Comments on China Xinhua Education (02779) 2021: continuing education has increased significantly, and the construction of the campus is progressing smoothly.

中信證券 · Sep 7, 2021 11:17

公司上半年收入/利润同比+19%/14%，表现超预期，主要系继续教育增长显著&全日制学生和学费提升。随着红山&临床医学院校区建设顺利，预计转设后有望增厚业绩。维持“买入”评级。

上半年收入/利润同比+19%/14%。1)收入及利润：1H21公司收入为2.90亿元/+18.5%，全口径收入(加上红山和临床医学院)为3.98亿元/+20.2%，增长来自在校生数&学费增加，以及去年同期住宿费退费1670.7万元(全口径下退费2139.1万元)。1H21净利润/经调整净利润分别为2.08/2.05亿元，同比+36.0%/+13.8%。2)成本及费用：1H21毛利率提升0.1pct至71.1%，相对平稳。行政开支下降-45%至0.34亿元，主要系股权激励费用&汇兑亏损减少。其他收入增长0.6%至0.49亿元，临床医学院及红山学院托管收益为0.24亿元/-3.2%。3)现金及负债：公司上半年短期借款增加0.47亿元至0.97亿元，长期借款增加1.92亿元至4.58亿元(其中1.97亿元为大股东提供的贷款)，有息负债率提升5.8pcts至14.7%。账面现金达4.89亿元。

继续教育招生增长显著，新华学院&临床医学院学费有所提升。1H21学费收入2.65亿元/+12.6%，住宿费收入0.26亿元/+155%。截至6月30日，公司在校生数达48554人/+10.5%，其中全日制在校生达42550人/+6.7%，本科生占77.7%。分学校看，1)新华学院：在校生人数为29685/+8.0%，其中全日制在校生达23681人/+1%，继续教育学生6004人/+49%。21/22学年本科新生学费由1.98-2.38万元提升至2.18-2.68万元；2)新华学校：全日制在校生人数为6093人/+8.2%；3)安徽医科大学临床医学院：在校生人数达到2,831人/+61.7%。21/22学年四年制本科新生学费由1.32-1.59万元提升至1.45-1.76万元，五年制本科新生学费由1.59万元提升至1.73万元；4)红山学院：在校生人数为9,945人/+9.8%。

红山&临床医学院校区建设顺利，预计转设后带来较大增量。1)21/22学年本科招生计划同比增长5.2%至11330人；2)临床医学院新校区一期以及红山学院新校区预计均在2021/22学年投入使用，其中临床医学院一期容量达5000人，红山学院一期容量达9000人。未来，随新校区投入使用以及两所学校转设并表，学额及学费均有望增加，预计会为公司带来较大的增量。

风险因素：行业政策变化、转设推进进度不及预期，以及学额增加不及预期等风险。

投资建议：考虑到公司上半年业绩增长超预期，上调公司2021-23年核心净利润对应的EPS预测至0.25/0.29/0.34元(原预测为0.24/0.27/0.31元)，参考公司历史估值中枢以及高教行业平均估值水平(10倍PE)，给予公司2021年8倍PE，对应目标价2.3港元，维持“买入”评级。

The company's revenue / profit in the first half of the year was 14% higher than that of the same period last year, which exceeded expectations, mainly due to the significant growth in continuing education & the increase in full-time students and tuition fees. With the smooth construction of Hongshan-Clinical Medical College campus, it is expected that the performance will be thickened after the conversion. Maintain a "buy" rating.

Revenue / profit in the first half is 14% compared with the same period last year. 1) income and profit: the income of 1H21 Company is 290 million yuan / + 18.5%, and the full-caliber income (plus Hongshan and Clinical Medical College) is 398 million yuan / + 20.2%. The increase comes from the number of students & the increase in tuition fees and the refund of accommodation fees of 16.707 million yuan (full-caliber refund of 21.391 million yuan) in the same period last year. The 1H21 net profit / adjusted net profit was 2.08 / 205 million yuan respectively, which was 13.8% compared with the same period last year. 2) costs and expenses: the gross profit margin of 1H21 has been raised to 71.1% by 0.1pct, which is relatively stable. Administrative expenditure decreased-45% to 34 million yuan, mainly due toEquity incentiveExpense-exchange loss is reduced. Other income increased by 0.6% to 49 million yuan, while the trusteeship income of Clinical Medical College and Hongshan College was 24 million yuan /-3.2%. 3) Cash and liabilities: the company's short-term loans in the first half of the year increased by 47 million yuan to 97 million yuan, long-term loans increased by 192 million yuan to 458 million yuan (of which 197 million yuan was provided by major shareholders), and the interest-bearing debt ratio increased by 5.8pcts to 14.7%. The cash on paper amounts to 489 million yuan.

The enrollment of continuing education has increased significantly, and the tuition fees of Xinhua College-Clinical Medical College have increased. The 1H21 tuition income is 265 million yuan / + 12.6%, and the accommodation fee income is 26 million yuan / + 155%. As of June 30, the number of students in the company reached 48554 / + 10.5%, including 42550 full-time students / + 6.7% and 77.7% undergraduates. According to schools, 1) Xinhua College: the number of students is 29685 / 8.0%, of which 23681 / + 1% are full-time students and 6004 / + 49% are continuing education students. In the 22nd academic year, the tuition fee for freshmen increased from RMB 1.98-23800 to RMB 2.18-26800; 2) Xinhua School: the number of full-time students is 6093 / + 8.2%; 3) the number of students in the Clinical Medical College of Anhui Medical University: 2831 / + 61.7%. In the 22nd academic year, the tuition fee for four-year undergraduate students increased from 1.32-15900 yuan to 1.45-17600 yuan, and the tuition fee for five-year undergraduate students increased from 15900 yuan to 17300 yuan. 4) Hongshan College: the number of students is 9945 / + 9.8%.

The construction of the campus of Hongshan-Clinical Medical College is smooth, and it is expected to bring a large increment after the transfer. 1) the undergraduate enrollment plan of 21Universe 22 academic year increased by 5.2% to 11330 students compared with the same period last year. 2) the first phase of the new campus of Clinical Medical College and the new campus of Hongshan College are expected to be put into use in the 22nd academic year of 2021 University. the capacity of the first phase of the Clinical Medical College reached 5000 and that of Hongshan College reached 9000. In the future, with the commissioning of the new campus and the conversion of the two schools, the number of places and tuition fees are expected to increase, which is expected to bring a larger increase for the company.

Risk factors: the change of industry policy, the slower-than-expected progress of transfer, and the lower-than-expected increase in the number of school places.

Investment suggestion: considering the higher-than-expected growth of the company's first-half performance in the first half of the year, raise the EPS forecast for the company's core net profit in 2021-23 to 0.25amp 0.29x0.34 yuan (the original forecast is 0.24pound 0.27pound 0.31 yuan), and with reference to the company's historical valuation center and the average valuation level of the higher education industry (10 times PE), give the company 8 times PE in 2021, corresponding to the target price of HK $2.30, and maintain a "buy" rating.

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中国新华教育(02779)2021年中报点评：继续教育增长显著，校区建设进展顺利

Comments on China Xinhua Education (02779) 2021: continuing education has increased significantly, and the construction of the campus is progressing smoothly.

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