The number of students enrolled in the 23/24 school year exceeded 100,000, and the number of students enrolled increased by 22%. The campus network continued to expand, and the company announced the latest enrollment numbers of schools. As of the beginning of the fall semester of 2023, the company provided comprehensive education services for 100,000 students in 50 schools, and the number of students enrolled increased by 21.6% year-on-year; including 37 high schools. At the beginning of the fall semester of 2023, the number of new students enrolled in the company increased by 41% by 19,000.
The increase in the number of students enrolled is, on the one hand, continuing to reserve excellent teachers and improving courses to maintain leading competitiveness; on the other hand, expanding the management network and school usage rate. Currently, 37 high schools are expected to accommodate up to 100,000 high school students.
In addition to the layout in the core area of Sichuan, as of the end of FY23H1, the company's schools covered 33 cities in Inner Mongolia, Shandong, Henan, Guizhou, Jiangxi, Zhejiang, Yunnan, Anhui, Guangxi, Guangdong, Chongqing and Hubei, providing comprehensive education services; it also provides extracurricular courses in music, art, sports and language to training centers.
In the future, the company plans to focus on for-profit high school business and provide comprehensive operating services, including a series of value-added services such as an online campus mall, integrated logistics services, arts and sports guidance, international education, study abroad consulting, and study tours.
The company accelerated business adjustment and high school development, and continued to optimize the operating structure. From the integrated school to a high school with an independent operating license, it had successfully released 4 for-profit high schools with independent operating licenses as of February 28, 2023, all of which were merged; at the same time, the enrollment scale of the affected elementary and junior high schools was gradually reduced. The utilization rate of schools may continue to increase in the next few years, and the scale of business and performance is expected to grow rapidly.
Teacher reserves are being expanded simultaneously, and the results of high-quality teaching are remarkable
The company continues to expand its teaching staff to maintain the quality of education services while expanding campus capacity. As of February 28, 2023, the number of full-time teachers employed in the company's high schools was 1,654.
Students from the company's schools have performed excellently in various academic examinations, competitions and extracurricular activities. Of the 22-year college entrance examination candidates, about 90% of the students exceeded the undergraduate admission score line, and about 60% exceeded the admission score line of a university. Of these, 79 enrolled in the top 50 universities in the world, including Qingbei; diversified studies have begun to bear fruit. 1 sports student was sent to Tsinghua University, and 4 art students enrolled at Tsinghua University of Art. 1 student enrolled at the University of London and 3 at Nanyang Technological University in Singapore.
Adjust profit forecasts and maintain a “buy” rating.
The company is a leading comprehensive education service operator in western China. With its solid layout in Sichuan Province, it has steadily expanded to 33 cities across the country; with the restructuring of its operations and the continued development of comprehensive operating services such as quality education, revenue and performance are expected to expand rapidly.
Based on the rapid growth in enrollment in 23/24, the balanced development of the company's multiple businesses and rapid revenue structure adjustments, we raised our profit forecast; we expect the company's FY23-25 revenue to be 2.1 billion yuan, 2.9 billion yuan, and 4.5 billion yuan (original values were 16.8 billion, 23.5 billion, and 3.16 billion yuan respectively), and net profit after adjustment was 330 million yuan, 560 million yuan, and 870 million yuan (original values were 3, 5.5 million, 800 million yuan respectively), corresponding to EPS of 0.15 yuan and 0.26 yuan, respectively RMB, RMB 0.40 (original values were RMB 0.14, 0.26, and 0.37 yuan/share, respectively), PE was 14.8, 8.8, and 5.6 times, respectively.
Risk warning: Risks such as falling short of expectations in enrollment, loss of core executives, intense market competition, and policy changes.