Huatu Shanding: Promoting non-academic training business in an orderly manner. The company's non-academic training business is progressing in an orderly manner, expanding the industrial layout and business development space. Huatu Investment, the controlling shareholder of the company, holds 51% of the company's shares. The actual controllers are Yi Dinghong and Wu Jingyu. In July 2023, the company's actual controller suggested that the listed company choose a high-quality development direction in the field of vocational education to expand new business, and plans to provide comprehensive resource support for this purpose. On September 28, the company established Huatu Education Technology, a wholly-owned subsidiary, to carry out non-academic training services in vocational education, mainly including national and local civil service recruitment examination training, public institution recruitment examination training, medical and health system recruitment training, and corresponding qualification examination training.
Huatu Hongyang Education: One of the leaders in offline non-academic training. Adhering to the “customer-centered” business philosophy, Huatu Hongyang Education has more than 1,000 learning centers in counties and cities across the country, has more than 10,000 highly qualified employees, and has successively launched products and teaching formats such as “module pedagogy” and “red collar training”. Huatu Education Technology plans to launch non-academic training services, including civil service training, public institution training, medical and health system recruitment training, and corresponding qualification training. It is not all Huatu Hongyang education services. Huatu Hongyang Education's revenue for the above business in 2020-2023M1-9 was 17.41, 14.93, 21.03, and 2.05 billion yuan, respectively.
The recruitment and training market is in high demand, with a market size exceeding 30 billion yuan in 2021: According to Frost & Sullivan, in the vocational examination and training market, the recruitment examination and training market reached 30.5 billion yuan in 2021, of which the public officer/public institution/teacher recruitment market reached 121/116/68 billion yuan respectively. It is expected to grow to 50.5 billion yuan in 2026, and the CAGR will reach 10.6%. The number of recruitment/enrolment for the national examination in '24 reached a record high, and training demand is strong. The number of people enrolled in the 2024 national examination was 39,600, +7%; the actual number of references reached 2.252,000, +48% over the same period; the ratio of the number of participants in the examination to the number of recruitment plans was about 57:1.
Investment suggestion: Huatu Shanding (300492.SZ) is a listed company owned by Huatu Hongyang Education. Huatu Hongyang Education is one of the leaders in offline non-academic training in China. The company's wholly-owned subsidiary plans to launch non-academic training business. Huatu Hongyang Education, the controlling shareholder of 2023M1-9, has achieved revenue of 2.105 billion yuan from the corresponding business. With resources such as the “Huatu Education” trademark, the company's corresponding business is progressing in an orderly manner, which is expected to increase the performance of listed companies. Considering that the new business is still in the early stages of development, we tentatively predict that the net profit of the company's original design business from 2023-2025 will be 0.03/0.08/05 billion yuan respectively, covering the first time, giving it an “increased holding” rating.
Risk warning: Listed companies are not progressing as well as expected in developing new business, risk of not being able to use assets authorized without compensation, risk of increased competition in the industry, and risk of changes in regulatory policies.