Event: The company released a performance forecast. The company is expected to achieve net profit for the full year of 2023:

It reached 1.35 billion yuan, up 95.79%-124.8% year on year; net profit after deducting non-recurring profit and loss was 131 million yuan to 151 million yuan, up 87.3% -115.87% year on year.

Comment:

The smart testing business undertakes the construction and upgrading of standardized test rooms and the installation of new equipment. In terms of the smart testing business, the company is speeding up the market layout, and there is a need for product upgrades and new equipment for standardized test room construction. The upgrade of the online inspection system from high-definition to intelligent was gradually implemented. Demand for authentication and smart security gates was rapidly promoted in 23, and configuration peaked in 24 and 25.

Fraud prevention and control equipment can detect abnormal signals in the surrounding area in a green and environmentally friendly manner to achieve accurate attacks. The company's smart testing business orders increased dramatically during the reporting period.

The smart education business is committed to product innovation, and the smart model helps teaching. The company relies on advanced technologies such as AI, artificial intelligence, machine vision, and big data analysis to effectively improve the quality and efficiency of school teaching and teaching management in various aspects such as teaching, learning, management, practice, evaluation, testing, and research. Products such as English-speaking products, smart sports, and physico-chemical laboratories developed by the company are at the leading level in the industry, and are expected to be promoted on a large scale in the future with the gradual implementation of national policies.

The service target continues to expand, and new products on the TO B&C side have entered the promotion period. The company is a partner of the national comprehensive examination platform. It also undertakes the examination platform business in many provinces and prefecture-level cities. The brand influence and popularity within the industry are high, and the entrance advantage is obvious. While undertaking government projects, the company expanded to the B-side and C-side, using intelligent English listening and listening training as an entry point. The “AI English Learning Assistant” was created by the Jaffalingu Education Model Team. It is an English learning tool integrating functions such as oral practice, contextual dialogue, subject training, simultaneous curriculum training, and essay correction to improve learning efficiency and learning quality.

Investment advice: The company is expected to achieve net profit of 1.53/2.23/296 million yuan in 23-25, EPS of 0.38/0.56/0.74 yuan/share, respectively, and the corresponding PE is 32X/22X/17X, respectively, giving a “buy” rating.