Overview of events
The company's 22H income / homing net profit / adjusted net profit was 1.274 million yuan, an increase of 2.9%, 11.58% and 4% over the same period last year, and the performance was lower than expected.
22H cash reserve of 2.7 billion yuan, in September the company expects tuition income of 1.4 billion yuan, cash reserves will exceed 4 billion, the capital structure is still healthy.
The company acquired a 51% stake in Shanghai CIIC and announced that it had reached a strategic cooperation with CIIC Science and Technology to expand the immigration and study abroad sector while continuing to improve the capacity of online education services and continue to contribute to Internet + vocational education.
Analysis and judgment
Campus education develops steadily. 22H campus education income was 720 million yuan, an increase of 10% over the same period last year, including tuition / accommodation fees of 670 million yuan, an increase of 9.4% over the same period last year and 18.2% of the same period last year. The number of students in school increased by 5% to 101636, with undergraduates accounting for 57%. We analyze that the steady development of campus education business benefits from: 1) the good growth of college enrollment and the improvement of profit margin at the same time; 2) the expansion of Pais College.
Revenue from online education is declining. 22H online education revenue was 550 million, down 5.1% from the same period last year. Xiaoai Science and Technology and premium courses were added in the first half of the year, but not in the same period last year. Among them, the income from distance education / teacher training / online courses / sales of books / other educational services is 4.36 0.31, 0.18 and 0.07 million yuan respectively, with a year-on-year increase of-5%, 20%, 46%, 35%, 17%. Our analysis is mainly due to: 1) Aopeng is mainly affected by the suspension of enrollment in online education at the policy end. 2) the enrollment and promotion of Duxue Network has been affected by the epidemic, and the willingness to sign up for high unit-price courses has been affected by the economic downturn.
The expense rate is still high, and there is plenty of room for improvement in the future. 1) 22H1 gross profit margin decreased by 1.1pct to 57.6% compared with the same period last year, mainly due to the increased cost of the company's expansion of the online education sector. 2) the sales / management / financial expense rates are 8.7%, 18.3% and 5.7%, respectively, with an increase of 0.6/1.3/0.9pct over the same period last year. 3) the adjusted net interest rate decreased to 35.6% from the same period last year, mainly due to the increase in the cost of online education business administration and promotion.
Profit forecast and investment suggestion
In the short term, Aopeng business is under pressure, but the company is expected to reduce the impact by promoting cooperation with private universities, and YouTube, as a campus information business, is also expected to produce synergy. Taking into account the short-term pressure of Aopeng, the annual income in 22-23-24 was reduced by 30.26 pound 36.42 / 4.313 billion yuan to 25.38x2665pm 2.798 billion yuan, and the adjusted net profit was reduced to 671x87xb 1400 million, corresponding to EPS 0.16max 0.17 / 0.18 yuan, and the closing price of HK $0.67 on August 16, 2022 corresponding to PE 43.8X respectively. Despite the short-term impact of Aopeng, in the long run, the profit-making choice of private higher education is still advancing, and the company is expected to make up for the online damage by promoting Aopeng's cooperation with private colleges and universities. at present, the valuation is at the bottom level and the "buy" rating is maintained.
Risk hint
Risk of education policy change; lower-than-expected risk of online education business; systemic risk