• Returning to net cash through asset monetisations, Raffles Education (RE) will focus on growing its K-12 presence in ASEAN. The increasing regionalisation of higher education within ASEAN, driven by easing immigration policies within Asia and restrictive immigration policies in the UK and US, will support RE’s expansion.
• RE is growing its K-12 platforms in Thailand (RAS Bangkok expansion), Malaysia (RAS Iskandar) and Indonesia (new K-12 school in Jakarta). To fund this growth and further deleverage, we estimate RE’s planned asset sales yielding over S$500mn of gross proceeds (Figure 1). Divesting these lower-return China assets (revenue return on non-current assets: China 9% vs ASEAN 22%) would improve group asset efficiency.
• We initiate coverage on Raffles Education with a BUY rating and target price of S$0.20. Our valuation is based on DCF analysis, using a 7% WACC and a 7.5x EV/EBITDA exit multiple based on peer comparables. Our TP is conservative, as our share count reflects dilution from warrants, and takes into account c. S$35mn of resulting cash proceeds. RE currently trades at c.11x FY27e EV/EBITDA. It is expected to be in a net cash position by FY27/28.

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