This report is read as follows:
2023H1 is in line with expectations, the growth rate of new recruits is gradually restored, and the revenue-driven stamina is expected; staff compensation and marketing are put in front, and the expense rate is expected to be gradually optimized.
Summary:
The performance is in line with expectations and the rating is "increased". Considering that there is a certain lag in the recovery of the income side of the new recruitment, and there is still some pressure on the pre-profit side of the marketing and faculty reserve in the short term, it is estimated that in 2023-2025, the EPS is expected to reach 0.21x0.33x0.40 yuan, which will be valued at 2023 20x PE, with a target price of 4.20 yuan / 4.52 Hong Kong dollars. In the long run, the company relies on strong brands, industry competition is expected to slow down, profit repair is worth looking forward to, and maintain the "overweight" rating.
Performance summary: the company released interim results, 2023H1 achieved revenue of 1.953 billion yuan, an increase of 4.0% over the same period last year, adjusted net profit of 176 million yuan, a decrease of 2.7% over the same period last year, the overall performance was in line with expectations, the decline in new enrollment during the epidemic was a drag, and the income side still had a lagging impact; employees' salaries and marketing investment were pre-reserves, and the profit end was still under pressure.
The growth rate of new moves is gradually recovering, and the potential of income-driven stamina is expected. 2023H1 added 84600 trainers, an increase of 20.0 percent over the same period last year, and an average of 147300 trainers, an increase of 2.6 percent over the same period last year.
From a sub-sector point of view, 2023H1 New Oriental Education & Technology Group Cooking / Xinhua computer / Wantong Auto repair / Omichi / Huaxin Zhiyuan / delicious College respectively achieved an income of RMB 9.19, 3.80, 4.04 and 1.615 million respectively, with year-on-year changes of-3.0%, 4.2%, 24.5%, 2.7%, 26.7%, 9.4% and 97800 / + 20.8%, respectively, with a continuous increase in the proportion.
Employees' salary and marketing are put in front, and the expense rate is expected to be optimized step by step. 2023H1's gross profit margin fell by 1.8pct to 51.1%, mainly due to the increase in staff salaries and benefits, teaching-related consumables and other costs. It is expected that the gross profit margin will improve as the new recruitment continues to drive and optimize the teacher-student ratio. During the campus expansion, New Oriental Education & Technology Group Cooking / Wantong Auto repair / Huaxin Zhiyuan / ou Mandi respectively-1Compact 1According to 1According to one campus. 2023H1 company period expense rate 43.4%/+1.85pct, sales / management / R & D / financial expense rate change from + 2.69/+0.02/-0.13/-0.72pct to 26.27% Accord 13.10% Universe 0.40% Universe 3.66% respectively. The increase in sales expenditure is mainly due to the increase in 23H1 Group's increased advertising resources, travel, meetings and other business activities to recruit more new students. It is expected that as the income contribution of freshmen is gradually reflected, the expense rate is expected to be gradually optimized.
Risk hints: the domestic epidemic repeatedly affects the risk of enrollment and teaching, changes in the industry pattern, market competition aggravates the risk and so on.