Overview of events
In 2021, bridge education realized income / pre-tax profit / net profit of RMB 2.43 billion yuan, a year-on-year increase of 23.2%, 22.9% and 7.3%. The lower growth rate of net profit than income growth is mainly due to the increase in for-profit school income tax. The performance was lower than expected. HK $0.1 per share was distributed at the end of the year, with a total of HK $0.2 for the whole year, with a dividend rate of 38% and a dividend yield of 5%.
Analysis and judgment:
The increase in tuition fees mainly comes from the contribution of price, with the volume / price increasing by 5% and 11.9% respectively. In 2021, tuition income was 581 million yuan, an increase of 18% over the same period last year, accounting for 85%. In terms of quantity, the total number of students enrolled in Jianqiao in the 2021 gamma 22 academic year was 22454, an increase of 5% (1116) over the previous academic year, mainly from the contribution of undergraduate / junior college / junior college students (79%, 11%, 11%, 11%, respectively). Compared with the previous academic year, the number of students increased by 2%, 5%, 57% respectively). From the perspective of new enrollment, the total number of students enrolled in the 2021Universe 22 academic year was 6495, an increase of 3% over the same period last year, of which the undergraduate / junior college / junior college enrollment was 4377, 707, 1411 respectively. In terms of price, the average tuition fee for the construction of the bridge in 2021 was 25871 yuan, an increase of 11.9% over the same period last year, mainly due to the increase in undergraduate tuition fees from 23,000 to 30,000 to 39,800 yuan.
Under the influence of the epidemic, the cost of accommodation has increased significantly under the low base. The income of accommodation fees in 2021 was 92 million yuan, an increase of 93% over the same period last year, accounting for 13%. The sharp increase in accommodation fees is mainly due to the impact of the epidemic in 2020 and the resumption of accommodation in 2021. In addition, the average accommodation cost of the school's new dormitory buildings has increased significantly: (1) the boarding fee of the first phase of the dormitory building will be raised from 3600 yuan to 4800 yuan for freshmen enrolled in 2021 and 2022. (2) the accommodation fee for the two dormitory buildings in the second phase will be increased by about 60% to 5800 yuan.
The decrease in net interest rate is mainly due to the increase in income tax, the reduction of government subsidies and the increase in the rate of administrative expenses. The gross profit margin in 2021 was 62 per cent, an increase of 2PCT over the same period last year, a gross margin of 65 per cent per cent in the first half of the year and 58 per cent in the second half of the year, respectively, and an increase in 0.4/2PCT over the same period last year. The net interest rate in 2021 was 26%, down 9PCT from the same period last year, 32% in the first half of the year and 20% in the second half of the year, respectively. The net interest rate in the second half of the year was lower than that in the first half of the year, mainly due to lower gross profit margin (6PCT) in the second half of the year than in the first half of the year and a significant increase in 12PCT in the rate of management expenses. For the whole year, the decrease in net interest rate was mainly due to: 1) other income / income fell from 5% to 2%. This is mainly due to the reduction of government subsidies, and the higher government subsidies for companies in 2020 are mainly due to the receipt of income tax and VAT rebates (related to the land and buildings of pre-sale school buildings). (2) the increase in the rate of management expenses to 21% is mainly due to the increase in the number of administrative staff and the increase in the average salary standard. (3) income tax / income increased from 1% to 9%, and the income tax rate increased from 2% to 26%, mainly due to the conversion to for-profit schools and the provision for income tax at a non-preferential tax rate of 25%. The company's financial expense rate fell 3PCT to 7%, mainly due to the reduction in interest-bearing borrowing from 1.125 billion yuan to 784 million yuan, and the average annual real interest rate from 4.85% to 4.34%.
Investment suggestion
Future growth drivers: 1) optimized pricing, the tuition fees of freshmen in 2021 are 10% higher than those in 2020. 2) increase the capacity, the construction of the third phase of the project will add 3984 beds, which started in September 2020. the total capital expenditure related to the third phase of the new school building is expected to be about 340 million yuan and is expected to be completed by the end of 2022. The fourth phase of the campus construction project is planned in April 2022, which mainly includes a teaching building for teaching activities of the Institute of International Education and the Institute of continuing Education. The total capital expenditure is expected to be 65 million yuan, which is expected to be invested by the end of 2023.
The net profit in 2022-23 is lower than expected. The net profit for 22-23 is reduced from 283 million yuan to 210 million yuan, and the 24-year net profit is 290 million yuan. Accordingly, the EPS for 22-23 years is reduced from 0.68 yuan and 0.81 yuan to 0.51,0.6 yuan, and the 24-year EPS is 0.70 yuan. On April 8, 2022, the closing price of HK $3.65 (exchange rate of HK $1 = RMB0.81) corresponds to PE of 6max, 5max and 4X, respectively. Despite the downgrade, the 22-year valuation is only six times, maintaining a "buy" rating.
Risk hint
The uncertainty under the influence of the epidemic, the enrollment is lower than expected, and the systemic risk.