I. Analysis and judgment
CICC has become the largest shareholder, and the board of directors plans to change ahead of schedule.
CICC has become the largest shareholder and the company intends to become a non-actual controller. According to the company's announcement on December 12, 2018, CICC Investment and its actors replaced Jiaotong University as the largest shareholder with 22.68% of the shares. Due to the small difference in shareholdings among the top three shareholders of CICC, Jiaotong University and Changjia, they are not satisfied with investors who hold more than 50% of the shares or have more than 30% voting rights in the disposable company, so the company intends to be in a situation where there will be no real controller. In addition, the company will hold an interim shareholders' meeting on January 30, 2019 to consider the proposal for the change of the board of directors and the board of supervisors.
The board of directors will be changed ahead of schedule, and the controlling shareholders and actual controllers of the company will be replaced after the change. According to the company's announcement on January 15, 2019, the company plans to hold a general election to elect the 10th board of directors in advance, with a total of 11 candidates, including 4 nominees from CICC, 3 from Jiaotong University and 3 from Changjia, and 1 from CICC and Changjia. After the end of the transition, the controlling shareholder and actual controller of the company will be changed from Jiaotong University Industrial Group and Shanghai Jiaotong University to no controlling shareholder and actual controller.
The nature of the enterprise will be changed to a non-state-controlled enterprise. After the end of the transition, the nature of the company will no longer be a state-owned holding enterprise. The change of the nature of the enterprise may contribute to the long-term business planning and development of the enterprise, and clarify the future management strategy and policy. CICC is rich in education industry resources, such as CICC Capital and people's livelihood Education to set up an education merger and acquisition fund, which may contribute to the future development of Onli Education.
Deeply ploughing Shanghai and steadily expanding in different places on the basis of what we already have.
The central area of Shanghai has basically been covered, and the expansion of the Yangtze River Delta and mature areas will be accelerated. Onli, as the leader of Shanghai K12 training industry, has basically completed its coverage in the central area of Shanghai. The future will be in the areas already covered by Onli's brand, such as non-directly operated campus cities with Anli Children's English; places such as Shandong and Zhejiang, which already have Anli schools, and areas where the K12 training industry is relatively mature. Will become a key area for remote expansion. Through the establishment of branches, the establishment of flagship stores, and the transformation of non-direct schools into direct schools, to carry out off-site expansion. On the whole, Onli's remote expansion is still steady, but the overall expansion rate will be faster than before.
Early education and STEM are expected in the future, while vocational education and international education maintain the status quo.
The early education center and the STEM center are set up faster, and the vocational education and international education sectors will continue to maintain the existing mode of operation. Onli Education, as a comprehensive education group, continues to increase the market for quality education while accelerating the expansion of other places. Onli STEM, Huizhi Sports, Zhipeixing and other brands have been established. In terms of vocational education, as the company does not have the ability to build an independent school, it will continue to give priority to management output and carry out light asset operation. The international education sector continues to develop its existing business based on Shanghai Fengpu and Huzhou Modern Education Park. Onli Education will continue to dig deep into the field of teaching and training, increase quality education, and steadily develop other fine education industries already involved.
II. Investment suggestions
Cover for the first time and give recommended rating. As a leading K12 teaching and training enterprise in Shanghai and a rare pure education listed company in A share, the company is scarce. The nature of the company plans to change from a state-owned holding enterprise, and CICC will become the largest shareholder, which will be conducive to the improvement of the company's future operating efficiency and the layout of remote expansion. The EPS given to the company from 2018 to 2020 is 0.350.42, and the PE corresponding to the current price is 57X/48X/40X.
Third, risk tips:
The number of enrollment is not as expected, the construction of remote network is not as expected, the uncertainty of industry policy, early education and STEM business expansion is not as expected.