Sasbadi cashes in on new Form 3 format

  • Business
  • Monday, 30 Jun 2014

PETALING JAYA: The scrapping of the mandatory Penilaian Menengah Rendah (PMR) examination has turned out to be a positive development for Sasbadi Holdings Bhd, which is en route to a listing on Bursa Malaysia over the next few months.

Deriving most of its income from the publication of syllabus-based content, managing director Law King Hui said its new product Pentaksiran Tingkatan 3 (PT3) was selling like hot cakes in the market because students and parents were anxious over the change in assessment format.

This year the Education Ministry has replaced the nation-wide Form Three examination, PMR, with a school-based assessment system called PT3.

“In fact, we see a surge in sales from the new workbooks. As we are fast to react to the changes, we are able to launch the workbooks very quickly, which gave us a first mover advantage,” he told StarBiz.

From 2010 to 2012, the company managed to sell 34 million books, stamping its leading position in the syllabus-based workbook market.

Of its editorial team, 40% are teachers while 60% are in-house editors or writers with relevant qualifications.

“Over the years, we have evolved into an education solutions provider from just publishing workbooks due to the content we have accumulated over the decades,” Law said.

Law founded the company with his partners Lee Swee Hang and Lee Eng Seng in 1985.

Having grown organically, Sasbadi is now looking at mergers and acquisition (M&A) as part of its expansion strategy.

“For instance, we are not big in the Chinese school syllabus segment,” he said.

He added that it would like to grow its Malay book market as some of the novels were well-received, selling over 100,000 copies.

“We will buy something that fits into our business portfolio and will avoid direct competitors so that we do not cannibalise our own market,” he explained.

Sasbadi already has a digital platform for its products and expects to grow it as it forsees digital learning in classroom becoming more widely practised.

Sasbadi has some 30,000 paying subscribers for its online content offerings, said Law.

For its financial year ended Aug 31, 2012, its revenue stood at RM64.8mil while profit was RM10.9mil.

“Our profit margins are quite consistent due to our economies of scale and ability to plan,” he said.

Workbook titles will be sold off as scrap after three years as they become outdated.

In its prospectus, the company pointed out that returned items, which could not be sold after a period of time posed a risk of the company holding obsolete stock, that might in turn affect its operational results.

For Sasbadi’s initial public offering, it will issue 21.2 million new shares and offer up to 35.95 million existing shares.

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