Neusoft Education announced its 2022 results, with revenue of 1,548 million yuan, an increase of 14% over the previous year, and the adjusted net profit of Guimo was 381 million yuan, an increase of 23% over the previous year. Revenue growth was in line with our expectations, and profit growth exceeded our expectations. We believe that the sharp increase in company profits is mainly due to a sharp increase in the volume and price of students enrolled in the higher education sector and tuition fees. Meanwhile, the company received 95.32 million yuan in government subsidies in fiscal year 22, an increase of 189% over the previous year. Furthermore, there were some minority shareholders' interests in 2021, and the net profit base of the parents was low.
Higher education business is growing steadily. The higher education sector of Neusoft Education earned 1,175 billion yuan in 2022 (up 15% year over year), accounting for 76% of total revenue. The increase in income from the higher education business stems from the continuous increase in the number of students enrolled and the average tuition fee level driven by the policy of running high-quality schools.
In 2022, the number of students enrolled in the company's three undergraduate colleges increased 15.9% year over year to 52,900. In addition, colleges and universities have expanded college upgrade enrollment, reducing the number of college students enrolled, while undergraduate tuition fees are higher, which has led to the Group's average tuition fee increase of about 8% year-on-year in 2022. By the end of '22, the Group's overall utilization rate had reached 91%, and construction of new campuses for colleges and universities in Chengdu began to meet the continued expansion of the number of students enrolled in the future. Overall, we expect Neusoft Education's higher education business revenue to maintain steady growth, reaching 134/15/1.68 billion in 23/24/25, respectively.
The scale of the high-quality education resource export business continues to expand. Neusoft Education's education resource export business revenue reached 182 million yuan in '22, an increase of 30% over the previous year. During the year, Neusoft Education launched professional co-construction and industrial colleges with 69 institutions. The number of cooperative projects increased to 323, covering nearly 25,000 students. Furthermore, the company has set aside 8 colleges and will cooperate in 23 years, and will continue to expand the scale of the education resource export business in the future. Furthermore, in the “Overall Layout Plan for the Construction of a Digital China” issued by the State Council, it is clearly stated “to strengthen the deep integration of industry-university-research led by enterprises; coordinate the layout of a number of disciplines and specialties in the digital field to cultivate innovative, applied, and complex talents.” It is in line with Neusoft Education, which relies on IT solutions and service provider Neusoft Group, exports teaching resources while deepening the integration of education, conforms to the development direction of digital China, and helps the Group rapidly promote its education resource export business. As a professional co-building partnership will continue for 3-4 years, we believe the number of students enrolled in the Neusoft Education Co-Construction Program will also continue to rise, reaching 31/39/47,000 in 23/24/25, respectively, and corresponding business revenue of 23/24/25 reached 263/313/3.7 billion yuan.
Continuing education and training qualifications have increased, and there has been a steady increase in guarantee business. Continuing education business revenue increased 11% year-on-year to $147 million in '22.
The group obtained 13 new training qualifications in 2022, with a cumulative total of more than 60 training qualifications, thus ensuring the steady growth of the To C training business and achieving revenue of about 49 million yuan. Meanwhile, the 2B business remained stable in 2022, completing training for 43 organizations throughout the year, achieving revenue of about 26 million yuan.
Keep buying. We believe that with the excellent quality and reputation of running schools, Neusoft Education's higher education business will continue to grow steadily. The education resource export business will benefit from policy promotion and rapidly expand the scale of cooperative schools. We keep the adjusted net profit forecast of the company to the parent company unchanged, which was 457/531 million yuan for 23/24, respectively. The adjusted net profit forecast for an additional 25 years is $587 million. Maintain the target price of HK$5.17 and maintain the buy rating.
Risk warning: Higher education sector enrollment and tuition fee increases fell short of expectations; asset light business expansion fell short of expectations.