Oppenheimer Moves Noah Education Holdings To Not Rated

Oppenheimer has published a research report on Noah Education Holdings NED after the company's co-founder offered to purchase the company's devices business on Friday. In the report, Oppenheimer writes "Friday after the close, NED announced the receipt of an offer for its devices business (72% of FY11E rev) from co-founder Benguo Tang, for RMB 90-120M. We understand that NED has been searching for strategic alternatives for its devices segment, which has been performing weakly (-62% y/y in FY11E) due to tough competition and slow recovery of its distribution network. Overall, we view the potential spin-off as a positive for NED as it shifts focus to its faster growing/higher profitability education services business (kindergarten, schools, and after-school tutoring services). We are removing our Perform rating and moving to Not Rated, as NED stock will no longer trade on fundamentals but on progress/likelihood of the proposed offer." Oppenheimer has moved Noah Education Holdings to Not Rated, and the company closed Friday at $2.05.