On August 5th, Guolonghui reported that Huaxi Securities released a research report stating that due to low valuation and the potential for improvement in tuition fees and net margin, it initiated coverage on China Chunlai (1969.HK) with a "buy" rating. Huaxi Securities pointed out that China Chunlai has three major advantages: (1) location and brand advantages: located in a province with a large source of students and a strong regional brand reputation; (2) teaching and employment advantages: the group has a large and stable supply of teachers and students, comprehensive and rich curriculum quality, and excellent employment rates for its schools, with two master's degree programs approved, proving its teaching level; (3) acceptance of independent colleges: promoting enrollment and performance improvement of the colleges being accepted. China Chunlai has three growth drivers: increased headcount, price increases, and net margin improvement. (1) Increase in headcount: benefiting from the establishment of new campuses, rapid growth of students in transformed colleges, and enrollment at Anyang University Original Campus and Jingzhou University beginning in 2021, the number of students is expected to increase from the current 0.1 million to 0.15 million in the future. The growth in the number of students in the 26th academic year mainly comes from the School of Health, Jingzhou University, Anyang University Original Campus and Tianping College, and it is expected that the number of students will increase from 3699/13718/8118/- in FY23 to 12000/26133/17466/14300 in FY26, with a capacity of about 12000/30000/25000/25000 students in these four colleges respectively, and the company continues to acquire land for expansion, which is expected to drive continuous enrollment growth. (2) Increase in tuition fees: currently, the company's per capita fee is only 0.013-0.015 million yuan, with still large room for improvement compared to schools in the same provinces as its peers. (3) In the future, through debt replacement, the company has room to lower its financial expense ratio.