Event: the company released its report for the third quarter of 2018, with operating income of 2.176 billion yuan in the first three quarters, an increase of 37.24%. Net profit of 130 million yuan, up 158.9% over the same period last year, was deducted from 127 million yuan of non-return net profit, an increase of 202.18% over the same period last year. At the same time, it is estimated that the net profit for the whole year of 2018 will be 1.92-215 million yuan, an increase of 170% 190%.
Core ideas:
The main business is stable, the growth in the Martian era is stable, and the performance is driven by the magic vision table: the company's operating income increased by 37.24% in the first three quarters of 2018, mainly because the company acquired an 80% stake in the company's table. At the same time, the Martian era added a new campus with 1200 people in Beijing this year. Q3\ Q4 is due to the steady growth of the Martian era driven by the peak revenue season. The company's comprehensive gross profit margin in the first three quarters was 24.3%, an increase of 3.9pct over the same period last year. At the same time, affected by the consolidated table, sales expenses and management expenses increased by 138.03% and 47.78% year-on-year. Due to the increase in exchange earnings brought about by the appreciation of the US dollar, financial expenses decreased by 77.15%. Taking into account the impact of exchange rate changes, the increase in market demand and the company's adjustment to the export market, the company's traditional main business is expected to maintain steady growth, while the Martian era and Kai Magic Vision form a synergistic effect. the education sector continues to contribute to the company's performance, driving the company's annual performance to maintain rapid growth.
Horizontal extension + vertical expansion to enlarge and strengthen the ecological circle of art design training. Horizontally: the company uses its own excellent teaching resources to jointly establish a mixed ownership college with the school, which is conducive to giving full play to the resource advantages of both sides, further expanding the company's brand advantages, and is expected to expand the company's revenue channels. so as to drive the sustained growth of performance; at the same time, Sun's small Mars Company extends the course population to teenagers, laying the foundation for future expansion. Vertically: the company successfully acquired Kaishi Vision, extended downward along the digital training education industry chain, and laid out the field of vocational training. Martian era and Kaishi Vision have carried out in-depth coordination in the aspects of talent transfer, training content, brand promotion and industry resource sharing, and the gross profit margin has increased significantly. Therefore, through the horizontal and vertical layout, the company is expected to expand and strengthen the art design ecology and drive the sustained growth of performance.
Profit forecast and valuation: we estimate that the company's 2018-2020 pro forma return net profit is 255,315 million yuan, corresponding to EPS of 0.52 yuan 0.64 plus 0.80 yuan per share, and corresponding PE to 15-12-10 times. We are optimistic that the company will become bigger and stronger around the art design training ecosystem through endogenesis and extension, giving the 18-year education sector 25 times, the traditional main business 20 times, the target market capitalization 4.7 billion, and maintaining a highly recommended rating.
Risk hint: exchange rate risk, M & An integration is not up to expectations, traditional main business has declined sharply.