Core view: The company is generally oriented towards continuous confirmation. Looking at 24, Q2 is expected to be the lowest revenue quarter.

The performance was in line with expectations, and the “gain” rating was maintained. The company achieved operating income of 0.152 billion yuan in the first half of '24, up 18.9% year on year, and achieved net profit to mother of 9.88 million yuan, up 51.0% year on year, in line with expectations. The company's net profit to mother is expected to be 0.01/0.058/0.109 billion yuan in 24-26, corresponding to PE 227.9/38.7/20.6, maintaining the “increase” rating.

Basically, it is oriented towards continuous confirmation. Revenue increased in 24Q2, and net profit to mother was the best situation since listing. The company achieved revenue of 0.075 billion yuan in 24Q2, up 25.8% year on year, and the year-on-year growth rate continued to accelerate (24Q1 revenue increased 12.9% year on year). It achieved net profit of 6.34 million yuan to the mother, and still lost money, but it was the best performance in the second quarter since the company changed its name to Kevin Education in '18.

Q2 is expected to be the lowest revenue quarter of the year, and the revenue boom in the second half of the year can still be expected. 24Q2 revenue was 0.075 billion yuan, down 0.002 billion yuan from 24Q1. From the perspective of Kevin Education's revenue for the four quarters of the year, Q1 and Q4 include the operating income of Beijing Xishan Ski Resort. Q3 In the summer, Kevin School offers quality training courses abroad.

Also, the new school year starts in September. Assuming the enrollment situation for the new school year improves, earnings are expected to be higher in Q4.

Taken together, Q2 is expected to be the lowest revenue quarter of the year.

In terms of performance, the company's long-term loans have not changed, and there was an impairment in 24Q2. In 24Q2, the company's net profit to mother was 6.34 million yuan, with a loss of 2.8 million yuan over Q1. The company's long-term loans at the end of the 24H1 period were 0.59 billion yuan, the same as 24Q1, resulting in no significant reduction in financial expenses. 24Q2 financial expenses were 8.54 million yuan, a decrease of 0.73 million yuan compared to 24Q1. 24H1 caused a credit impairment of 2.75 million yuan due to bad accounts receivable. The basic calculation was in Q2.

The domestic track continues to gain strength and has been authorized by Huawei's ICT certified service partner. Two Kevin schools in Beijing are gradually opening domestic education tracks. Chaoyang Kevin's domestic high school class officially started in the fall of 2023, and the Haidian Kevin Elementary School Mathematics Special Class began in the fall of 2024. In the vocational education sector, 24H1 became Huawei's certified ICT service partner. In addition, the company signed a strategic cooperation agreement with Zhongguancun Institute of Science and Technology Innovation to further increase the company's revenue.

Risk warning: (1) policy risks in the education industry; (2) the risk that the growth rate of the integrated obstetrics and education business falls short of expectations; (3) the risk that enrollment in the new school year falls short of expectations.