KUALA LUMPUR: After getting the go-ahead from shareholders to acquire a 70% stake in Cyberjaya University College of Medical Sciences (CUCMS), SMR Technologies Bhd will grow the new business by leveraging on its existing network to attract students from the Middle East.
“We can tap into our existing network there to bring in students from the six countries of the Gulf Cooperation Council where our recent key customers are,” chairman and chief executive officer Datuk Dr R. Palan said after its AGM.
CUCMS director Dr Mohamad Salmi Mohd Sohod said a typical medical course would cost US$200,000 (RM638,500) in the Middle East but the college was offering it at 60% to 80% of that price (from RM383,100 to RM510,800).
Coupled with strong security and relatively low cost of living in Cyberjaya, Salmi said the course would appeal to foreign students.
“Besides that, international students usually pay 30% more than local students,” he added.
He also said that the group would market itself in South-East Asian countries like Myanmar, Brunei and Indonesia in the future.
Palan said the institution’s niche was in medical sciences, which would help differentiate itself from other education groups.
“The doctor-to-population ratio is still very low in Malaysia compared to developed nations and that presents a vast opportunity for growth,” he said, adding that the payback period for the investment was five years.
He also said it would look into introducing new programmes and hoped to collaborate with more international universities in the future.
It had signed a memorandum of understanding with University of Ballarat, Australia, to provide a platform for both parties to collaborate on the design and development of some programmes.
According to Palan, education contributed 50% to SMR revenue while human resource professional services and human resource software 25% each.
With the accretion of the new education business, he expected the education segment’s topline contribution to grow to 60%.
The new education business came with a RM27.5mil price tag, which would be fulfilled by RM18mil cash and RM9.5mil novation of debt.
CUCMS made a net loss of RM1.3mil in 2012 and RM4.9mil in 2011 mainly due to an isolated incident of recruiting students exceeding its quota. As a result, it had to pay a compensation of about RM2.69mil.
Palan said the education provider had seen strong records in the last eight years.
“The first quarter results was well and we believe it will add tremendous value to the group,” he said. The acquisition is expected to be completed by end-August.