Overview of events
In 2021, the company's realized income / net profit / adjusted net profit was 23.94 million yuan, an increase of 116%, 379% and 86% respectively over the same period last year. The adjusted items are mainly to add back 42 million yuan in interest on put option liabilities generated by the acquisition of Reed Group, 46 million yuan in amortized intangible assets, 79 million yuan in fair value change income, 19 million yuan in dividend deferred income tax, and so on. The revenue was in line with our previous expectations, and the net profit exceeded our expectations. The final dividend per share is HK5.32 cents, with a dividend rate of 30% and a dividend yield of 7%.
Analysis and judgment:
The better-than-expected performance mainly comes from online education, which accounts for 48% of the total. The tuition fee / accommodation fee / distance education platform service fee / distance education support service fee / teacher training service / commission income / online course service / sales of books / examination and evaluation / other education business income in 2021 is 11.55, 0.96, 0.72, 0.26, 0.70, 0.47, 0.58, 0.29, 0.24, 116 million respectively. The company has successively listed Aopeng Education and Capital Learning Network in December 2020 and January 2021. According to our analysis, the higher-than-expected online education business mainly comes from the integration of Aopeng, on the one hand, the accelerated income growth comes from the expansion of private universities, open universities, etc.; on the other hand, the net interest rate has improved greatly, mainly due to better cost control.
The university business has benefited from the price increase of Dianchi College, and the increase in the number of people mainly comes from higher vocational education. The growth rates of tuition income and accommodation income were 12% and 49% respectively, down from 99% in 2020 to 52%. A total of 10 schools (7 colleges and universities, 2 secondary vocational schools and 1 high school) are held or managed by the company. in terms of academic qualifications, the proportion of undergraduate / higher vocational / technical secondary / adult education students at the end of 2021 was 57%, 33%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5%, 5% and 17%, respectively. At the end of 2021, the total number of students at school was 101103, an increase of about 9 per cent over the same period last year, and the average tuition fee is estimated to increase by about 3 per cent year-on-year.
In 2021, the adjusted net interest rate was 33.54%, a year-on-year decline in 5.48PCT, mainly due to the increase in the rate of sales expenses caused by the acquisition of Aopeng and Duxue.com.
The adjusted net interest rate of 2021H2 was 31.40%, down 0.69PCT from the same period last year and 4.14PCT from the first half of the year. The gross margin in 2021 was 56.7%, an increase in 5.5PCT compared with the same period last year, mainly due to the acquisition of online education entities with high gross margins. In terms of expense rate, the sales expense rate is 10.1%, and the increase in 8.3PCT is mainly due to the increase in staff costs and publicity costs caused by the acquisition of online education subjects. The administrative expense rate is 20%, an increase in 1PCT compared with the same period last year. Financing cost / revenue is 5%, down 2PCT from the same period last year. The income tax rate was 8 per cent, a year-on-year drop in 3PCT.
Investment suggestion
Looking to the future, we analyze: (1) Aopeng Education, the main body of online education, is expected to maintain more than 30% growth in the future, while Duxue Network and people's livelihood online will maintain normal growth; (2) University business is expected to maintain 10-15% growth, of which the number of students increases by nearly 10%, and tuition fees increase by about 5%.
Considering online education, we will increase the 23-year income of 22gamer from 3.3 billion yuan to 3.0263,642 million yuan, increase the 24-year income by 4.313 billion yuan, increase the adjusted net profit from 1.01 billion yuan to 1.1.87 billion yuan, increase the 24-year adjusted net profit by 1.4 billion yuan, increase the 23-year EPS from 0.21pm to 0.28 yuan, and increase the 24-year EPS by 0.33 yuan. On April 1, 2022, the closing price of HK $0.86 corresponds to 32.5 PE 2.1x, which is currently at the bottom of the valuation, only 3 times, and the dividend yield is 7%, maintaining the "buy" rating.
Risk hint
The risk of education 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.