China Distance Education Holdings Ltd (DL), China’s largest online professional testing provider, is expected to continue to deliver significant top-line growth and an attractive dividend yield for the year, and will see continued success of its core accounting professional test, says Ella Ji, Executive Director and Senior Analyst at Oppenheimer & Co. Inc.
“DL is our top pick among macro names. It is China’s largest online professional testing services provider. The stock has run a lot in the past few months; now it’s above $10. If it pulled back on profit taking, we would certainly recommend people buying on any such potential weakness. DL has achieved very significant top-line growth in the past year, and also it looks like momentum continues for this year,” Ji said.
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DL‘s Accounting Professional Qualification Exam has seen cash revenue up over 50% as of last quarter and is expected to deliver more growth on a full-year basis, Ji says. With the company delivering an attractive dividend yield as well, DL one of Ji’s top picks.
“For one of its core tests, the Accounting Professional Qualification Exam, the cash revenue is up over 50% as of last quarter, and we think on a full-year basis they can easily achieve more than 30% growth for this core test. On top of this strong momentum, DL has been issuing a dividend of $0.48 per ADS in the past two years, so the dividend yield is around 4%, and that’s still very attractive. So we remain ‘outperform’-rated for this company,” Ji said.
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