Since September, the matching policies of special re-loans and financial discount have led to the rapid expansion of loans related to the informationization of education and industrial training capacity-building projects in colleges and universities. Neusoft Education has made use of years of experience in the software industry & education industry to build a diversified export business of educational resources, which has grown rapidly since 2018. As the company's educational resources export business has a variety of advantages, we believe that the company is expected to fully enjoy this policy dividend, further promote the company's educational resources export products, and achieve diversified development. Maintain a "buy" rating.
Special re-loans and interest discount policies promote the informationization of higher education and the building of practical training capacity. On September 7, the executive meeting of the State Council decided to support the renewal and renovation of equipment in some areas with special re-loans and financial discount. On Sept. 28, the people's Bank of China decided to renew the loan line by 200 billion to support the upgrading of equipment in industries such as education. The corresponding policy issued by the Ministry of Education in mid-September indicates that the loan is mainly used for educational informationization, the construction of professional training system and so on. As of mid-October, loan issuance in various provinces has begun to proceed in an orderly manner. This policy support is large-scale and strong, and will support the rapid expansion of higher education information construction and practical training capacity-building demand.
The company's educational resources export business multi-output, accumulated strength, driving the company's revenue, gross profit margin. The company's educational resources export business includes four product types: professional and industrial college co-construction, intelligent platform and intelligent content output, industrial training room construction and digital workshop. The company's educational resources export business is developing rapidly.
From 2019 to 2021, the company's education export revenue was 1.48 million yuan, an increase of 30% 17% and 18% over the same period last year. Among them, the educational resources export business with lighter business form grew faster, and revenue increased by 55%, 168% and 61% over the same period last year, becoming a new growth driver outside the company's higher education business.
The four advantages of the company's educational resources export business are expected to promote the company to fully enjoy the policy dividend. 1) rich experience in university cooperation: this policy window is short, the project is large, and the company's past successful cases make it easier for the company to be recognized by colleges and universities. obtain orders; 2) training products meet the needs of intelligent training construction in emerging industries: the company's products mainly provide intelligent solutions for practical training pain points in the software industry, in line with the general direction of policy support. 3) customization of product output + standardization can meet different needs: the company provides standardized basic platform capacity building and customized educational content supply for colleges and universities at different levels and levels. it is helpful for the company to meet the needs of cooperative colleges and universities in a lower cost and more customized way. 4) combination of software and hardware, one-stop solution: most of the company's training room products adopt the "one-software, one-hardware, one-support" mode to provide cooperative colleges with one-stop training solutions covering equipment, content, teaching system and evaluation platform. it is conducive to an one-stop solution to the pain points of cooperative colleges when the window period is narrow, and it is also more in line with the relevant guidelines for equipment and hardware updates in this policy. It is beneficial for the company to benefit from the demand for equipment renewal in colleges and universities.
Risk factors: market competition is higher than expected; the landing progress of loan projects is not as expected; company enrollment is not as expected; education industry policy changes, local epidemic repeatedly affect the project schedule and other risks.
Investment suggestion: this round of special re-loan and discount policy brings the demand for university projects. After years of development, the company's educational resources export business is expected to make use of its own business advantages to fully enjoy the demand dividend released by this policy. At the same time, in view of the rapid decentralization of this round of policy loans and the short-term uncertainty of the contribution to performance, we maintain the company's core EPS forecast of 0.60 Universe 0.76 Universe 0.94 yuan in 2022-2024. Combining PE and PEG valuation methods, the company is given a target price of HK $5 in 2022, maintaining a "buy" rating.