业绩超预期，“增持”评级。考虑到新招稳步恢复，加强成本管控利润率优化，上调2024-2026 年EPS 预测为0.19/0.23/0.25 元（原值0.18/0.22/0.24 元），给予2024 年15x PE 估值，上调目标价至2.85元/3.12 港元（原值2.70 元/2.93 港元）。长期看公司依托品牌，行业竞争有望趋缓，利润修复值得期待，维持“增持”评级。Introduction to this report:
The 2024 interim results were better than expected. The company strengthened cost control, significantly optimized cost rates, and continued profit recovery is worth looking forward to.
Key points of investment:
The performance exceeded expectations, and the rating was “increased”. Taking into account the steady recovery of new practices, strengthening cost control and profit margin optimization, the 2024-2026 EPS forecast was raised to $0.19/0.23/0.25 (original value of 0.18/0.22/0.24 yuan), giving a 2024 15x PE valuation, and raising the target price to HK$2.85/ HK$3.12 (original value of $2.70/HK$2.93). Looking at the company's long-term reliance on the brand, competition in the industry is expected to slow down, profit recovery is worth looking forward to, and maintaining the “gain” rating.
Performance summary: The company released interim results. The first half of 2024 achieved revenue of 1.983 billion yuan, a year-on-year increase of 1.6%, and adjusted net profit of 0.278 billion yuan, an increase of 57.9% over the previous year. Profit performance was better than expected, mainly due to: ① the Group adjusted its enrollment strategy during the period, optimized the curriculum structure, and attracted more high-value freshmen to enroll; ② strengthened cost control such as advertising, and optimized cost rates.
The auto repair and beauty industries have both grown, and the proportion of long-term studies has increased. In the first half of 2024, 0.078 million new trainers were added, down 7.7% year on year; the average number of trainees was 0.1448 million, down 1.7% year on year. By sector, in the first half of 2024, New Oriental Cooking/Delicious Academy/Xinhua Computer/Wantong Auto Repair/Fashion Beauty achieved revenue of 9.23/1.59/0.378/0.449/0.04 billion yuan, with year-on-year changes of -2.9%/-0.8%/-4.3%/+11.1%/+142.1%; the three-year average number of trainers was 0.1003 million/ +2.6%, respectively.
Strengthen cost control and significantly optimize cost rates. In the first half of 2024, the company's gross margin was optimized by 1.93 pct to 53.0% year on year, mainly due to strengthened cost control; as more high-value new students enrolled, the teacher-student ratio improved steadily. In terms of campus expansion, New Oriental Cooking/Xinhua Computer/Huaxin Zhiyuan/Omiche/Ormandy had -1/-1/-10/+2 campuses respectively during the period. The company's expense ratio for the first half of 2024 was 39.7% /-3.76pct, and the sales/management/R&D/finance expense ratio changed year-on-year by -2.86/-0.20/-0.13/ -0.56pct to 23.41%/12.90%/0.27%/3.10%, respectively. The reduction in sales expenses is mainly due to the Group's adjustment of enrollment strategies and strengthening advertising cost control.
Risk warning: changes in the industry pattern, increased market competition, risk of enrollment falling short of expectations, etc.
