Introduction to this report:
The 2024H1 performance forecast is in line with expectations, and major customer strategies have achieved remarkable results; class schedules and attendance rates continue to recover, and tuition fee increases can be expected to help continue to release performance.
Key points of investment:
The performance was in line with expectations, and the “gain” rating was maintained. The company's new signings are picking up, maintaining a 2024-2026 net profit of 0.293/0.365/0.442 billion yuan, and maintaining the 2024-2026 EPS of 2.48/3.09/3.74 yuan. Considering the short-term disturbances in the repayment pace of new orders, reference the comparable company's valuation, 20 times PE was given in 2024, and the target price was lowered to 49.60 yuan (original value was 63.22 yuan).
Performance summary: The first half of 2024 is expected to achieve operating income of 0.35-0.4 billion yuan, up 21.47%-38.82% year on year; expected to achieve net profit of 0.13-0.15 billion yuan, up 23.32%-42.29% year on year; net profit without return to mother is expected to be 0.125-0.145 billion yuan, up 27.38%-47.76% year on year. Among them: 2024Q2 is expected to achieve operating income of 0.209-0.259 billion yuan, up 17.37%-45.43% year on year; net profit to mother of 0.106-0.126 billion yuan, up 21.05%-43.89% year on year.
The performance forecast is in line with expectations, and the major customer strategy has achieved remarkable results. The performance forecast for the first half of 2024 was in line with expectations, and the overall performance achieved relatively rapid growth, mainly due to: ① the company achieved remarkable results in implementing major customer strategies in 2024, and major customer orders from Langjiu Co., Ltd. were placed again; ② the company's brand influence continued to increase after listing, which had a positive impact on the market; ③ the company's talent echelon construction was very effective, forming a high-quality system for selecting and cultivating talents, enhancing the professionalism of business personnel and improving customer satisfaction.
Course schedules and attendance rates continue to recover, and tuition fee increases can be expected to help release performance. The big customer strategy has achieved remarkable results, which is conducive to improving the company's brand effect and implementation of the big customer strategy, and driving revenue growth. Since the offline recovery, class schedules and attendance rates have continued to recover, the proportion of new training has increased, new orders have continued to be released, and the sales team has been steadily and actively expanding. In the short term, the pace of repayment of new orders may fluctuate in stages due to changes in the share of major customers; in the medium to long term, the principal's EMBA course price increase in July 2024 has an overall median price increase of about 15%. Based on the estimated course consumption cycle, it is expected that July 2023 and the current round of tuition fee increases will drive continued growth in 2024-2025.
Risk warning: Risks such as underpayment of new orders from major customers falling short of expectations and increased market competition.