Summary of events: the company's 2022H1 revenue / adjusted homing net profit increased by 4.8% over the same period last year.
2022H1 Group's revenue rose 4.8 per cent year-on-year to 1.204 billion yuan, while adjusted net profit rose-7.3 per cent to 576 million yuan. It is proposed to pay an interim dividend of HK12.3 cents per share, with a dividend ratio of 50% and a dividend yield of 8.8%.
Analysis and judgment:
The income of the higher education sector increased in single digits. The income of K12 / university was 1.11 billion yuan, an increase of-19.73%, 8.14%, respectively, and the number of students in the higher education sector increased from 114000 to 118000, an increase of 3.5%.
The decline in gross profit margin comes from increased investment. The gross profit margin of K12 / university is 34.92%, 58.85% respectively, an increase of-11.9/-11.2PCT over the same period of last year. The company increased its cost input, of which personnel expenditure increased by 16% to 294 million yuan, student training and scholarship expenditure increased by 23.5% to 75.56 million yuan, school consumables increased by 73% to 12 million yuan, maintenance expenditure increased by 36% to 23.66 million yuan, and office administration expenditure increased by 90% to 48.8 million yuan. Other income / adjusted other income was 0.49 million yuan respectively, a year-on-year increase of-4.2% and 0.8%, mainly for government subsidies.
Increase cost control, the decline in adjusted net profit is lower than that of gross profit. The adjusted net interest rate fell 6.3PCT to 47.8% compared with the same period last year. (1) the sales cost of 2022H1 in the fiscal year was 19 million yuan, down 28.22% from the same period last year, mainly from cost control. (2) the administrative expenditure was 103 million yuan, down 1.76% from the same period last year, and the expense rate decreased by 0.5PCT. (3) the financial expense was 27 million yuan, and the financial expense rate decreased by 1.61PCT to 2.2%, mainly due to the reduction of exchange losses and interest expenses.
Investment suggestion
According to our analysis, the future growth space lies in: (1) it is expected that the number of talents in Zheng, industry and commerce and Shandong will no longer increase significantly in the future. Hunan's foreign-related growth comes from the new campus enrollment; (2) Hunan's foreign-related talents, Shandong talents, and Stanford still have room for tuition fee growth; (3) We estimate that the three newly-built colleges and secondary schools are expected to start enrolling students in September this year. Maintaining the annual income of 2.916 billion yuan in 22-23-24, and considering the company's increased investment, the annual return net profit in 22-23-24 was reduced from 15.55 to 1.172 billion, and corresponding to the reduction of EPS from 0.43 to 0.36 in 22-23-24. The closing price of HK $1.18 on May 5, 2022 maintained a "buy" rating corresponding to the PE for 22-23-24, which was 3Universe 3X (HK $1 = RMB0.85).
Risk hint
The risk of adjustment of national regulations and policies, the pressure on the maturing debt of convertible bonds, the risk that the progress of acquisition and expansion is not as expected, and systemic risk.