23H1's performance was in line with the forecast, significantly reducing losses compared with the same period last year; the number of vocational education cooperative colleges steadily increased Kevin Education's revenue of 128 million yuan, an increase of 114.13% over the same period last year; and the net loss of homing was 20.16 million yuan, narrowed by 62.83% compared with the same period last year, which was in line with the performance forecast. The company has a clear strategy to continue to expand the business scale of vocational education while continuing to consolidate the school operation and service capacity and explore the market potential of quality education and training. By the end of 23H1 vocational education cooperative colleges have steadily expanded to 11, the school level covers undergraduate, higher vocational and secondary vocational schools, and the forms of cooperation are increasingly rich and diverse. We maintain the 23-25 income forecast of 3.49, 424, 505 million yuan, BPS 3.77, 3.85, and 3.97 yuan, comparable company Wind consistent forecast, 23e PB average 1.52x, considering the company's vocational education business has just started, give a certain discount, 1.22x 23e PB, target price 4.58 yuan (the previous value 4.78 yuan), maintain the "hold" rating.

K12 school operation service provides a sound basic disk, and quality education business creates differentiated school-running advantages. at the end of March 2022, the company continued to provide operational services for the two Kevin schools after completing the relevant procedures for the change of school organizers. With the stable development of various activities, the company's operating capacity returned to normal in 23H1. Among them, Chaoyang Kevin School will open a high school with high quality in the autumn of 23rd. In the future, the company is expected to lay out more college entrance examination tracks to expand the income of school operation services. In addition, the company continues to expand its quality education business. At the end of the 22nd, the company began to operate Beijing Xishan Ski Resort, and gradually expanded the high-quality quality education courses from inside the school to outside the school. promote sports, art, science and technology training with "Kevin characteristics" to the society, and provide complete K12 stage system camp education, which is expected to further create a differentiated advantage characterized by art and sports training while increasing income.

Relying on the background of state-owned assets and actively opening up vocational education tracks, the number of cooperative colleges has reached 11 companies, relying on the background of state-owned assets in Haidian and the industrial advantages of digital economy in Haidian District, continuously integrating educational resources and industrial resources in Haidian, actively expanding industry-education integration and school-enterprise cooperation with local vocational colleges. As of 23H1, the company has cooperated with 11 colleges and universities in Beijing, Shandong, Henan, Hunan, Inner Mongolia, Sichuan, Shanxi and other places to establish industrial colleges, which cover undergraduate, higher vocational and secondary vocational schools. The specialty setting includes big data technology application, interaction design, digital media technology, virtual reality technology and application, artificial intelligence, UAV application and so on. In addition, the company's marine vocational education has built the first phase of public training base with an area of 2300 square meters in Chaoyang District, and short-term training will be gradually carried out in the second half of 2023. With the improvement of the scale of cooperation in running schools, the company's vocational education income is expected to further increase.

Target price 4.58 yuan, maintain the "hold" rating

We maintain the 23-25 income forecast of 3.49, 424, 505 million yuan, BPS 3.77, 3.85, and 3.97 yuan, comparable company Wind consistent forecast, 23e PB average 1.52x, considering the company's vocational education business has just started, give a certain discount, 1.22x 23e PB, target price 4.58 yuan (the previous value 4.78 yuan), maintain the "hold" rating.

Risk tips: the number of vocational education enrollment is not as expected; the epidemic repeatedly blocked offline teaching activities; teachers and core management personnel lack or loss risk; real estate rental rate is lower than expected.