The company announced that FY23H1 (2022/9/1-2023/2/28) achieved a net profit of no less than RMB 160 million, an increase of 419% over the previous year. The rapid growth in performance was due to:

① Adjust the business to provide comprehensive services to tens of thousands of students, including quality literacy courses, integrated logistics services, and online campus shopping mall operations; ② Actively optimized the operating structure, completed the independent issuance of high school operating licenses from 4 integrated schools in this period, and their financial results have been consolidated into the Group's comprehensive financial statements.

Since the implementation of the Public Promotion Law in September 2021, the company has accelerated its business restructuring and has now been fully transformed into a comprehensive education service provider; it provides students within the system with a full range of services including quality training, study tours, and comprehensive logistics, as well as various types of high school education.

61 million share options were granted at an exercise price of HK$2.48

On March 10, 2023, the company granted a total of 61 million share options to eligible participants; the exercise price was HK$2.48; the validity period was 10 years from the date of grant; 40% of the share options were owned 1 year after the date of grant; 30% of the share options were vested 2 years after the date of grant; 30% of the share options were vested 3 years after the date of grant; the share options were not attached to any performance targets.

With the exception of 2 million share rights granted to the company's service providers, all the grantees of the remaining 59 million share options are directors or employees of the company, including 30 million copies for Chairman of the Board of Directors Mr. Robin and 7 million for Executive Director Mr. Wang Rui;

The company grants share purchase rights mainly because the grantor has deep experience in the field of education, and the provision of services is conducive to establishing good corporate governance and long-term business development; the grantor's share purchase rights will be vested in batches within 3 years after the grant, so that the interests of the grantee are consistent with the interests of the company and shareholders, and motivate the grantor to work to enhance the company's future competitiveness and business performance.

Since its launch in 2018, Tianli's brand awareness has increased significantly; looking forward to the future, Tianli will expand and strengthen for-profit high schools, provide students with diversified further education services, and insist on strategic expansion across the country. Strengthen teaching and research capabilities in various subjects and continuously improve the Rieter curriculum construction system, enhance the level of school management and the professionalism of the teacher team, and improve the overall quality of running schools.

There were 1,7185 middle and high school students in the 21/22 school year group network, and the number of high school students increased to 25,524 in the 22/23 school year. Currently, Tianli provides comprehensive education services to 43 schools in Inner Mongolia, Shandong, Henan, Guizhou, Jiangxi, Zhejiang, Gansu, Anhui, Guangxi, Chongqing and Hubei. Currently, schools have covered 33 cities. In 2022, about 90% of Tianli's high school graduates surpassed the undergraduate admission score line in China, and about 60% of them surpassed the admission score line of a Chinese university. Among them, 79 high school graduates were also admitted to the top 50 universities in the world, such as Tsinghua University and Peking University, with excellent results.

Raise profit forecasts and maintain buying ratings

Tianli is a leading comprehensive education service operator in western China, providing customers with comprehensive education management and diversified services. With the restructuring of its operation structure and the continued development of integrated operation services such as quality education, subsequent revenue performance is expected to recover rapidly.

Considering the company's rapid recovery in profitability and independent high school returns, we adjusted the profit forecast. The company's FY23-25 revenue is estimated to be RMB 1,68,235,3.16 billion respectively (previously FY23-25's original values were RMB 14.0, 20.0, and RMB 2.58 billion, respectively), and net profit after adjustment was RMB 300 million, RMB 550 million, and RMB 800 million respectively (previously FY23-25 prior values were RMB 2.0, 350 million yuan, and the corresponding EPS was RMB 0.14, 0.26, and 0.37 billion yuan respectively) RMB per share (previously FY23-25 values were 0.09, 0.16, and 0.22 yuan/share, respectively), and PE was 15, 8, and 6 times, respectively.

Risk warning: enrollment falls short of expectations, loss of core executives, fierce market competition, policy changes, etc.