Incidents:
The company released its 2024 semi-annual report.
Comment:
Revenue and profit grew steadily, and mid-term dividends gave back to shareholders
With 2024H1, the company achieved operating income of 0.389 billion yuan, an increase of 35.16% year on year; realized net profit of 0.136 billion yuan, an increase of 29.19% year on year; realized net profit without deduction of 0.136 billion yuan, an increase of 38.84% year on year. The steady increase in revenue and profit is mainly due to the company's remarkable results in implementing major customer strategies; brand influence has continued to increase since listing, which has had a positive impact on the market, the company's talent team building has been effective, the number of training and consulting business orders is abundant, and the development of training courses and consulting services has increased. From the perspective of cost ratio, the company's 2024H1 sales/management/ R&D expenses ratio was 23.02%/11.34%/2.74%, respectively, -2.39/ -2.33/ -1.21pct year-on-year, respectively. The company's cost control effect was good. The company plans to distribute a cash dividend of 10 yuan (tax included) to all shareholders for every 10 shares, a total cash dividend of 0.118 billion yuan, accounting for 86.7% of the 2024H1 net profit attributable to shareholders of listed companies.
The gross margin of the management training business increased. Looking at the 2024H1 management training/management consulting/other business, the company achieved revenue of 313.27/73.13/3.04 million yuan respectively, with management training/management consulting revenue accounting for 80.44%/18.78% respectively, and the gross profit margin of the management training business was 83.55%, up 1.39pct from the end of '23.
In the first half of 2024, the company achieved remarkable results in its major customer strategy, targeting number one in the industry and number one in the region, tailoring and upgrading products based on the needs of major customers. As of June 30, 19 thematic training sessions were carried out, and in-depth cooperation was reached with over 100 major customer companies. The company is deeply involved in the path of branding and adheres to the iterative upgrading of flagship products. As of June 30, “Concentrated EMBA” and “Principal EMBA” have started a total of 520 and 81 sessions respectively, and the brand advantage has been continuously strengthened. The company insisted on developing a new curriculum. In April, it joined hands with Alibaba DingTalk to launch the “Digital Organization” course; in June, it cooperated with Mr. Masatomo Tanaka, a master of lean management, to take the elective course “New Lean Management” to continuously enrich the curriculum system and provide strong support for the company to maintain its competitive advantage.
As of 24H1, the company's contract debt balance was 1.001 billion yuan, an increase of 4.50% over the end of last year. The number of orders in hand was sufficient, laying the foundation for subsequent performance releases.
Investment advice and profit forecasting
The company is deeply involved in enterprise management training and management consulting business, and has accumulated core competitive advantages in terms of brand, teachers, marketing, etc. The company's on-hand order volume is growing steadily and its brand influence continues to increase. We expect the company to achieve net profit of 0.279/0.357/0.444 billion yuan in 2024-2026, corresponding EPS of 2.36/3.02/3.76 yuan/share, corresponding PE of 15/12/9x, maintaining a “buy” rating.
Risk warning
There is a risk that the number of students enrolled in the course will not meet expectations, the risk of losing instructors, and the risk of increased industry competition.