On August 30, the company released its 2021 interim results. 2021H1 achieved 231 million yuan in revenue, down 39.90% from the same period last year, and its mother's net profit was 83 million yuan, down 29.63% from the same period last year.
Look at the business by business
The 21H1 income of the higher education (media and arts) and vocational education division was 212 million yuan (91.6%, compared with the same period last year + 43.0pct), an increase of 13.4% over the same period last year, due to the increase in the total number of students.
The 21H1 income of the Media, Arts and Vocational training Division is 15 million yuan (6.6%), which mainly includes the income generated from Shuimuyuan from the date of completion of the acquisition (that is, April 6, 2021) to June 30, 2021. The peak business season of Shuimuyuan is generally from July to February of the following year. As of 21H1, Shuimuyuan recorded a contract liability of about 110 million yuan, most of which is expected to be recognized as training service income in 21H2.
The 21H1 income of the Film and Television production and Investment Division was 4.16 million yuan (1.8%, year-on-year-49.6pct), a decrease of 97.9% compared with the same period last year. This decrease is mainly due to the TV series "Kunlun Silk Road Treasure" (group investment 50%), "unparalleled beauty" (group investment 30%), "Don't call me Dionysus 2" (group investment 50%) and "ideal house" (group investment 55%). Delivery is expected to be completed in 21H2. And these TV series did not generate revenue in 21H1, and as of 20H1, the first round of distribution of "Shici", "Chaoge" and "Don't call me Dionysus" recorded license fees.
2021H1's gross profit was 140 million yuan, down 21.30% from the same period last year, with a gross profit margin of 60.56%, an increase of 14.29pct over the same period last year, mainly due to changes in the income mix, including an increase in income from higher education (media and arts) and vocational education.
The gross profit margin of higher education (media and arts) and vocational education business was stable at 63.8%, an increase of 1.7pct over the same period last year, mainly due to the increase in vocational education income.
The media, arts and vocational training business recorded a gross profit of $900000, mainly due to the acquisition of Shuimuyuan's gross profit during the period from the date of completion of the acquisition (i.e. 6 April 2021) to 30 June 2021.
The gross profit margin of the film and television production and investment business was 93.5%, an increase of 62.2pct over the same period last year, mainly due to changes in the income portfolio of the business division.
2021H1's net profit was 92 million yuan, down 28.10% from the same period last year, and the net interest rate was 39.62%, an increase of 6.48 pct over the same period last year; the adjusted net profit was 99 million yuan, down 30.80% from the same period last year, and the adjusted net interest rate was 42.77%, an increase of 5.64pct over the same period last year.
According to the current internal records of the number of students enrolled and the number of freshmen enrolled, the company expects the total number of students in its universities to increase by at least 30% in the 22nd academic year compared with the 20max 21st academic year.
Looking ahead, the Group will continue to expand the scale of its higher education (media and arts) and vocational education business, produce and invest in quality content films and TV dramas. The company will accelerate the development of media art training business and explore vocational training opportunities. While expanding endogenous growth, we will actively carry out M & A plans in higher education, vocational education and non-disciplinary training business to create maximum returns for the company's shareholders.
Downgrade earnings forecast and give buy rating
The company's business includes higher education (media and arts) and vocational education, media, arts and vocational training, as well as film and television production and investment. Due to the uncertainty of the non-expected increase in tuition fees and the contribution of film and television business performance in the 21st 22 academic year, we expect the company's annual income for 21-22 to be 1.03 billion RMB and 1.34 billion RMB respectively, and to reduce the company's net profit from 500 million RMB and 650 million RMB to 430 million RMB and 540 million RMB respectively in 2021-22. EPS is 0.30,0.39 yuan respectively, down to 0.26,0.32 yuan respectively; PE is 9xPE and 7xPE respectively.
Risk tips: the enrollment is not as expected, the fee increase is not as expected, the market competition is fierce, and so on.