Overview of events
The company announced that in the first half of 2021, the company's revenue was 1.238 billion yuan, an increase of 128% over the same period last year, and an adjusted net profit of 440 million yuan, an increase of 75% over the same period last year, slightly higher than our previous forecast (revenue of 11.5-1.2 billion yuan, adjusted net profit of 3.7-400 million yuan). The gross profit margin is 59%, year-on-year + 2pct, sales / management / financial expense rate 8%, 17%, 5%, year-on-year + 7/+1/-3pct. The company also announced that it will build a new ecology of "Internet +" vocational education.
Analysis and judgment
According to the split of income, the 2021H1 tuition / accommodation fee is 61.0 million yuan, an increase of 17% 132% over the same period last year. In addition, the income from distance education / teacher training / online courses / sales of books / other education services is 4.6 pound 0.35 pound 0.51 million yuan, which was not consolidated in the same period last year, mainly in December 2020 and January 2021 after the company acquired Aopeng Education and Capital Learning Network in 2020. (1) the total income and net profit of these two new consolidated projects are estimated to be 100 million in 2020, which are mainly academic education and vocational education, and are not affected by the current education policy. (2) in addition, the growth of adult college enrollment is higher than that of general college enrollment since 2018.
According to our analysis, the higher-than-expected growth of Aopeng's net profit on education is mainly due to: (1) the net interest rate has increased, before the net interest rate was less than 8%, but the company has done a lot of cost optimization and product diversification after the acquisition, and it is estimated that the current net interest rate is about 10%. (2) in terms of income growth, the company's online academic education was mainly aimed at more than 30 universities in 985 and 211, and opened the Open University plate and the private university section in 2021, bringing significant growth. In the long run, considering that the net interest rate of Duxue is higher, we judge that the online education sector is expected to grow by 20-30%.
From the perspective of the new ecological construction of "Internet +" vocational education, the company has become one of the largest "Internet +" vocational education groups in China, with six platform brands: online ╱ Aopeng Education of Radio and TV University, MBAChina ╱ Network, Mutu.com, Xiaoai Science and Technology, Silk Road HSK online examination, and Minsheng online. It covers online comprehensive academic education services, professional degree postgraduate education services, Internet IT professional personnel training, human resources and employment services, international Chinese education and examination services and other areas. In the future, on the one hand, we will adhere to the growth flywheel of the combination of endogenous growth and exogenous growth, on the other hand, we will build a "full-scene education network world" through digital and intelligent drive-including digital brain, digital stores, knowledge production factories, and digital content banks. The specific implementation is divided into 2021-22 integration period, 2022-24 upgrading period, and opening period after 2024.
Profit forecast and investment suggestion
In the future, on the one hand, Aopeng has made a significant contribution, and the growth of online education has exceeded expectations. In addition, Chongqing Institute of Humanities and Science and Technology has been affected by the evaluation. Paisi College of Chongqing Industrial and Commercial University and Yunnan Dianchi College are expected to see an increase in volume and price after the conversion. However, we are cautiously optimistic about the growth of school places this year. Maintain the forecast of $100 million in 24-28-33 and raise the adjusted net profit from $80.93 million to $73max (taking into account the better-than-expected net profit from online education); maintain the "buy" rating and raise the 21-year target price from HK $1.87 to HK $2.30 (corresponding to 11 times PE for 21 years).
Risk hint
The risk of educational policy change; the process of self-construction and M & An is not as expected; the number of students enrolled is less than expected; systemic risk