Gelonghui, December 20, 丨 Zhonghui Group (0382.HK) announced on December 14 that it would acquire 100% of the shares of Guangdong Huashang Technical School, at a total cost of 150 million yuan, to be paid from its own funds. This is Zhonghui's second vocational education acquisition project following the acquisition of high-quality vocational education schools in Sichuan Province in December 2020.
Guangdong Huashang Technical School is a private secondary vocational college. It was approved by the Ministry of Labor and Social Security of Guangdong Province in 2007. Currently, the school mainly offers 13 majors, including early childhood education, pharmaceutical marketing, beauty and health care, e-commerce, accounting and marketing. The total number of students enrolled in the school in the 2021/22 school year was about 5,400, and the compound annual growth rate for the 3 years (FY19/20 to FY21/22) was 57%.
Fude Financial believes that Zhonghui Group's acquisition closely follows the direction encouraged by the country, boosted profit prospects, created a new growth catalyst, and will further enhance the company's performance. Zhonghui Group's FY21-24 earnings per share is expected to have a compound annual growth rate of 20%, maintain the purchase rating, and raise the target price to HK$10.63.
Daimo said that assuming the merger of the project starts in January 2022, it will bring about an additional 2% profit contribution to Zhonghui in fiscal year 2022. Management expects the school's revenue in FY2022 to increase by more than 90% year-on-year, with net profit exceeding RMB 21 million. Daimo maintained the Zhonghui stock increase rating, with a target price of HK$7.3.
Guangdong Huashang Technical School is a private secondary vocational college. It was approved by the Ministry of Labor and Social Security of Guangdong Province in 2007. Currently, the school mainly offers 13 majors, including early childhood education, pharmaceutical marketing, beauty and health care, e-commerce, accounting and marketing. The total number of students enrolled in the school in the 2021/22 school year was about 5,400, and the compound annual growth rate for the 3 years (FY19/20 to FY21/22) was 57%.
Fude Financial believes that Zhonghui Group's acquisition closely follows the direction encouraged by the country, boosted profit prospects, created a new growth catalyst, and will further enhance the company's performance. Zhonghui Group's FY21-24 earnings per share is expected to have a compound annual growth rate of 20%, maintain the purchase rating, and raise the target price to HK$10.63.
Daimo said that assuming the merger of the project starts in January 2022, it will bring about an additional 2% profit contribution to Zhonghui in fiscal year 2022. Management expects the school's revenue in FY2022 to increase by more than 90% year-on-year, with net profit exceeding RMB 21 million. Daimo maintained the Zhonghui stock increase rating, with a target price of HK$7.3.