The company's performance in 2021 is eye-catching, with an adjusted net profit of 800 million yuan / + 85.7%, mainly due to the merger of the acquisition projects of the company's online education sector. The company's online sector accounts for nearly half of the company's revenue in 2021, and is growing rapidly, and is expected to gradually become the company's main growth driver in the future. Considering that the company's current valuation is at an all-time low, the dividend yield is as high as 6.8% (the average closing price over the past 30 days), and the future performance still has good growth potential, we believe that Minsheng Education has a high allocation performance-to-price ratio at present. Maintain the "buy" rating.
Performance growth exceeded expectations and profits reached an all-time high. 1) income and profit: in 2021, the company achieved an income of 2.394 billion yuan / + 116.2%, a net profit of 608 million yuan / + 379.1%, and an adjusted net profit of 803 million yuan / + 85.7%. The performance increased significantly, mainly due to the acquisition of online education projects. 2) costs and expenses:
In 2021, the gross profit margin of the company is 56.7%/+5.5pcts, the sales / management / financial expenses are 2.43mm 4.71 / 131 million yuan, the expense rate is 10.1%, 19.7%, 5.45%, and the year-on-year change + 8.3/+0.54/-2.4pcts. The main reason is that the completion of the integration of online education subjects leads to an increase in staff salaries and other benefits, as well as promotion and publicity costs. 3) Cash and liabilities: as of December 31, 2021, the company's book cash and equivalents were 3.14 billion yuan, an increase of about 19.7% over the same period last year, while short-term and long-term loans were 1.98 billion yuan. The company plans to pay a dividend of HK5.32 cents per share at the end of 2021, corresponding to a dividend rate of 30%, which is 6.8% based on the average share price over the past 30 days.
The income of the campus sector is growing steadily. In 2021, the company's campus business income reached 1.25 billion yuan / + 13%, and the branch performance reached 620 million yuan. Among them, the tuition / accommodation fee is 1.16 billion yuan / 960 million yuan, which is + 11.9% Universe 48.5% compared with the same period last year.
At present, there are a total of 10 schools in the company's campus education section (7 colleges and universities, 2 secondary vocational schools, and 1 high school), with 101103 / + 9% students in 2021. Split, undergraduate / junior college / technical secondary school or high school / adult education students are 58006x32938x5151x6004, year-on-year change + 3% "27%" 13.7% and16.6%. Looking forward to 2022, we expect campus business to maintain steady growth.
The online education sector already accounts for half of the company. In 2021, the revenue of the online education sector of the company reached 1.142 billion yuan, and the branch performance was 140 million yuan. Among them, the income of distance education / teacher training / online courses / commission / examination and evaluation is 7.99, 0.70 and 0.58 million respectively. At present, seven platforms have been formed in the company's online field:
1) Aopeng Education (distance education service): 1.07 million / + 2.3% of 2021 trainers completed 100% equity integration in January 2021; 2) Duxue Network (MBA China): 606000 new users / + 41.6%, cumulative number of users is about 2.68 million / + 29%. 3) Minsheng online (online education and training):
Covers open education, adult higher education and self-study examination diploma education services, serving about 158000 junior college students / + 18.8% of the native students completed 51% equity integration in September 2021; 4) IT training: more than 3000 high-quality training courses have been built by 2021, with nearly 1,000 high-level industry lecturers and more than 21 million users. 5) HSK&CCAA (Chinese proficiency examination): the examination service scale is about 9 million person-times in 2021; 6) Xiaoai Technology (Human Resources SaaS): by 2021, the platform has occupied more than 1000 human resources enterprises, more than 10,000 employers, linked C-end users and job needs of more than 3 million people, has formed a "recruitment-training-on-the-job" whole-chain training system, and completed 60% equity integration in August 2021. 7) Outstanding courses (Educational Informatization): the company completed the acquisition of 100% equity interest in Yumoshi in November 2021. It mainly provides educational information services and online education support to undergraduate and vocational colleges. At present, there are 370 cooperative colleges and universities, covering 13 million students. Looking to the future, the company plans to further promote the implementation of the digital platform strategy in the field of online education, and create an intelligent, diversified and open teaching management and service platform system to give full play to the advantages of resources, platform and services. we expect the online education business to accelerate development.
Risk factors: the progress of conversion is not as expected; the progress of campus expansion and new enrollment is not as expected; the change of industry policy; the development of online business is not as expected.
Investment suggestion: considering the rapid growth of new acquisitions in the company's online education sector, the core EPS forecast for 2022 and 2023 is raised to 0.23 zigzag (the original forecast is 0.21 yuan for 2022), and the core EPS forecast for 2024 is increased to 0.28 yuan. The company has formed a campus + online dual-drive business model, with better development potential, combined with industry comparable company valuation (hope education 5 times PE, China Kopei 5 times PE), give the company a target price of HK $1.40 and maintain a "buy" rating.