In the first half of the year, Neusoft's education income was 740 million yuan, up 24.4 percent from the same period last year; gross profit was 47.0 percent, up 3.9 percent from the same period last year; and the adjusted net profit was 230 million yuan, up 89.5 percent from the same period last year. The performance exceeded expectations. We are optimistic about the future development of Neusoft Education, especially the steady endogenous growth and continuous improvement of profitability of the company.
In the end, the target price was maintained at HK $6, which is 47% higher than the current price, corresponding to a 22-year 8 times forecast price-to-earnings ratio and a buy rating.
Summary of the report
The steady development of various businesses. In the first half of the year, the company's business income was 580 million yuan for full-time higher education, an increase of 23.4% over the same period last year, accounting for 78.0%. Mainly due to the increase in the number of students and average tuition fees in the three universities; the income from continuing education was 66 million yuan, an increase of 13.5% over the same period last year, accounting for 8.9%, accounting for 8.9%, of which 2C training business income was about 22 million yuan and 2B training fee program income was about 5 million yuan. Finally, the income from educational resources and digital workshops was 97 million yuan, up 40.0 percent from the same period last year, accounting for 13.1 percent, of which the business income from educational resources was 69 million yuan, up 115.9 percent from the same period last year, accounting for 9.3 percent. The business income from digital workshops was 28 million yuan, down 24.6 percent from the same period last year, accounting for 3.8 percent. The business of educational resources is growing rapidly. in the first half of the year, the company carried out professional co-construction or industrial college co-construction cooperation with 65 colleges and universities, of which more than 3% were public colleges and universities, with more than 250 professional co-construction projects, covering 18000 students, and the number of students increased by 35% over the same period last year.
The scale of running a school has reached an all-time high. As of June 30, Neusoft Education has a total of 45000 full-time higher education students, an increase of 16.4% over the same period last year, an increase of 17000 in the 2022nd academic year, an increase of 6.1% over the same period last year. We believe that with Neusoft Education's excellent school quality and good brand reputation, the number of places in the three universities will be further improved in the future. Neusoft Education has been expanding the existing campus in recent years. In the first half of the year, the school has a capacity of 58000 beds, with a utilization rate of 78%.
Maintain the target price to HK $6, buy rating. We are optimistic about the future development of Neusoft education, especially the steady development of endogenous growth and the continuous improvement of profitability. In the end, the target price was maintained at HK $6, which was 47% higher than the current price, corresponding to a 22-year forecast price-to-earnings ratio of 8 times and a buy rating.
Risk hint: policy risk; worsening epidemic situation