Overview of the event: The company issued the annual results announcement for the year ended August 31, 2019 (hereinafter referred to as the annual report): FY2019 revenue was 1,570 billion yuan, up 17.1% year on year, gross profit was 735 million yuan, up 17.7% year on year, net profit was 654 million yuan, up 21.5% year on year; adjusted net profit was 690 million yuan, up 16.5% year on year, and performance exceeded market expectations. Analysis and judgment: Performance exceeded market expectations. The decline in the number of high schools stemmed from the company's strategic adjustments, and the company's revenue growth mainly came from tuition fees, accounting for 84%, an increase of 18.9% over the previous year, mainly due to a 23.2% increase in the number of students; other revenue was 252 million yuan, an increase of 8.2% over the previous year, mainly due to an increase in the provision of school uniforms and other services. The average tuition fee per student in FY2019 was 35,000 yuan, a year-on-year decrease of 5.1%, mainly due to: (1) the average tuition fees charged by Haikou and Luzhou schools acquired by the company were lower than the average of existing schools; and (2) the structural impact of a large number of new students enrolled in primary schools and kindergartens. High school tuition fees fell by 2.9% in FY2019, mainly due to a 9.3% reduction in the number of high schools; tuition fees for middle schools and primary schools increased by 29.1% and 44.7% respectively, mainly due to the opening of two new middle schools and one elementary school in the 2018/2019 academic year, as well as a significant increase in the number of students enrolled in schools in Yancheng, Xi'an and Ordos. This was mainly due to the company's strategic goals of increasing the capacity of high schools directly affiliated with high schools, increasing preparation for high school enrollment, and reducing the demand for students from outside the Maple Leaf system. Thirteen new schools were added, and enrollment increased by 23.2%. In FY2019, Maple Leaf Education had 95 schools, including 15 high schools, 24 middle schools, 25 elementary schools, 28 kindergartens, and 3 schools for foreign children; the total number of schools increased by 13 over the same period last year. The number of students enrolled was 41,200, an increase of 23.2% over the previous year, including 8155 high school students, 8841 middle school students, 18,771 elementary school students, 5096 kindergartens, and 378 students in schools for expatriate children, in line with the 2018/2019 school year expected to enroll students in the 2018/2019 academic year; 63% of the new students enrolled came from newly opened schools in Luzhou and Yancheng in the 2018/2019 academic year, while the rest came from schools in Wuhan, Ordos and Xi'an. The school usage rate was 68.3%, an increase of 3.6 pct over the previous year, mainly due to the significant increase in the number of students enrolled in schools in Wuhan, Yancheng, Xi'an and Ordos, and the increase in the number of students enrolled in mergers and acquisitions in Luzhou and Xiangyang schools. The number of teachers increased 16.2% year over year to 3,433. Actively transforming education regions In accordance with the five-five plan and sixty-five plan formulated by the company, the company has implemented a strategic expansion in China from an independent school to an educational park and from an educational park to an educational region. The core of the Maple Leaf Education Zone is to speed up the establishment of a pyramid shaped student structure, achieve 12 years of consistent education, improve academic performance, and increase internal enrollment rates. In addition, the company has introduced the new Maple Leaf World School curriculum. It is expected that it will take more than 3 years to carry out the world school curriculum from September 2020, and the high school BC course in China will be converted to the Maple Leaf World School course. The first batch of graduates of the company's world school program will receive a Maple Leaf High School graduation diploma approved by Cognia, the world's largest world-renowned school certification body, in June 2023. The investment proposal expects FY20/21EPS to be 0.26/0.3 yuan. Although the current public promotion law has not yet been implemented, policy risks still exist, and the number of high schools in the company is limited by the company's strategic adjustments, and may have shown a downward trend over the past 1-2 years, I am optimistic about the company's management ability. The current valuation includes pessimistic expectations, covering it for the first time, and giving it an “increase in holdings” rating. Risks indicate education policy risks; high school enrollment falls short of expectations; the process of extended expansion falls short of expectations; systemic risks.