The company's revenue for 2023 is 2-290 million yuan, including part of the education business: the company disclosed the 2023 performance forecast. In 2023, the company expects a net profit loss of 58 million yuan to 100 million yuan, an estimated net profit loss of 65 million yuan to 120 million yuan, and a slight profit in 2022. The company expects revenue of 2-290 million yuan in 2023, including architectural design business and non-academic training business. If revenue from the non-academic training business is deducted, the company expects to achieve revenue of 125 to 180 million yuan. Separated in Q4 of 2023, the company expects to achieve revenue of 160 to 250 million yuan, an increase of 294% -521% over the previous year; it is expected to achieve a net loss of 0.5 to 100 million yuan to mother.

The education business is progressing smoothly. By the end of 2023, the contract debt exceeded 200 million yuan: Beginning in November 2023, the company gradually developed non-academic training business through its wholly-owned subsidiary Huatu Education Technology Co., Ltd., mainly including national and local civil service recruitment examination training, public institution recruitment examination training, medical and health system recruitment training, etc. By the end of December 2023, the company had set up 300+ outlets nationwide, with a total of more than 50,000 trainees. The contract debt will gradually be confirmed as the course is gradually delivered revenue.

The company has completed personnel construction and training site operation qualifications in the education sector: since the company announced its expansion into the education business in mid-July 2023, in terms of organizational structure, the company has completed the construction of personnel and teachers, and obtained operating qualifications for training delivery sites. We expect Q1 2024 to have a more obvious education business.

Profit prediction and investment rating: As a leading vocational education leader that has been deeply involved in public examination training for 20 years, Huatu Education has established a brand advantage by providing training course products and full-process consulting services as the main form of offline teaching. The profitability of Huatu Education may continue to improve, and it is expected to benefit from continued strong demand in the examination and training market in the future. According to the 2023 performance forecast, we reduced net profit due to mother in 2023 from RMB 0.02 million to -0.68 million yuan, and raised net profit to mother in 2024-2025 from RMB 0.07/013 million to RMB 0.51/066 million, maintaining the “buy” rating.

Risk warning: Network expansion falls short of expectations, enrollment falls short of expectations, business transition progress falls short of expectations, etc.