Steady growth in revenue and increased profitability
2020H1 realized income of 279 million yuan (+ 9.8%), refunded 33 million yuan of accommodation fees affected by the epidemic, gross profit margin of 64.4% (+ 6.5%), a record high, and three rates remained stable, totaling 28.7% (+ 1.2%). Net profit 104 million yuan (+ 28.4%), plus 9 million yuan listing fees, adjusted net profit 113 million yuan (+ 25.8%), adjusted net interest rate 40.5% (+ 5.1%), profitability continues to improve. The company pays an interim dividend of HK10.00 cents per share, with a dividend payment rate of 36.5%.
The overall performance exceeded market expectations.
The number of students continues to grow, and there is a lot of room for volume and price increase.
There are 19900 students in 2019FY Group, with a CAGR of 9.4% in three years, with a significant increase in endogenesis. The enrollment plan for the 2020 and 2021 academic year increased by 478 compared with the same period last year, mainly due to an increase of 450 students in the program. The total number of 2020FY students is expected to exceed 21000. The third phase of the campus project will start in September 2020 and will be put into use in September 2022. It is expected to accommodate 4000 more students.
In terms of tuition adjustment, the impact of the epidemic has slowed down. Tuition for 5 majors + 30.0% for 3 majors + 41.0%. Students with rising tuition fees account for 20.0% of the total enrollment plan. Undergraduate tuition is the lowest among private colleges and universities in Shanghai. There is ample room for improvement in quantity and price in the future.
The financial structure is continuously optimized and the financing is in good condition.
The company's financial structure continued to be optimized, and the interest-bearing asset-liability ratio dropped significantly to 36.7% (- 6.1%). Medium-and long-term loans accounted for 80.0% of the interest-bearing liabilities, and the interest coverage ratio reached 4.50. The financing condition is good, the average bank loan interest rate is 4.9%, and the unused comprehensive credit and bank loan line has been signed with the bank about 5.1 billion yuan. Good financial structure, excellent financing ability and low financing cost provide strong support for the growth inside and outside the company.
Cover for the first time to give a "buy" rating
The estimated revenue for the 2021-2023 fiscal year is 5.48,7.09 and 811 million yuan respectively. The net profit is 1.82,2.49 and 291 million yuan respectively. The company's closing price of HK $6.85 on August 27th corresponds to a forecast PE of 13.92,10.16,8.69 times for 2021-2023, respectively. For the first time, it covers the "buy" rating, giving the company a reasonable valuation range of HK $6.72 to HK $9.41.
Risk hint
The progress and quality of expansion are not as expected; the progress of the conversion of for-profit colleges and universities is not as expected.