Core view: We believe that although the current stock price does not include profit expectations, there is a clear trend of continuous improvement in the company's performance. The profit inflection point is approaching, and the stock price is expected to break out of the bottom range as fundamentals gradually improve.

Covered for the first time, a “gain” rating was given. We expect the company's revenue for 24/25/26 to be 307/3.85/492 million yuan, growth rate 21%/26%/28%, net profit to mother 0.10/0.58/ 109 million yuan, growth rate 120%/489%/88%. We believe: 1. Since the company changed its name to Kevin Education in 2018, the correlation between the company's stock price and performance is not high, and the current stock price does not include profit expectations; 2. There have been major changes in the company's business model in recent years, and future business and development trends are not reflected in previous financial reports; 3. Kevin's education performance is clearly showing a marginal improvement trend, and the overall stock price is still low. Based on the above, the first coverage was given a “gain” rating.

A diversified education group with the Beijing Haidian State-owned Assets Administration Commission as the actual controller. The actual controller of the company is the Beijing Haidian District State-owned Assets Administration Commission. The main business segments include K12 school operation business, industry-education integration business, and training service business. The K12 school operation business is the operation service of two Beijing Kevin K12 schools and the asset-light expansion of the Kevin Education brand; the integrated maternity and education business is the company's layout in the direction of vocational education, mainly asset-light school-enterprise cooperation projects; and the training service business is non-subject training and the operation of Beijing Xishan Ski Resort.

The business model for Kevin Education is mainly based on the academic year system. The core business of Kevin Education is a school-based education model, which is less flexible but highly sticky. The academic year system is a pay-per-person business model with current students from September to July of the following year as the core customer base. Strong adhesiveness and high stability. However, since it is measured in academic years, the cycle is long and flexibility is weak.

The best investment period for a business model based on the academic year system is during a period of rapid growth in the number of students, and Kevin Education is expected to usher in a high increase in the number of students enrolled. 1. Kevin Education is a K12 international school whose main goal is to go abroad. Enrollment is expected to recover after the pandemic. 2. K12 School's new project, Shanghai School, has been in operation since September 2022 and is in its infancy. 3. The integrated obstetrics and education business currently has a small base of students enrolled, and there is plenty of room for future development.

Risk warning: policy risk, risk that the growth rate of the integrated industry and education business falls short of expectations, risk of delays in research and use of information or untimely updates.