Overview of events
2022H1 realized income / homed net profit / adjusted net profit of 404x139 million yuan, an increase of 16.4%, 27.5% and 19% over the same period last year. The growth rate of net profit was higher than that of income, mainly due to the increase in gross profit margin and the reduction of financial expenses. The company pays an interim dividend of HK $0.1 per share, with a dividend yield of 3%.
Analysis and judgment:
The undergraduate business grows steadily, and the enrollment of junior college students expands rapidly. 2022H1 tuition income was 356 million yuan, up 22% from the same period last year, and accommodation fee income was 45 million yuan, down 4%. This was mainly due to the fact that some students did not enter the campus during the outbreak of the epidemic in Shanghai in the first half of the year, resulting in a decrease in accommodation fee income. In terms of enrollment, the total number of undergraduate / junior college / junior college students increased by 1116 in the 22nd academic year, of which the number of undergraduate / junior college / junior college students was 17643. The number of undergraduate / junior college / junior college students increased by 2%, 5%, 57%, respectively, and adult education students reached 6166, an increase of 37.8% over the same period last year. In terms of tuition fees, 2022H annualized tuition fees increased by 2399 yuan to 27017 yuan, an increase of 9.75% compared with the same period last year. Tuition fees for freshmen in the 22nd academic year rose from 2.3-38000 yuan to 2.3-39800 yuan, while those for junior college students increased from 15-18000 yuan to 15-20, 000 yuan.
22H gross profit margin increased, management expense rate increased. The 2022H gross profit margin rose to 68.1%, mainly due to the increase in the number of students, the increase in average tuition fees, and at the same time, because of the epidemic in Shanghai, some students did not live in schools, reducing student-related expenses, cooperative education expenses and other miscellaneous expenses. The net interest rate was 32.9%, an increase in 0.7pct compared with the same period last year. The rate of sales / management / financial expenses was 0.12%, 20.7% and 3.05%, respectively, which increased-0.32/5.96/-4.4pct. The rate of sales expenses was basically the same, mainly due to the decrease in travel and publicity costs of the epidemic; the increase in the rate of management expenses was mainly due to the increase in the number and average salary of administrative staff, and the increase in expenditure on procurement of epidemic prevention materials. The sharp decline in the financial expense rate is mainly due to a 39% drop in interest-bearing liabilities and a reduction in financing costs from 4.47% to 4.2%.
Investment advice:
According to our analysis, in the short term, (1) the employment rate of students in the class of 21 still maintains a high level of 98.8% in the context of the economic slowdown, and the number of new students in 2022 is about 20% higher than that in 2021. At the same time, the tuition fees for undergraduate / junior college / junior college students in the 23rd year are higher than those from 3-3.98x1.5-2lb 2.3-30,000 yuan to 3.2-3.982pm 2.3-38000 yuan. (2) with the continuous improvement of the company's educational hardware facilities, the new school buildings and comprehensive buildings built in the third phase of the expansion project of the company will be put into use in September, providing 3984 beds; the construction of the fourth phase of the school mainly includes the addition of a new teaching building. for the teaching activities of the Institute of International Education and the Institute of continuing Education, it will be put into use by the end of 2023. In the medium and long term, the company takes the lead in completing for-profit selection, insisting on high-quality investment, and has long-term advantages in the location of Shanghai Port. Maintain the annual income of 820 EPS on 22-23-24, 943 plus 1.069 million yuan, and the net profit on 22-23-24, 2.1 million, 2.5 million, and 0.7 yuan, respectively, on 22-23-24. The closing price on August 29, 2022, corresponding to HK $3.86, corresponds to PE of 7.7, 6.5, 5.6X, respectively, maintaining the "Buy" rating.
Risk hint
The uncertainty under the influence of the epidemic, the enrollment is lower than expected, and the systemic risk.