21H1's revenue was 882 million, up 54.65%, mainly due to the increase in income from integrated education services, and mainly driven by the increase in revenue from Tianli's own schools.
Specifically, according to the income category, the income from educational services is the core source. 21H1 education service income was 683 million yuan (77.38%), up 48.12%; restaurant operating income was 188 million yuan (21.35%), up 74.75%; travel service income was 4.74 million yuan (0.54%); management and franchise fee income was 4.676 million yuan (0.53%), an increase of 155.94%; and supply chain management service income was 1.816 million yuan (0.21%).
Gross profit increased by 50.18% with a 413 million increase; gross profit margin by 46.84% was the same as minus 1.40pct, which was caused by the normal opening of schools after the resumption of the epidemic and an increase in daily operating-related costs compared with the same period last year. The net profit increased by 30.23% with 274 million, and the net profit returned to the mother was 270 million yuan with an increase of 29.31%. The performance continued to grow steadily and rapidly.
In terms of contractual liabilities reflecting the operation of pre-received education services restaurants, the contractual liabilities of 21H1 as of 615 million yuan were reduced by 14.70%.
From the perspective of reflecting the deferred income of subsidies, 21H1 received 493 million yuan in new subsidies, 139 million yuan in carry-over subsidies (profit and loss), and retained 128 million yuan at the beginning of the comprehensive period, totaling 1.636 billion yuan at the end of the period.
With its solid layout in Sichuan Province, Tianli School is located in 20 cities in Inner Mongolia, Shandong, Henan, Guizhou, Jiangxi, Zhejiang and Yunnan. As of 21H1, Tianli owns and operates 26 self-owned schools and provides management services for 6 trusteeship schools.
As of 21H1, the number of students enrolled in self-owned and entrusted schools in the school network has increased by 42.5%. The increase is driven by the increase in enrolment in existing schools (the utilization rate will continue to increase) and the increase in enrolment in newly opened self-owned schools.
After 21H1 entered into 6 agreements and H1 entered into 3 agreements, which are located in Sichuan, Henan, Guangdong, Hunan, Guangxi, Yunnan, Shandong and Shaanxi, the number of places will be increased by approximately 24000 students.
Tianli has developed a centralized and standardized management system, and the company is convinced that the school management system is essential to business success as it helps to integrate resources, enhance operational efficiency and maintain the standard of educational services. With Tianli's management system, the company has been able to rapidly expand the school network to a new geographical location, while at the same time implementing quality standards in the school network.
Looking forward to the future, Tianli will expand and strengthen for-profit high schools, provide diversified further education services for students, and persist in strategic expansion throughout the country. The company is committed to improving the quality of teaching and optimizing the "six-stand-one-up" education system. Strive to provide better services to students and parents through excellent school management and the professionalism of teachers. As a comprehensive education service operator, the company aims to assist public education and contribute to the future pillars of society.
Maintain earnings forecasts and give buy ratings
Tianli effectively enriches the local education supply by virtue of its own school-running experience, and improves the operational efficiency with the help of the unique flexible advantages of the private sector; on the other hand, it will effectively reduce the pressure on local finance, and most local governments across the country adopt a positive and welcoming attitude towards private education. We are always optimistic about the Tianli model and recognize its remote output and replication of high-quality educational resources.
We estimate that the annual income of Tianli FY21-22 is 1.8 billion yuan and 2.4 billion yuan respectively, the net profit is 530 million yuan and 720 million yuan respectively, the EPS is 0.24 yuan and 0.33 yuan respectively, and the corresponding PE is 7xPE and 5xPE respectively.
Risk tips: lower-than-expected enrollment, loss of core executives, fierce market competition, etc.