The control of state-owned assets has been strengthened, and the development of educational business has been standardized. Through "entrusting management + increasing holdings in the secondary market", Hai Guo Investment controlled 30% of the company and replaced Badaishi as the company's controlling shareholder. Haidian SASAC holds 51% of the shares in the eight major areas and holds 100% of Haiguo Investment. Haidian state-owned assets have strengthened its control over the company. With the strong support of shareholders, the company has realized the standardized development of educational business through "sponsor change + educational service", and the company has realized educational income through campus rent, quality courses, brand royalties, catering services and so on. and increased the development of non-disciplinary training and vocational education, the company's business income "squat"

After that, it showed rapid growth, and its profitability continued to increase. From the first quarter of 2022 to the second quarter of 2023, the company's quarterly operating income was 1048, 4928, 5612, 5591, 6823 and 59.75 million yuan, respectively, up-88.91%,-52.2%,-18.41%, 212.18%, 550.92% and 21.23% respectively over the same period last year. Gross profit margins were-217.38%,-11.96%, 10.44%, 14.35%, 20.49% and 22.09%, respectively.

Haidian Kevin is basically full, and Chaoyang Kevin runs on two tracks. Haidian Kevin adopted the school-running mode of marrying a famous school-- Tsinghua affiliated Middle School. It first opened in September 2016, and realized a rapid school with the help of the influence of Tsinghua affiliated Middle School. Haidian Kevin covers an area of 260000 square feet, with a capacity of about 1200 people, and is expected to have more than 1100 students by the end of 2022. In 2022, Kevin Zhixin, a Haidian Kevin service company, achieved an operating income of 60.05 million yuan, a net profit of 16.95 million yuan and a net interest rate of 28.22%. It is expected that its performance will continue to grow in the future. Chaoyang Kevin adopts the school-running mode of self-construction, self-management and self-brand, with a total construction area of about 280000 square meters and a total investment of nearly 3 billion yuan, forming 1.391 billion yuan of fixed assets, 998 million yuan of intangible assets and 318 million yuan of holding property. Chaoyang Kevin is affected by the regional environment, school-running mode and other factors, the scale of students has not been high, coupled with the heavy assets of running a school, is the main source of losses. In order to improve the utilization rate of school buildings, the company launched a domestic boutique high school, enrolling 120 students for the first time, realizing the "international + domestic" double-track school system, which will help Chaoyang Kevin to make a profit as soon as possible.

Vigorously develop quality education and actively lay out vocational education. The company has unique quality education resources, ski resorts and ice hockey rinks, and has established a good cooperative relationship with Berkeley Conservatory of Music, Beijing Primary and Middle School Sports Association and other trade associations. It has strong competitiveness in art, sports, camps and other aspects, and the company has great potential to develop quality education. The company's training business income in June 2021-2023 was 3072 yuan, 3036 yuan and 36.24 million yuan respectively, an increase of 115.44%,-1.18% and 227.20% respectively over the same period last year. It is expected that the training business will maintain rapid growth in 2023. At the same time, the company actively responds to the national call and actively arranges vocational education. at present, the company has established industrial colleges in cooperation with 11 colleges in Beijing, Shandong and other places, covering undergraduate, higher vocational and secondary vocational schools.

At the same time, the company has established a strategic partnership with Tencent and Baidu, Inc. to create an operation platform for "Internet + vocational skills training" and train new types of practical talents in the digital economy.

The revaluation of assets is higher, and the future growth is relatively certain. By the end of June 2023, the company's total assets were 3.114 billion yuan, mainly from 344 million yuan of monetary funds, 1.776 billion yuan of holding real estate and 245 million yuan of long-term prepaid expenses. among them, the holding real estate mainly refers to the school assets of Chaoyang Kevin, three office buildings and their land use rights, of which only three office buildings are expected to be revalued at 1.59 billion yuan. At the same time, the company's three major education business development trend is good: (1) Education services: domestic + international double-track operation to improve the utilization rate of school buildings. Through the establishment of domestic high schools, to create a domestic + international double-track school pattern, increase the number of students, improve the utilization rate of school buildings, increase the income of educational services, and help the company grow rapidly. (2) non-disciplinary training: focus on art, sports, camp, travel and other non-disciplinary training, and have unique hardware facilities and gold medal coaches, the development of training business has significant advantages, especially ice and snow sports, it is expected to promote the rapid growth of the company's revenue in the future. (3) Vocational education: in cooperation with giants such as Tencent and Baidu, Inc., the company focuses on developing industrial colleges, realizing the rapid development of vocational education business through the co-construction of disciplines, the integration of industry and education, and practical training bases, and with the help of the advantages of shareholder resources. increase the integration of vocational education.

Investment suggestion: the company's operating income from 2023 to 2025 is expected to be 282.4, 368.6 and 445.1 million yuan respectively, an increase of 64.4%, 30.6% and 20.7% respectively over the same period last year; and the net profit of homing is-16.8,6.4 and 13.8 million yuan respectively, up 82.6%,-138.10% and 114.7% respectively over the same period last year. The EPS was-0.03,0.01,0.02 yuan, the dynamic PE was-152.3, 399.5 and 186.0 times, and the dynamic PS was 9.1,7.0and 5.8times, respectively. The company is currently the only education listed company in the A-share market with international schools as its core assets. K12 education, training business and vocational education are developing well, and are expected to usher in an operating inflection point. Optimistic about Haidian state-owned educational resources, the company's ability to integrate resources, and the development prospects of the company's three major educational businesses, maintain the company's "buy-A" rating, giving it 11.86 times PS in 2023, corresponding to the target price of 5.6yuan.

Risk tips: lower than expected enrollment, poor enrollment, slow growth of tuition fees, serious loss of students and other risks.