I. Overview of events
The company announced on August 29, 2019 that its operating income reached 1.09 billion yuan, an increase of 13.16% over the same period last year. The net profit attributed to shareholders of listed companies was 50.062 million yuan, an increase of 5.36% over the same period last year. Among them, the company's main business of education and training continued to maintain a good growth trend, with an operating income of 940 million yuan, an increase of 12.7% over the same period last year, accounting for 86.31% of the company's operating income.
II. Analysis and judgment
K12 business is growing steadily, and the pace of remote expansion continues.
K12 education business as a whole has developed steadily, and the national business layout has been continuously recommended. During the reporting period, the operating income of K12 business reached 837 million yuan, an increase of 15.3% over the same period last year, and the net profit attributed to listed companies was 42.7429 million yuan, realizing the steady growth of K12 business revenue. At the same time, during the reporting period, the company added 41 new teaching centers, expanded and relocated 13, and increased the number of directly operated teaching centers to 290, covering Shanghai, Jiangsu and Zhejiang and other areas, promoting the continuation of remote expansion. In addition, several major businesses of the company, such as "Onli Foreign language", "Onli Zhi Cube", "Anli Middle School students" and "Anli Children", continue to maintain a good development trend, actively promote the expansion of business in other places, and optimize the business layout. to lay a solid foundation for tamping the national expansion strategy and promote the sustained growth of the company's performance.
Implement the development strategy of "one body and two wings" and adjust, optimize and integrate the business layout.
Implement the "one body and two wings" development strategy, through the integration of business groups, the use of national expansion and the strength of science and technology to promote the sustainable development of educational business. In order to better cope with the development of the industry with stricter supervision, the company puts forward a new strategy to integrate the existing business department into business groups represented by customer groups, such as middle school students, children and children, online education and quality education. in the future, various business groups are expected to promote the company's business development through cooperation. In addition, during the reporting period, the company completed the acquisition of the Caden American English project, which will further expand high-quality children's education resources, extend the product extension, and enhance the brand influence.
III. Investment suggestions
Maintain the recommended rating. The company's K12 education business develops steadily and expands steadily in different places. It is estimated that the EPS of the company from 2019 to 2021 is 0.41, 0.50 and 0.61 yuan, and the PE corresponding to the current price is 47X/39X/32X. Considering that the PE of Wind A-share education service industry is 40X in 19 years, as a leading enterprise in Shanghai K12, the company has an increasingly perfect governance structure and can enjoy a certain valuation premium and maintain the "recommended" rating.
Fourth, risk tips:
The national business expansion is not as expected, and the supervision of the industry is stricter.