Incident Overview
In 2022, Jianqiao Education achieved revenue/net profit of 79/225 million yuan, an increase of 15.6%/25.7% over the previous year. The performance was in line with Wind's unanimous expectations. At the end of the term, HK$0.1 per share was distributed, and a total of HK$0.2 was distributed throughout the year. The dividend rate was 32% and the dividend rate was 5%.
Analytical judgment:
The increase in the number of students was mainly due to the contribution of special upgrades, and tuition fees increased after the transfer. Tuition revenue in 2022 was 695 million yuan, up 19.6% year on year; accommodation fees were 80 million yuan, down 13% year on year, mainly due to refunds during the pandemic. The total number of students enrolled in the company in the 2022/23 academic year was 24,467, an increase of 9% over the previous year, mainly due to the contribution of college upgrades (the proportion of undergraduate, college, and college upgrades was 73%/10%/17%, respectively, and the number of students increased by 2%/-4%/76% over the previous academic year). The average tuition fee in 2022 was 28,398 yuan, an increase of 9.8% over the previous year, mainly due to the increase in the minimum tuition fee for undergraduate students from 30,000 yuan to 32,000 yuan, the increase in college fees from 15,000 yuan to 20,000 yuan, and the increase in tuition fees for special courses from 23,000-30,000 yuan to 23,000-38,000 yuan.
Net interest rates have increased, and management expenses rates have continued to rise. (1) The gross margin in 2022 was 63.9%, an increase of 2PCT over the previous year. Mainly due to the increase in tuition fees and the decline in other main business costs during the pandemic, gross margin for the first half of the year was 68%/60%, an increase of 3/2PCT over the previous year. (2) The net interest rate was 28.5%, an increase of 2.3PCT over the previous year. The net interest rate for the first half of the year was 32%/26%, down 0/6PCT from the previous year. (3) The management fee rate increased by 4 PCT to 25% in 2022, mainly due to the increase in the number of company executives and the increase in the average salary standard, but it was basically stable when combined with costs. At the same time, logistics expenses, office expenses and other expenses increased by about RMB 27.1 million, which was used for cafeteria decoration and epidemic prevention materials. The finance expense ratio declined by 3.5PCT to 3.6%, mainly due to a decrease in interest-bearing debt and a reduction in financing costs from 4.34% to 4.2%.
The employment rate remains high. As of August 31, 2022, the employment rate of 2022 graduates of Shanghai Jianqiao University reached 98.9%, of which 66.0% of graduates stayed employed in Shanghai.
Investment advice:
Driven by future growth: 1) The company has completed a commercial transformation, and there is still room to increase tuition fees; 2) The third phase of the school building was put into use in September 2022, and the fourth phase of the school building construction plan began in December 2022. The total construction area is about 86,400 square meters, including a teaching and training building, 3 talent apartment buildings and a multi-purpose R&D center, which is expected to be put into use in the 2024/25 school year. 3) Combining the advantages of industrial clusters in the Lingang region and government support, the company's advantages in integrating industry and education are worth paying attention to. It is also expected that new business models will be expanded after the investment in the next four school buildings.
Considering that the company's performance in '22 was in line with expectations, maintaining the 23/24 revenue forecast of 993/1,069 million yuan, adding 25-year revenue of $1,208 million. Considering the increase in net interest rates in '22, the net profit attributable to the parent for 23/24 was raised from 25/290 million yuan to $27/32 million, an additional 25-year net profit of 3.7 billion yuan, corresponding adjustments of 23/24 EPS of 0.60/0.70 yuan to $0.65/0.77, the new 25-year EPS was 0.90 yuan, 2023 The closing price of HK$3.91 on April 4 corresponds to the 23/24/25 PE of 5.29/4.49/3.83 times (HK$1 = 0.88 RMB), maintaining the “buy” rating.
Risk warning
The enrollment situation is lower than expected, and there is a systemic risk.