The 2024 provincial examination joint examination announcements have all been disclosed. A total of 203,000 people were recruited nationwide, with an increase of 5.3%, of which the top three were Guangdong 17,000/Sichuan 12,000/Shandong 11,000, respectively, and the top three growth rates of the major provinces were Sichuan +46% /Hunan +36% /Shandong +28%; judging from this year's public examination format:

① The total recruitment rate of about 240,000 people increased by 5.4%, setting a steady increase in the overall market growth, considering factors such as retirement/employment/public employee ratio, etc.; ② We expect the number of references to increase significantly faster than recruitment growth (3 million registrations for the 2024 national examination plus 17% increase, recruitment ratio 77:1), and the number of applicants for the provincial national examination may continue to rise this year; the recruitment ratio has increased, competition is becoming more difficult, and the need to participate in training has increased, stimulating training demand positively; ③ The return of industry supply to rationality in the near two years, competition is gradually orderly; special Along with the upgrading of base classes, etc., there has been an increase in training duration/customer group coverage/training effect/valid customer orders, which is beneficial to the healthy development of the industry;

In addition, the first half of the year included interviews for the Chinese exam and written interview training for provincial examinations, accounting for a slightly larger business scale. Currently, public sector announcements have been gradually disclosed. Unlike previous years, factors such as the epidemic dragged down, the pace of future institutional revenue performance may gradually become clear and clear, and performance stability may improve.

Strong teaching and research system to support product iteration and meet multi-dimensional needs

Huatu Education's innovation and iterative ability is based on a teaching and research system with professional research institutes as the core of research and development; the headquarters professional research institute is responsible for the research and development of basic teaching theories and methods, and other teaching departments provide special support and cooperation around the specific needs of the research institutes. Through long-term accumulation, Huatu Education has formed a standardized product development and promotion process. It can respond quickly to market trends and policy changes to each product, and quickly iterate the development and development of course products.

Maintain profit forecasts and maintain “buy” ratings

Since November 2023, the company has officially launched non-academic training services in vocational education through its wholly-owned subsidiary Huatu Education Technology Co., Ltd., which mainly includes national and local civil service recruitment training, public institution recruitment training, medical and health system recruitment training, and corresponding qualification examination training.

We estimate that the company's revenue for 24-25 will be RMB 0.97 to 112 million, and net profit to mother will be RMB 0.07/013 million, respectively.

Risk warning: the pro bono license agreement failed to be fulfilled as scheduled; education and training business development fell short of expectations; new related transactions; industry policy risks, etc.