Chairman of the board of directors to increase the shares of the company + start the buyback of listed companies, indicating the development of confidence.
During the period from 13 July to 14 July (both dates inclusive), Mr. Luo Shi, the executive director, chairman and chief executive of the company, purchased a total of 679000 shares in open market trading at an average price of HK $1.93 per share, accounting for 0.03% of the total issued shares of the Company. As of July 18, 2023, Mr. Luo owned 41.8% of all issued shares of the company.
The Company has decided that during the period from 20 July 2023 to the end of the next annual general meeting of the Company (when the Repurchase mandate will expire) or during the period when the Repurchase mandate is revoked or varied by shareholders at the general meeting, in the light of market conditions and the Repurchase mandate, a maximum of HK $200 million will be used to repurchase shares on the open market from time to time.
The company believes that the current share price is lower than its intrinsic actual value and may not reflect the company's business prospects. This share repurchase plan fully reflects the confidence of the company's directors and senior management in the company's long-term growth and market performance.
The company's FY23H1 (2022-9-1-2023-2-28) revenue was 947 million yuan, an increase of 137%, while the adjusted net profit was 186 million yuan, an increase of 412%. The board of directors recommended that a final dividend of 2.43 cents per share be paid, with a dividend payout ratio of 30%.
Revenue from comprehensive education services and sales of products has increased, promoting rapid revenue growth.
According to the type of income, FY23H1's comprehensive education services revenue is 518 million, accounting for 54.7% of the total, an increase of 202.7% over the same period last year. The main reasons are: 1) the natural increase in the number of senior high school students; 2) the integrated school has set up four for-profit high schools with independent operating licenses and consolidated their financial performance; 3) the company provides comprehensive literacy curriculum services for more than 50,000 people of the right age, including but not limited to Sinology, science and technology, sports and other programs to promote the all-round development of students and train comprehensive talents. Sales revenue 164 million, accounting for 17.3% of the total, including through the online campus mall to provide students with school uniforms, bedding, daily necessities, stationery and other related student supplies 63 million; through channel resources and logistics system to achieve agricultural and sideline products supply and sales 101 million; restaurant operating income 245 million, accounting for 25.9% of the total, an increase of 15.4%, mainly due to the increase in the number of students in the company The management and franchise fee was 19 million, accounting for 2.0% of the total, an increase of 25.9% over the same period last year, mainly due to the increase in revenue due to the company's provision of information services for students to study abroad, and intelligent education services for online marking and personalized homework to external schools.
Focus on high school business, improve operational efficiency, and improve profitability.
The company continues to optimize the operating structure, since the integrated school independent high school with independent operating license, by the end of FY23H1, the company has successfully independent 4 for-profit high schools with independent operating license, and with a consolidated table. At the same time, the company will gradually reduce the enrollment scale of primary and junior high schools. By the beginning of the autumn semester in 2022, the number of registered high school students in the company's school network was 25524, an increase of 48.9% over the same period last year, of which the number of high school freshmen was 11045, an increase of 76.6% over the same period last year.
FY23H1's gross profit margin was 39.2%, an increase of 10.9pct over the same period last year, mainly due to the increase in high school enrollment and operational efficiency. In the future, the company will continue to expand and strengthen its for-profit high school-based business, providing comprehensive operational services for students, including, but not limited to, online campus malls, integrated logistics services, international education and other value-added services.
Maintain earnings forecasts and maintain "buy" ratings.
The company is a leading operator of integrated education services in western China, expanding steadily to 33 cities across the country with its solid layout in Sichuan Province. At the same time, the company actively communicates with overseas education service providers to explore cooperation opportunities, and plans to expand its business overseas. We estimate that the company's FY23-25 revenue is 16.8,23.5 and 3.16 billion yuan respectively, and the adjusted net profit is 3,55,800 million yuan respectively, the corresponding EPS is 0.14,0.26,0.37 yuan per share, and the PE is 17,9 and 6 times respectively.
Risk tips: lower-than-expected enrollment, loss of core executives, fierce market competition, policy changes and so on.
The Company will exercise the Repurchase mandate depending on market conditions and at the sole discretion of the Board and cannot guarantee the time, quantity or price of any repurchase.