The company released its semi-annual report

The company's 24Q2 revenue is 0.8 billion (23Q2 is 0.02 billion); the mother is 0.05 billion (23Q2 is -0.001 billion); 24H1 revenue is 1.5 billion (23H1 is 0.032 billion), and the mother is 0.12 billion (23H1 is -0.004 billion).

The non-academic training business constitutes a major revenue increase in performance

24H1's non-academic training business revenue was 1.49 billion yuan, including 0.171 billion yuan in related transaction revenue from Huatu Hongyang commissioned to deliver existing courses, and 1.317 billion yuan after deduction; of this, 1.24 billion yuan was in-person training and 0.07 billion yuan online.

24H1 has a gross profit margin of 57.3%, sales rate of 29.8%, management rate of 16.2%, R&D rate of 1.5%; contract liabilities: As of the end of 24H1, non-academic training contract liabilities of 0.756 billion (excluding tax) increased by 227.89% compared to the end of 2023, including 0.382 billion in course delivery contract liabilities, an increase of 163.03% compared with the end of 2023;

The contract debt relating to passing the exam was 0.364 billion, an increase of 341.18% compared to the end of 2023. The balance of this portion of the contract debt is the upper limit of the amount that can be refunded after the exam results are obtained; the online course contract debt is 10.1072 million, an increase of 252.9% compared to the end of 2023. It is expected that in the future, as course delivery is completed, meeting the revenue recognition requirements will gradually be converted into revenue.

At the same time, in order to meet market demand and improve product competitiveness, the company introduced some “installment payment” courses, which means that part of the training fee is paid first, and then the remaining training fee is paid after the exam is passed. As of the end of 24H1, the maximum training fee of 0.49 billion can be charged after the exam results are obtained.

24H1 collected 2.01 billion dollars in trainee training fees, up to 0.251 billion dollars in monetary funds as of 24H1. Currently, the company has sufficient cash reserves, which can fully guarantee the company's continuous working capital requirements.

As of 24H1, the company has set up more than 500 branches nationwide to carry out training business, with a total of more than 0.19 million trainees. The company's non-academic training business was fully developed, and recruitment examinations were carried out intensively in the first half of the year to provide market guarantees for the company's performance. At the same time, through multi-pronged methods such as scientific management, process optimization, and resource integration, the company not only improved operational efficiency, but also strictly controlled costs and expenses, thus ensuring the profitable performance of the non-academic training business in the first half of '24.

Strong teaching, research and teaching capabilities

In terms of teaching, research and teaching, ① the company has a professional team of teachers; ② the company has established strict standards for teacher growth; ③ the company has a strict teaching and research system; ④ the company has a strict feedback mechanism; ⑤ the company has a complete practical simulation and evaluation mechanism; ⑥ the company provides a full range of learning support. On the product side, always keep up with the development and changing trends of testing, improve the forward-looking and accurate product strategy, and improve the degree of compatibility between product strategy and front-line business.

Strong ability to manage standardized chain operations

The company has outlets in 31 provincial administrative districts across the country, covering more than 300 cities and more than 600 counties and districts across the country, covering more than 1,000 learning outlets, forming a strong scale advantage and brand effect. All outlets have sunk to Tier 4 and 5 cities, and the network layout is in a leading position in the industry.

Vigorously develop university terminal channels

The number of university graduates has increased, and the national and provincial entrance examination recruitment policy favors fresh graduates. Vigorously developing university terminal channels is an inevitable choice. The company now has a full-time college operation team of more than 200 people who are deeply involved in colleges and universities. The company held lectures on career planning, provincial examinations, and national central enterprise exam preparation guidance activities at nearly 1,000 colleges and universities across the country, covering 1.5 million college users, and cooperated with more than 200 key universities to conduct customized college courses.

Maintain profit forecasts and maintain “buy” ratings

Taking into account the company's 24H1 performance, current policies and market conditions, we maintain profit forecasts. We expect to return 0.42 billion, 0.51 billion, and 0.62 billion for 24-26, respectively, and PE 25X, 21X, and 17X, respectively.

Risk warning: policy risk, risk of loss of core executives, risk of market competition, etc.