Incident: Badachu Holdings, the company's shareholder, and Haiguo Investment, the controlling shareholder of the company, signed the “Share Transfer Agreement” and “Equity Custody Agreement” on September 20, 2024. The agreement stipulated that Badachu Holdings would transfer all of the company's 88,784,808 shares (14.84% of the total share capital) to Haiguo Investment through a non-disclosure agreement at a price of 3.69 yuan/share. At the same time, it was agreed that Badadu Holdings would hold all shareholders' rights and benefits corresponding to the remaining 83,734,486 shares of the company (14% of the total share capital) rights (Excluded) Continue to entrust the sole management and exercise of China's national investment authority.

Management rights have been straightened out, and China's support for listed companies is expected to increase further. Badachu Holdings delegated voting rights for all 28.84% of the company's shares held by Badachu Holdings in February 2021, and Haiguo Investment became the controlling shareholder of the company. Based on confidence in the company's future development, Haiguo Investment increased its share holdings of the company by 1.16% in the secondary market in 2022, bringing the total share share holding voting rights to 30%. However, judging from the right to earnings, China's share is relatively low, and the motivation to support the company is insufficient. After this equity transfer, CICC held 16% of the listed company's shares and 30% of the voting rights. The increase in the shareholding ratio will help invest more resources to support the growth of the listed company. Badachu Holdings holds 14% of the shares and does not participate in the operation of listed companies, but it can share the dividends brought about by the company's growth.

The reform goals of China SDIC's state-owned enterprises are clear, and the company is expected to benefit. The controlling shareholder of the company is an important state-owned asset investment and operation platform for the Haidian district government. The core business segments of the parent company Haidian District Investment Group cover culture and education, low-carbon environmental protection, financial investment, urban services and artificial intelligence, with total assets exceeding 200 billion yuan. At the beginning of '24, China State Investment proposed three 50 billion goals: use three years to achieve a continuous rise in operating income of the entire system to 50 billion, inject 50 billion in healthy assets, and achieve 50 billion yuan in capital market appreciation. After this share agreement transfer rationalizes the relationship between shareholders' voting rights and equity, China State Investment, as the company's largest shareholder and controlling shareholder, will more actively and rhythmically support the company and promote the company's long-term development. The support that China National Investment can provide to the company at the asset, capital, and business levels is expected to gradually be implemented within the next two to three years.

International education and domestic racetracks are developing in parallel, and the number of students enrolled continues to rise. Kevin Education's main revenue comes from service fees at two international schools. The company has been deeply involved in the international education circuit for many years. Haidian School graduates have gone to internationally renowned institutions such as Oxford, Cambridge, and Duke, and Chaoyang Art High School has received top art institutions such as London University of the Arts and Berklee College of Music. Excellent academic performance is the most direct reflection of the school's teaching achievements, bringing word of mouth and influence to the company's enrollment. Chaoyang School began expanding the domestic high school circuit in 2023. Haidian School opened the Elementary School Jingrun Class in '24. The number of students enrolled will continue to increase in the future, and the company's business performance will gradually improve.

Profit forecast: The company's 2024-2026 revenue is expected to be 0.319 billion/0.3904 billion/0.464 billion, with growth rates of 25.81%/22.04%/19.03%, respectively, to achieve net profit to mother of 6.31 million/27.41 million/51.02 million, with growth rates of 112.69%/334.22%/86.13%, and EPS 0.01/0.05/, respectively 0.09 yuan/share.

Risk warning: The company has the risk of changes in industry policies, the risk of insufficient enrollment, and the risk of losing a core team of teachers.