双威教育（CAST）股票最近表现疲软，我们认为是近期有关其以往收购和中国小盘股市场的低风险承受能力的争论造成的。双威教育内部控制缺陷得到证实可能会强化这种情绪。尽管如此，我们认为其控制上的缺陷可以弥补，其业务基本面依然表现强劲。我们认为，双威教育目前的股价（企业价值倍数EV/EBITDA为三倍）是一个合适的买入机会，并且其负面因素被公司强大的资产负债表和股票回购计划所抵销。
主要亮点
TUG（？）仍然是该公司增长的主要动力。我们预计，在对湖北工业大学商贸学院（HIUBC）的收购及青少年人数有机增长带来入学率上升的推动下，2011年该公司这一业务将增长37％。该公司在2011年很可能完成一项新的收购。
国际合作将加速。该公司今年计划将暑期国际交流项目的招生规模增加三倍，至750名学生；今年该公司还将通过与西顿霍尔大学和北卡罗来纳大学格林波若分校(UNC，Greensboro)t建立伙伴关系，继续扩大其学位教育项目。我们预计，该公司在未来几年来自国际合作的收入将从目前的50万美元增长至数百万美元。
公司内部控制得到改善。关于10—K报告证实的两个缺陷，公司管理层承诺，将投入更多的资源加强财务/会计队伍建设，有关该公司董事会某些决定的说明文件已得到补充并备案。
Roth/CAST: CAST: Raising Est’s; Reiterating BUY on Fundamentals and Compelling Valuation
We attribute the weakness of CAST shares to recent controversy over its previous acquisitions and lower risk tolerance in the Chinese small-cap space. The identified deficiencies in internal control may intensify this sentiment. Nonetheless, we believe the control deficiencies are remediable and business fundamentals remain strong. We view current price level as an attractive entry point (3.0x fwd EV/EBITDA) with the downside protected by the company’s strong balance sheet and share repurchase plan.
Key Highlights
TUG still the major growth engine. We project 37% revenue growth in 2011 for this line of business, driven by the acquisition of HUIBC and low-mid teens organic growth primarily from enrollment increase. The company is likely to sign a new acquisition in 1H11 per management.
International programs set to accelerate. The company plans to triple the size of its summer exchange program to ~750 students this year and continue to expand its degree programs building upon partnership with Seton Hall University and UNC (Greensboro). We expect revenue contribution will grow from over $0.5MM to multi-millions over next couple of years.
Internal control to be improved. Regarding the two deficiencies identified in the 10K, management promised to put more sources to strengthen the finance/accounting team and indicated documentation of certain decisions made by the Board has been supplemented and put on file.