调整期（2016~2020 年）：16 年7 月，公司前身银润投资通过向股东紫光卓远借款23.5 亿元，完成收购学大教育100%股权；19~21 年，金鑫先生通过天津安特增持并受让椰林湾100%股份，通过晋丰文化认购定增，成为上市公司实际控制人。校区在16~18 年保持扩张态势，完成全国化布局；19 年开始逐步收缩。收入增速放缓，16~19 年CAGR 为5.6%，从结构看，部分培训需求从一对一转成小班组。毛利率在27~29%左右。Summary of the report:
A pioneer in personalized education. The company was founded in 2001, listed on the New York Stock Exchange in 2010, and returned to A-shares in 2016. It is the pioneer of personalized education in China, pioneering a personalized “one-on-one” education counseling model and system. By the end of June 2024, it had more than 240 personalized centers in cities. Since 2021, it has also been actively developing the field of vocational education, including secondary vocational education, higher vocational education, integration of obstetrics and education, and vocational skills training.
Rapid large-scale development period (2007-2015): The main business is to provide personalized one-on-one, personalized group classes, international education, etc. to primary and secondary school students (K12), customize tutoring programs according to the needs and characteristics of each student, and match expert teams to implement personalized tutoring. In 2014, the “e-University” online education platform was launched. Offline campuses expanded rapidly, and the CAGR reached 41.8%, expanding the coverage of the regional learning center network to the whole country. The expansion of the campus led to a rapid increase in enrollment, with a CAGR of 59.7%. Revenue experienced high growth, and 14-year business adjustments disrupted the growth rate. The gross margin is around 25-30%.
Adjustment period (2016 to 2020): In July 2016, the company's predecessor, Yinrun Investment, completed the acquisition of 100% of Xueda Education's shares by borrowing 2.35 billion yuan from shareholder Ziguang Zhuoyuan; in 19-21, Mr. Jin Xin increased his holdings and transferred 100% of the shares in Coconut Grove Bay through Tianjin Ante, and became the actual controller of the listed company through Jinfeng Cultural Subscription. The campus continued to expand from 16 to 18 and completed a nationwide layout; it began to gradually shrink in '19. Revenue growth slowed, with a CAGR of 5.6% in 16-19. From a structural perspective, some training requirements changed from one-on-one to small groups. The gross margin is around 27-29%.
Upgrade period after “double reduction” (2021 to present): After the “double reduction” policy was issued, subject training at the compulsory education stage was restricted, and new businesses such as non-subject training and vocational education were laid out. A business structure with personalized education as the core to promote a combination of vocational education, cultural reading, and medical education has gradually been formed. The number of teachers was reduced after a “double reduction”, and increased significantly in 23 years. After 22 years of business adjustments, revenue growth began to resume in '23, and the trend is accelerating. Gross margin increased significantly.
Industry analysis: Policy margins are improving, and fundamentals are regaining new life. On the policy side, on February 8, '24, the Ministry of Education issued the “Regulations on the Administration of Out-of-School Training (Draft for Comments)”; furthermore, the non-subject licensing process pressed the “acceleration button”. Fundamentals, the number of school-age population is growing & the number of ordinary high school degrees is expected to remain high for 10 years. We estimate that the market size of high school subject training in 24 is 180.8 billion yuan, and the CAGR is expected to reach 9.8% in 24-29; the market size of non-subject training is 300.2 billion yuan, and the CAGR is expected to reach 3.1% in 24-29; the market size of college entrance examination repetition is expected to reach 29.1 billion yuan in '29 In billion yuan, CAGR is 7.6%. Looking at listed companies in the industry, profitability is expected to increase as expansion restarts.
Profit forecast and investment advice: The company is a pioneer and leader in personalized extracurricular training. After the “double reduction”, it focused on high school subject training and expanded the field of vocational education. The “double reduction” has led to a clear supply, while demand is still strong, the margins of policy are improving, and the company is expected to fully benefit. Earnings per share for 24-26 are estimated to be 1.66/2.08/2.54 yuan. The current stock price corresponds to a valuation of 26x/21x/17x, covered for the first time, giving it a “buy” rating.
Risk warning: policy risks in the education industry; risk of expansion falling short of expectations; risk of increasing the difficulty of middle vocational enrollment; the impact of macroeconomics on the education industry.