Overview of events
The income / adjusted net profit of FY22H1 Company was 703 million yuan, a year-on-year increase of 41.29% and 17%, which was in line with expectations. The dividend per share is HK $0.06, with a dividend yield of 2.9%.
Analysis and judgment
The income side contributed 24% and the endogenous growth rate was 17%. (1) the income from tuition fees was 649 million yuan, an increase of 42% over the same period last year. Harbin and Huaibei schools combined factors (24% contribution), and the number of students in the old school increased by 17%. The income from accommodation fees was 49 million yuan, up 35% from the same period last year, and other service fees were 5.44 million yuan, down 10% from the same period last year. (2) the income of undergraduate / junior college / secondary vocational / adult education is 5.210.43 Universe 0.41 million Yuan respectively, an increase of 57.3% over the same period last year. (3) the overall enrollment of the group was 119900, an increase of 30%. Among them, the group operated and merged schools (i.e. Guangdong Institute of Technology, Zhaoqing School, Harbin Petroleum Institute and Huaibei Institute of Technology) had a total of 109824 students, an increase of 4.9% over the same period last year. Ma on Shan College, operated by the Group, has a total of 10124 students. The month-on-month decline is mainly due to the graduation of adult students, and we judge that the decline in the number of higher vocational students is mainly due to the focus on undergraduate courses in corporate strategy.
Continue to increase investment. The FY22H1 gross profit margin decreased by 6.3PCT to 64.9% compared with the same period last year, mainly due to the low gross profit margin of combined schools and the increase in cost input, that is, the increase in depreciation and amortization for the construction of teachers, student subsidies and the construction of high-standard laboratories; the rate of sales expenses was basically unchanged at 0.4%, while the rate of management expenses decreased to 10.5% from the same period last year, mainly due to economies of scale. The financing cost rate increased to 4.87% from the same period last year, mainly due to the establishment of the new campus of Huaibei Institute of Technology and the increase in loans for the acquisition of Harbin Petroleum Institute and Maanshan College. The cash on the company's account is 1.455 billion yuan, which is more abundant.
Investment suggestion
The future growth of the company lies in: (1) there is still room for improvement in the school utilization rate of 76.5%; (2) tuition fees are increased, and the undergraduate tuition fees of undergraduate schools in 2021-2022 are about 10% higher than those in 2020-2021. We expect the increase in tuition fees to narrow this year and 3-4% in the future. (3) We estimate that 2 schools in Anhui and Harbin schools will continue to grow. We judge that the future unified enrollment places Huaibei school is expected to grow higher than the average, and Maanshan school is expected to resume growth; (4) in the short term, due to increased investment, the net interest rate may decline; (5) we judge that Maanshan College is currently in the process of organizer change. it is expected to be combined in the future. The income of FY2022-2024 will be reduced from 2.15 billion yuan to 1.488 trillion yuan, and the adjusted net profit will be reduced from 1.16 billion yuan to 7.9 billion yuan, and the corresponding EPS for 22-24 fiscal year will be reduced from 0.41 to 0.4958 yuan to 0.3945, 0.52 yuan. On April 28, 2022, the closing price of HK $2.05 corresponds to a PE of 4x4max 3X, maintaining a "buy" rating.
Risk hint
Epidemic uncertainty; risk of adjustment of national regulations and policies, risk of aggravation of market competition, risk of integration effect; systemic risk.