The parties to the agreement: Beijing Huatu Hongyang Education and Culture Development Co., Ltd. (Huatu Hongyang); Huatu Education Technology Co., Ltd. (Huatu Education Technology, a wholly-owned subsidiary of Huatu Shanding).
The content of the agreement:
1) Incident: In the field of adult non-academic training where Huatu Education Technology has actually carried out business, Huatu Hongyang has signed an existing course with the students (that is, commissioned delivery of the course). Huatu Hongyang has commissioned Huatu Education Technology to develop and complete delivery to the students;
2) Payment amount: Huatu Hongyang pays Huatu Education Technology the actual cost of implementing the relevant course delivery, plus 15% gross profit, totaling 20 million yuan in installments (within 5 working days); after all commissioned courses have been delivered, Huatu Hongyang pays 115% of the cost within 5 working days after receiving the cost list of Huatu Education Technology after deducting the first installment mentioned above. Also, if the delivery time is longer, it can be instalments.
3) Equipment rental: Huatu Technology Education can lease the operating facilities and equipment (including tables, chairs, teaching aids, projection and display equipment, etc.) from Huatu Hongyang. The rent is the same period of depreciation recorded on Huatu Hongyang's account. The rental period is until March 31, 2024; it can be gifted free of charge to Huatu Education Technology after the lease period expires.
4) Total amount of related transactions: As of December 31, 2023, the total amount of related transactions that have occurred with this related party was RMB 115.83 million, of which: the total amount of related transactions generated by receiving the relevant party Huatu Hongyang's commission to deliver courses was RMB 95.68 million; Huatu Education Technology's procurement of equipment, facilities, and business sites from the related party Huatu Hongyang was RMB 20.15 million. Since the beginning of the year, in addition to the related transactions mentioned above, the amount of other related transactions with related parties is 110,000 yuan.
Earlier, on January 30, the company released a performance forecast. It is estimated to have revenue of 2-290 million yuan in 2023, operating income of 125-180 million yuan after deduction (referring to deducting business income unrelated to the main business, deducting revenue from non-academic training business income from receiving commissioned delivery of existing courses from related parties), net profit to the mother of -0.58 to 100 million yuan, and net profit of non-return to mother of -0.65 to 120 million yuan. The company's performance losses are mainly due to: ① The company has been developing non-academic training business one after another since November 2023, but November-December is not a peak season; ② Training tuition fees confirm revenue according to the course stage, while costs are confirmed according to actual costs. By the end of December 2023, the company's contract debt exceeded 200 million yuan, and it is expected that it can be gradually confirmed in the future.
Profit forecast and investment suggestions: In the future, the company plans to use the Huatu brand to gradually promote the business layout of the recruitment and training industry. The leading effect will be released, which can fully benefit from the growth in industry demand. Since the progress of non-academic education and training related businesses is uncertain, we only forecast the business related to Huatushan Dingyuan Design. We expect net profit of 0.07/012 billion yuan to the mother from 2024-2025, maintaining the “recommended” rating.
Risk warning: Risks such as business recovery falling short of expectations, increased industry competition, and macroeconomic fluctuations affecting consumption.