Overview of events
In fiscal year 2022, the company's realized income / net profit / adjusted net profit was 30.43 million yuan, up 30.9%, 26.3% and-12.4%, respectively, and the adjusted net profit increased by 11% after excluding the impact of last year's one-time profit of 179 million yuan. Among them, the adjustment items are: (1) adding back the depreciation and amortization caused by the estimated value added (100 million yuan in fiscal year 22 and 74 million yuan in fiscal year 21); (2) adding back conversion fees and deferred payment due to amortized cost accounting financial expenses (30 million yuan in 22 fiscal year and 686 million yuan in 21 fiscal year) (3) add back the one-time termination recognition fee for the transfer (none in fiscal year 22, 77 million yuan in fiscal year 21); (4) add back the exchange profit and loss (134 million yuan in fiscal year 22,-19 million yuan in fiscal year 21); (5) add back equity-settled share option expenses (27 million yuan in fiscal year 22) (6) add back the financial expenses calculated on the basis of amortized cost due to the deferred payment of stock acquisition (21 million yuan in fiscal year 22 and 31 million yuan in fiscal year 21); (7) minus the change in fair value of convertible bonds (4 million yuan in fiscal year 22 and 376 million yuan in fiscal year 21) (8) the investment income obtained by the conversion method of the long-term equity investment equity method of the Institute of Science and Technology (none in fiscal year 22 and 212 million yuan in fiscal year 21). The final board of directors decided not to pay dividends.
Analysis and judgment:
The number of students in school increased significantly and contributed to the increase in income. From a business point of view, in fiscal year 2022, the group's tuition / boarding fees / sales of books and daily necessities / other income were 25.50, 2.22, 0.54, 215 million yuan, respectively, an increase of 32%, 41%, 26%, 34%, and 84%, 7%, 2%, 7%, respectively. In the 2021 / 22 academic year, the total number of students enrolled in the group was 280500, an increase of 21% over the same period last year. From the perspective of student composition, the number of undergraduate / junior college / technician students is 14.34 / 1249 / 121,100 respectively, an increase of 20% / 27% / 16% and 51% / 45% / 4% respectively.
From the perspective of domestic and international schools: (1) the income from local education reached 2.696 billion yuan, an increase of 34% over the same period last year. Among them, the local education tuition / boarding fees / sales of books and daily necessities / other income were 22.26 pm 2.20 pm, an increase of 37% Rmb40%, a year-on-year increase of 37%, a ratio of 83%, 8%, 2% and 7%, respectively. (2) the income from international education reached 345 million yuan, an increase of 9% over the same period last year, of which tuition / boarding fee / other income was 3.24 yuan, 0.02 million yuan, 133% and 94% respectively.
The company's increased investment in school buildings and equipment led to a drop in gross profit margin. Fiscal year 2022 gross profit margin was 45.9%, down 4.7 4.2PCT from the same period last year; adjusted gross profit margin was 49.0%, down PCT from the same period last year. The decline in gross profit margin is mainly due to the increase in staff salaries and depreciation amortization due to the increase in investment in school buildings and teaching training equipment in order to improve the quality of teaching. In fiscal year 22, the cost of the company was 1.648 billion yuan, an increase of 43.5% over the same period last year, and the cost / income increased to 54.1% over the same period last year, mainly due to the allocation of additional teachers, the implementation of small class teaching, and the increase in the salary of teaching staff; and the upgrading of colleges and universities, increased investment in practical training, the increase in depreciation and amortization of school buildings and training equipment, and the increase in depreciation and amortization was mainly due to more than 50% of new mergers and acquisitions this year.
Affected by the decline in gross profit margin and other income, the net profit margin decreased compared with the same period last year. The company's net interest rate was 14.7%, down 11.4 12.3PCT from the same period last year; the adjusted net interest rate was 24.9%, down PCT from the same period last year. The decline in net interest rate is mainly affected by the decline in gross profit margin and other income. In fiscal year 2022, the group's other income was 282 million yuan, down 57.7% from the same period last year, mainly due to the appreciation of the equity value of the Institute of Science and Technology in 21 years, which increased by 212 million yuan and the debt restructuring income of 180 million yuan. Deducting the above effects, it actually increased by 7 million yuan over the same period in 21 years. In terms of expense rate, (1) in fiscal year 2022, the sales expense rate was 7.1%, an increase of 0.8PCT over the same period last year, mainly due to the increase in manpower, advertising and marketing related to enrollment and employment; (2) the management expense rate was 14.5%, an increase in 0.2PCT over the same period last year, mainly due to the need for further integration of M & An institutions, increased teacher recruitment and upgrading of institutions, resulting in an increase in salary, depreciation and amortization. (3) other expenses / income was 4.7%, year-on-year growth 0.3PCT, mainly due to increased exchange losses; (4) financing costs of 298 million yuan, basically the same as the same period last year; (5) income tax / income 4.7%, year-on-year increase in 1.8PCT.
Investment suggestion
We believe that the future growth space of the company lies in: (1) in September 23, the company added 95000 students, thus increasing the number of students by 21%; (2) the liberalization of independent pricing power in Sichuan, Guizhou and other provinces is expected to accelerate the increase of school prices. in addition, the opening of foreign undergraduate docking with Yingdi and Shinawatra will lead to the increase of tuition fees. However, we expect that the company is still in the investment period in the next two years, and the net interest rate is still under some pressure, but it is expected to pick up after the investment period in the future.
Considering the higher-than-expected enrollment, the revenue forecast for fiscal year 24 is raised from 2.9673,351 billion yuan to 3.652amp 4.199 billion yuan. Considering that the company is still in the investment period in the future, the adjusted net profit forecast for fiscal year 24 is lowered from 1.438 billion yuan to 84pm 1.05 billion yuan, and the revenue for fiscal year 25 / adjusted return net profit forecast is 4871.315 billion yuan. The corresponding EPS for fiscal year 23 to 24 is reduced from 0.15 to 0.18 yuan to 0.10 to 0.13 yuan, and the EPS for fiscal year 25 is 0.16 yuan. On December 1, 2022, the closing price of HK $0.68 corresponds to a PE of 6x5max 4X (HK $1 = RMB0.91), maintaining a "buy" rating.
Risk hint
Market competition aggravates risk, outstanding debt bond risk, systemic risk.