        Net profit: KWD9.2mn, +2% Y-o-Y, +18% Q-o-Q, +2% vs. EFGe
        Revenue: KWD19.3mn, +7% Y-o-Y, +21% Q-o-Q, +3% vs. EFGe
        Gross profit: KWD14.8mn, +7% Y-o-Y, +15% Q-o-Q, +3% vs. EFGe
        EBITDA: KWD11.1mn, +5% Y-o-Y, +16% Q-o-Q, +9% vs. EFGe
 
Humansoft reported its 4Q18 results, with headline net income up 2% Y-o-Y (+18% sequentially). Earnings came in broadly in line with our estimate (+2% vs. EFGe). Growth was impaired by some non-recurring items in 4Q17 other income; excluding these, earnings would be up 8% Y-o-Y. FY18 earnings increased 12% Y-o-Y to KWD31.5mn. Revenue during the quarter grew 7% Y-o-Y (+21% Q-o-Q), driven by higher student numbers and was also broadly in line with our estimate (+3%). The company had announced that the total number of enrolled students for Fall 2018 (2018-19 academic year) grew 5% Y-o-Y to 12,356 students. FY18 revenue increased 12% Y-o-Y to KWD69.3mn. Headline gross margin was almost flat (-10bps Y-o-Y) at c76.6% (vs. EFGe 77.0%) with gross profit +7% Y-o-Y (+3% vs. EFGe), mainly as staff costs growth (+8% Y-o-Y) was slightly higher than revenue growth (+7%). EBITDA margin narrowed a stronger c1.2pp to 57.3%, with EBITDA growing 5% (+9% vs. EFGe), despite lower SG&A costs (-1% Y-o-Y, -12% vs. EFGe), mainly on lower other income (-83% Y-o-Y as 4Q17 included a one-off settlement to a contractor of KWD500k).
 
The BoD proposed a DPS of KWD0.185 for 2018, which is higher than the DPS of KWD0.16 of last year (EFGe: KWD0.19), implying a DPO of c72% and a dividend yield of 5.7%. 
 
Overall, a decent set of results, with no major surprises. We have a Buy rating on Humansoft (one of our top picks), as it is a unique pure-play education name in MENA and frontier with an impressive profitability profile (net margin: 40%+, RoAE: 80%+), and valuation remains very attractive. 

Hatem Alaa, Mirna Maher
 
Humansoft: KWD3.25 as of 29 Jan 2019, Rating: Buy, TP: KWD6.30/share, MCap: USD1,324mn, HUMANSFT KK/HUMN.KW