Shares of Raffles Education Corp are up a staggering 89 per cent so far this year which, to the uninitiated observer, may suggest that the education group is going great guns.
The reality is that the share price is supported more by hopes of a bidding war between businessman Oei Hong Leong and Raffles Education founder Chew Hua Seng than any strong fundamentals.
Education companies have largely fallen out of favour with investors as revenues decline and a few have seen their profits turn into losses.
Shares of Informatics Education and TMC Education are down 51 per cent and 20 per cent respectively so far this year. Shares of Overseas Education (OEL) are up 4 per cent.
Apart from OEL, which paid a 2-cents-a-share dividend for 2016 in May and has a trailing price-to-earnings ratio (PE) of 34, none of the other three has a PE ratio to speak of because they are loss-making.
Shares of Raffles, TMC and Informatics were chased up by investors to an all-time high about a decade ago on the premise that Singapore would become an education hub in Asia.
This has not panned out.
On the contrary, the private education sector, except for those that cater to private tuition and academic enrichment, has shrunk.
In tertiary education, competition for students is stiff. Singapore now has six public universities, up from three in 2000 when Singapore Management University opened.
At TMC, revenue in the last 12 months is down 31 per cent from a year ago, owing to lower student enrolment. Its auditors have flagged a going concern issue.
Compliance costs have also risen since the Committee for Private Education (CPE) was set up in 2009 to separate the wheat from the chaff.
For instance, Informatics Academy regained its four-year EduTrust certification status only in December last year after losing it two years before that.
Informatics, which has seen student enrolment fall over the last year, noted in its annual report that the number of commercial schools here has "declined significantly" over the years: "In 2016, 25 schools deregistered with the CPE and in 2015, 18 schools closed down."
As of June this year, there were 290 private schools registered with the CPE.
Raffles, Informatics, TMC and OEL all blame industry challenges for their falling numbers but their management too has a part to play.
Raffles Education began diversifying out of China 10 years ago since rules restricting foreign control of education providers were introduced, but its expansion into Australia, Europe and the region has been criticised by shareholders as lacking in focus, with property revaluation gains propping up the group's results each year.
Informatics, on the other hand, was rocked by an accounting scandal in 2004 that it never recovered from. Notably, Mr Oei invested in Informatics after its price crashed, then sold off his entire 13.72 per cent stake in 2005 at a loss. He has a hit-and-miss track record.
OEL operates Overseas Family School, a private foreign system school (FSS) here for children aged two to 18 of primarily expatriate parents. Competition among pre-schools and international schools is also heating up.
OEL's net profit fell 16.5 per cent from a year ago to $2.9 million in the six months to June 30. It noted: "FSS in Singapore is, to a large extent, dependent upon the ability of Singapore to continue to attract foreign direct investments."
Despite these companies' woes, they are not the bellwether for the education industry, say experts.
It is likely that the ones that have sustainable profits are not listed on the Singapore Exchange. For example, there are no listed proxies for investors who want to bet on the enrichment and tuition sector.
Education remains a booming business, with families spending $1.1 billion a year on private tuition at the last count in 2013, with spending expected to climb higher even as the next five-year household expenditure survey is being carried out.