
(364)
|
(454)
|
(478)
|
| Rental |
(1,159)
|
(1,349)
|
(1,213)
|
| Other operating
expenses |
(1,297)
|
(1,395)
|
(2,241)
|
| Operating
profit/(loss) |
(96)
|
2,554
|
2,759
|
| Interest
expense |
(4)
|
-
|
(76)
|
| Other income |
15
|
114
|
261
|
| Profit/(Loss)
before tax |
(85)
|
2,668
|
2,944
|
| Tax |
(150)
|
(401)
|
(493)
|
| Profit/(Loss)
after tax |
(235)
|
2,267
|
2,451
|
| Minority
Interest |
-
|
-
|
(53)
|
| Profit/(Loss)
attributable to Group |
(235)
|
2,267
|
2,451
|
MANAGEMENT / LEADERSHIP
Prof Chew Hua Seng, Chairman and CEO
Prof Chew, founder of the Group, is responsible for the overall management
and business development of the Group. He was appointed as a consulting professor
of the Garment College of Donghua University, China, on 20 January 2000. In
addition to pioneering the Group's first college, Raffles LaSalle-Singapore,
Prof Chew also set up one of the pioneer international design colleges, DHU-LaSalle
in China. With the other directors, he sets the strategy and vision for the
Group. He has played a key role in the development and growth of the Group's
operations over the past 11 years. Prof Chew holds a Bachelor Degree in Business
Administration from the then University of Singapore.
Chen Wei Ping, Executive Director
Mr Chen currently holds directorships in several companies in Singapore
and China. He was appointed (November 1998) to oversee the China operations
and sits on the Board of Directors of Raffles-BICT, Raffles-HU, and DHU-LaSalle.
Prior to this appointment, Mr Chen held positions as the Director of Business
Section in the Planned Economy Committee of Jilin Province, the Vice Manager
of Jilin Provincial Livestock Corp and the General Manager of Jilin Provincial
International Industry & Commerce Corp. Mr Chen holds a Bachelor Degree
in Economics from Jilin Finance and Trade College (PRC) and a Master Degree
in Economics from Jilin University (PRC).
Jacques Adelard Lefabvre, President of LaSalle College Group
Mr Lefabvre has provided consultancy services to the Group since 1990.
He is the President and controlling shareholder of LaSalle College Group,
a private company with many local and international affiliates in the areas
of education, training, international project management, multimedia, real
estate and software development in Canada, Asia, the US, Europe, South America
and Africa. He holds a Bachelor degree in Science from Laurentian University
(Canada), a certificate in Business Administration from LaSalle Extension
University (Chicago), and an Executive Development Program certificate from
Cornell University (USA).
Henry Tan Song Kok, Independent Director
Prof Han En Ye, Independent Director
COMPETITION
Raffles LaSalle competes for students with all universities, public and private
tertiary institutions that offer similar programs. Their major competitors
in the countries they operate in include:
DESIGN PROGRAMS
- Singapore
- Temasek Polytechnic
- Nanyang Academy of Fine Arts
- LaSalle--SIA College of the Arts
- China
- Haisu Art Design College of Continuing Education in Shanghai
- Beijing Modern Art College
- Jilin Art College in Changchun
MANAGEMENT PROGRAMS
- Singapore
- All polytechnics, universities and private education institutions
- Shanghai
- Bangde College
- Lansheng Foreign Economic Relations & Trade
- Zhendan College of Continuing Education
- Qiusuo College of Continuing Education
- PCEC Holmes College of Continuing Education
- Private education providers
- Beijing
- Delter International Business School
- Beijing Lauderate Institute
- Beijing American Management College
- Beijing INTI Management College
- T.E.D. Management Studies School
- Beijing Dangpei Institute of Study
- Beijing LianShan International Training Center
- CIBT School of Business
- Beijing Agriculture University
- Mechanical Industry Management College
- Beijing Overseas Chinese College
- Beijing International Institute of Business
- Beijing Yuda Institute of Business
- Beijing Management and Training Center
- Private education providers
- Huizhou
- Guangzhou Peizheng College
- Nanyang English School
- Gold Key School
- Foreign Trade & Language College Training Center
- Shenzhen Mid-South Financial College
- Shenzhen College
- Shenzhen Garment Corporation Training Center
- Shenzhen Overseas Studying Services Center
- Private education providers
- Changchun
- Changchun Post Lampton College
- Changchun Tax College
- Yanbian Science & Technology Unviersity
- Private education providers
RISK FACTORS
The following risks were discussed in the IPO Prospectus (we recommend you
read the entire prospectus):
- Registration of Raffles LaSalle-Singapore with the MOE
- Changes in Education Policies
- Initial Gestation Period for New Universities
- Continuing Collaboration with China Universities
- Collaboration with LaSalle College Group
- Collaboration with Foreign Universities for Graduate and Postgraduate
Degree Programs
- Dependence on Key Personnel
- May have to Relocate the Operations of Raffles LaSalle-Singapore
- DHU-LaSalle--Tuition Fee Collection Permit
- Risks relating to the Chinese legal system, tax system, political system.
- Foreign exchange risks
- Competition
- Risks relating to the new shares
Major Shareholders
As of the Placement Date (post-placement):
Chew Hua Seng: 41,580,000 shares (52.92%)
Chung Gim Lian (Prof Chew's wife): 2,520,000 shares (3.21%)
Chen Wei Ping: 18,900,000 shares (24.05%)
LaSalle College International: 3,571,429 shares (4.55%)
Public: 12,000,000 shares (15.27%)
MAJOR CUSTOMERS
Students
