Investment highlights Our view: FY2019 has added 3 new schools (1 self-build+2 acquired), bringing the total number of schools to 9. FY2020 has opened three more schools, and there is still plenty of momentum for future growth. We expect the company's revenue for the 2020-2022 fiscal year to be RMB 21.0, 25.7 billion, and 3.05 billion yuan, up 24.9%, 22.4% and 18.6% year on year respectively; core net profit will be RMB 5.3, 6.7 and 8.0 billion, up 24.4%, 24.7% and 19.9% year on year, respectively. Maintain the “prudent increase in holdings” rating and maintain the target price of HK$5.5, which corresponds to 20, 16 and 13 times PE for the 2020-2022 fiscal year, respectively. FY2019's performance continues to grow rapidly: in fiscal year 2019, the company achieved revenue of 1,682 billion yuan, an increase of 34.9% over the previous year, exceeding our expectations by 1.1%, of which 68.1% came from tuition and accommodation fees, and 31.9% from supporting services. In fiscal year 2019, the company achieved core net profit of 429 million yuan, an increase of 33.1% over the previous year, exceeding our expectations by 1.2%. The net profit margin declined slightly due to the impact of new CB throughout the year: FY2019's core net profit after adjusting for exchange differences and equity incentives was 429 million yuan, up 33.1% year on year, and core net interest rate reached 25.5%, down 30 bps year on year. In June 2018, the company received HK$500 million CB from Ping An Insurance, which included the company's long-term liabilities throughout FY2019 and raised the financial expense ratio from 4.6% to 6.4%, driving a slight decline in core net interest rates and resulting exchange loss adjustments. It is estimated that in June 2020, HK$200 million will be converted at a 20% discount on the average price for the first 90 days of the conversion date, which will drive the company's financial expenses down slightly and offset previous exchange losses. The number of students is growing steadily, and there are sufficient cash reserves: the company's cash, equivalents, and collateral bank deposits totaled $1.16 billion, with sufficient cash reserves. As of the 2019/20 academic year, the number of company students reached 60,116, an increase of 10.5% over the previous year. It is expected that the company's three new schools in Shunde, Bazhong, and Yunfu will continue to gradually increase the number of students in the 2020/21 school year. The FY2019 final dividend is 0.042 yuan per share, and the valuation is already at an all-time low: the company announced a final dividend of 0.042 yuan per share, with a dividend rate of 47.7%, leading the industry in dividend ratio. Currently, the company's valuation is at an all-time low, only 15 times PE of the core net profit for FY2019. Risk warning: 1) China's education industry is fiercely competitive; 2) corporate acquisitions, self-construction, etc. fall short of expectations; 3) integration of acquisition targets falls short of expectations; 4) changes in national education industry policy; 5) VIE structure policy risks.