（1）出行限制对线下授课有较大冲击，但公司多措并举降本增效，年度大幅减亏。公司核心培训业务为面授课程，22Q4 面授业务阶段性全面暂停，人力、场地等刚性支出造成22Q4 亏损。而公司持续内部优化降本增效、结构性产品调整等年度经营提振计划，22 年整体业绩大幅减亏。（2）公司持续投入课程体系基础研发，加强数字化经营和垂直一体化，巩固公司课程的竞争力。公司产品结构优化，高退费协议班型占比大幅降低。（3）公司探索新业务职教业务取得有效进展。公司通过校企联动、深化产教融合等方式，与河南、四川等高校共建专业，大力推进职业教育新业务。Core views:
China Public Education published its annual report for 2022 and the first quarterly report for '23. (1) The company's revenue in 2022 was 4.825 billion yuan, a year-on-year decrease of 30.19%; the net profit of the mother was 1,102 billion yuan, an increase of 53.49% over the previous year. (2) Q1 of 2023 achieved operating income of 889 million yuan, a year-on-year decrease of 26.73%; Guimu's net profit was 24 million yuan, an increase of 105.24% over the previous year, to reverse losses.
The company's gross margin has increased, costs have been reduced and efficiency increased during the industry headwinds, and ammunition has been stored. The gross margin for '22 was 38.2%, an increase of 10.5 pct over the previous year. The gross margin for 23Q1 was 52.6%, an increase of 14.4 pct over the previous year, mainly due to the gradual recovery of the revenue side and significant results in cost reduction and efficiency. The sales/management/R&D rate in '22 was 28.2%/19.4%/12.3%, respectively. The sales/R&D fee rate decreased by 2.3 pct/2.2 pct, respectively, and the management rate increased by 0.4 pct. The 23Q1 sales/management/R&D expenses ratio was 21.3%/16.1%/8.9%, respectively, down 11.4 pct/10.3 pct/9.7 pct from the previous year.
(1) Travel restrictions have had a big impact on offline classes, but the company has taken many measures to reduce costs and increase efficiency, drastically reducing losses throughout the year. The company's core training business was face-to-face courses. The 22Q4 face-to-face business was completely suspended in stages. Rigid expenses such as manpower and space caused 22Q4 losses. Meanwhile, the company continued to internally optimize annual operating boost plans such as cost reduction and efficiency, and structural product adjustments, and its overall performance in '22 was drastically reduced. (2) The company continues to invest in basic research and development of the curriculum system, strengthen digital management and vertical integration, and consolidate the competitiveness of the company's courses. The company's product structure has been optimized, and the proportion of classes with high refund agreements has been drastically reduced. (3) The company explores new businesses and has made effective progress in the vocational education business. Through school-enterprise linkages and deepening the integration of industry and education, the company has jointly established majors with colleges and universities in Henan, Sichuan, etc., and vigorously promoted new business in vocational education.
Profit forecasting and investment suggestions: The company bucked the trend and strengthened investment and upgrading in human resources, channels, etc. In particular, it strengthened proactive investment in comprehensive new businesses such as postgraduate studies, education upgrading, and vocational skills. The synergies are expected to be gradually unleashed in the future. The net profit attributable to the company in 23-25 is estimated to be 71/12.9/1.64 billion yuan respectively, a year-on-year change of 82.9%/26.7% in 24-25. We gave the company 55x PE valuation in 2023, with a reasonable value of 6.31 yuan/share, giving it a “buy” rating.
Risk warning. The recovery of face-to-face courses fell short of expectations; market competition increased risks, etc.
