The 2019 results of China's Xinhua Education show that the Group's endogenous growth is still driving: revenue increased 15.8% year on year to 553 million yuan (same below), gross profit increased 13.4% year on year to 261 million yuan, and adjusted net profit increased 14.4% year on year to 296 million yuan. As of December 31, 2019, the number of students enrolled in the Group was 45,200, an increase of 30.2% over the previous year, mainly due to the acquisition of Hongshan University in 2019 and the number of students in the School of Clinical Medicine, which was on the rise. The group has purchased land for the School of Clinical Medicine and Hongshan University, and the new campus is yet to be built. There is still plenty of room for growth in the number of students enrolled in these two schools. We maintain our buying rating with a target price of 3.78HKD, corresponding to the 18x2020 PE forecast. The increase in the number of students enrolled in the two old schools was weak, and the increase in tuition and accommodation fees drove income growth. There was no significant increase in the number of students enrolled at Xinhua University and Xinhua School in 2019. The increase in income was mainly due to an increase in tuition fees and accommodation fees. As of December 31, 2019, the number of students enrolled at Xinhua University and Xinhua School was 28856 and 5583, respectively, up -0.2% and 5.9% year on year; growth in the number of students enrolled at Xinhua University stagnated, mainly due to the decline in the number of continuing education students. In the 2019/2020 academic year, full-time undergraduate fees at Xinhua University increased by 15.5%, and tuition fees at Xinhua School increased 15.4%. The number of students enrolled in the School of Clinical Medicine is on the rise. There is room for future growth. Students enrolled after the 18/19 academic year in clinical medicine schools will benefit from Xinhua Education Group. After acceptance, the group enrolled 575 new students in the first year and more than 1,100 in the second year. It is expected that the number of new students enrolled will continue to rise sharply in the next few years. The group has purchased 227.29 acres of land for the new campus. The new campus is located in the core area of Hefei Binhu Science City. The location advantage is obvious. The first phase of the project has already begun and can accommodate at least 10,000 people. It is expected to be put into use no later than September 2021. The relocation of Hongshan University is in progress. The new campus is expected to open in 2021, and the group will acquire Hongshan College of Nanjing University of Finance and Economics in 2019, and officially take over the operation of Hongshan University in September 2019. The group has acquired about 950 acres of land for use as a new campus to support Hongshan University in completing the transformation work as soon as possible in the future. As of December 31, 2019, the overall design plan for the new campus of Hongshan University and the survey work related to the construction project have all been completed, and construction is expected to begin no later than June 30, 2020. Once completed, the new campus is expected to accommodate at least 20,000 students. Currently, the number of students enrolled at Redhill University is 9054. The Group's endogenous growth rate can be expected in the next few years. The extended mergers and acquisitions will continue until December 31, 2019. The Group has 1.4 billion yuan in cash in hand. The merger and acquisition of Haiyuan Medical University is still under negotiation. Any progress will be announced promptly. The company's merger and acquisition policy has not changed: it insists on acquiring 1-2 companies a year, guaranteeing 1 firm; focusing on undergraduate studies, taking into account others; adhering to the Yangtze River Delta region as the main focus, taking into account other key regions. Without considering mergers and acquisitions, the School of Clinical Medicine and Hongshan University can also provide growth impetus. We expect the Group's total revenue for the next three years to be 562/6.37/701 million yuan, with a year-on-year growth rate of 12.9%/13.4%/10.1%, respectively; adjusted core net profit is 2.93/3.43/388 million yuan, respectively, with a year-on-year growth rate of 14.9%/17.2%/13.1%. We maintain our buying rating with a target price of 3.78HKD, corresponding to the 18x2020 PE forecast.