School operation services drive high revenue growth, boutique high school waiting for development; losses continue to narrow

Kevin Education 2023 Q1-Q3 revenue of 191 million yuan, yoy+64.88%, mainly due to the expansion of school operation services and training business; return to the mother net profit of-25.63 million yuan (yoy+57.56%), deducting non-net profit of-27.77 million yuan (yoy+55.47%). Among them, Q3 realized revenue of 63.1 million yuan (yoy+12.43%,qoq+5.61%) and net profit of-5.47 million yuan (yoy+10.97%,qoq+42.70%). The company's revenue in the first three quarters of 23 years is about 55% of our previous forecast. Considering that the enrollment of the first boutique high school in Chaoyang Kevin School is lower than planned, and the campus utilization rate still needs to be improved, we downgrade our revenue forecast for 23-25 to RMB 2.97pm (previous value: RMB 3490.424 million). The corresponding BPS is 3.71 / 3.72 / 3.75 (before 3.7777 / 3.85 / 3.97). Comparable company Wind unanimously predicted that the average 23EPB is 1.46x, considering that the company's vocational education business has just started, giving a 20% discount to 1.17x 23EPB, with a target price of 4.33 yuan, maintaining the "hold" rating.

The enrollment of Chaoyang School's first boutique high school is lower than planned, and the campus utilization rate will be improved by signing an agreement with two Kevin schools in February 22. After completing the change of organizers, the company will continue to provide campus asset operation leasing, brand license, quality education courses, educational consulting services, stadium operation and catering services for the two schools. According to the agreement, in 23-25, the company will charge the two schools a total rent of 1.48 billion yuan, 172 million yuan, 40% of the characteristic high school tuition fee as educational consulting service fee, and 5% of tuition and fees as brand and operation and maintenance support fees. Considering that the growth of the latter two items of income has a high correlation with the growth rate of the number of students, while Haidian School is basically full, and the actual enrollment of the first boutique high school of Chaoyang School is about 2/3 of the original plan, therefore, we downgrade the international school service income forecast for 23-25 to 2.07 million RMB 232,253 million yuan (previous value: 258,000,350 million yuan).

Quality education business continues to expand, raising the forecast of training business revenue. Previously, we assumed that the overall training business (mainly quality education) remained stable in 23-25 years. Considering that the company began to operate Beijing Xishan Ski Resort at the end of the 22nd, and gradually expanded the high-quality quality education courses from inside to outside the school, promoting sports, art, science and technology training with "Kevin characteristics" to the society, and providing complete K12 stage system camp education, it is expected to further create differentiated advantages characterized by art and sports training while increasing income. We estimate that the 23-year training business revenue is expected to double to about 60 million yuan, and is expected to further expand in 25-26 years.

Target price 4.33 yuan, maintain the "hold" rating

We expect the company's 23-25 revenue to be RMB 368 million and RMB 3.75 million for 23-25 and for BPS of RMB 3.71 and 3.72 respectively. Comparable company Wind unanimously predicted that the average value of 23e PB is 1.46x. Considering that the company's vocational education business has just started, it gives a 20% discount and 1.17x 23e PB, with a target price of 4.33 yuan (the previous value is 4.58 yuan), maintaining 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.