Investment highlights: Event: Insight Education (6068.HK) announced its interim results for the 2019 fiscal year ending February 28. The company's revenue for the first half of the fiscal year was RMB 840 million, an increase of 41.1% over the previous year. Achieved net profit of RMB 190 million to mother, an increase of 30.1% over the previous year. Basic earnings per share were RMB 0.09. Revenue growth was strong, and net interest rates were slightly dragged down in the early stages of the new school. The company's 2019H1 revenue was RMB 840 million, up 41.1% year on year, and the growth rate was 22.3 percentage points higher than the same period last year. Among them, tuition fees+accommodation revenue was RMB 580 million, up 38.7% year on year, up 14.4 percentage points from the same period last year; revenue from ancillary services was 260 million yuan, a sharp increase of 46.9% year on year, up 39.4 percentage points from the same period last year. Revenue growth was mainly driven by a steady 32% increase in enrollment and a slight increase of 5% in tuition fees+accommodation fees per student. The company achieved a gross profit margin of 45.3% in the first half of the fiscal year, an increase of 1.1 percentage points over the same period last year. Net profit of 190 million yuan was achieved, up 30.1% year on year. The net interest rate was 22.7%, down 1.9 percentage points from the same period last year, mainly due to the initial drag on net interest rates of newly built schools. The school is expanding steadily, and two schools are mainly building their own every year. By the end of the financial reporting period, the company added 1 new school and operated a total of 11 schools in 9 campuses. The total number of students enrolled increased by 32.2% year on year, and the school capacity increased by 26.5% year on year. Currently, the company has two schools under construction in Yunfu and Foshan, Guangdong. It is expected to bring a maximum capacity of about 20,000 students, providing a guarantee for growth in the next fiscal year. Furthermore, the company has obtained land for education in Chaozhou and Jiangmen, Guangdong, and construction of new schools is already being planned; framework agreements have also been signed with the government in Guangzhou and Zhaoqing, and are in the process of discussing the construction of new schools. Based on favorable policies in the Greater Bay Area, industrial funds help development. The company's main school layout and future expansion plans are all located in the Guangdong-Hong Kong-Macao Greater Bay Area. The release of policies such as the “Outline Development Plan for the Greater Bay Area” is of great significance in cultivating and attracting talents in the region. The influx of outstanding talents will drive demand for high-quality local private primary and secondary schools, and will also bring more high-quality students to the school. The company cooperated with Huiyin Hyde to establish an education industry fund to invest in schools in the Greater Bay Area. The latter's majority shareholder has resources from the Guangzhou Municipal Government, which will help the company expand and obtain better resources. Profit forecast and investment rating: The company's revenue for 2019-2021 is estimated to be RMB 1.66 billion, RMB 2.19 billion and RMB 2.85 billion, with net profit of RMB 380 million, RMB 510 million and RMB 660 million respectively. Net profit growth rates are 22%, 34%, and 29%, respectively. Basic earnings per share are RMB 0.18, RMB 0.25 and RMB 0.32, respectively. Current stock prices correspond to PE 22X, 16X, and 13X, respectively. Covered for the first time, giving it a “Highly Recommended” rating. Risk warning: The expansion of the new school fell short of expectations, and the policy exceeded expectations.