As china's leading higher education group, new higher edu (02001) demonstrates its impressive performance with stable growth in company benefits, achieving breakthrough progress in its undergraduate and master's application work, significantly enhancing its core competitiveness. The recently released performance for the fiscal year 2024 shows that the company's revenue reached 2.41 billion yuan, a year-on-year increase of 13.8%, exceeding market expectations; adjusted net income reached 0.77 billion yuan, a year-on-year increase of 6.1%; the company's net interest-bearing debt ratio further declined to 28.8%, a decrease of 15.6 percentage points compared to last year, while the interest coverage ratio rose to 10.57, indicating effective control of liquidity risk and a sound asset-liability situation. Despite a setback in the group's stock price due to the declaration of a stock dividend, future growth will remain steady and positive, continuously providing stable returns to investors in the long term.

Multiple brokerages have given a "buy" rating, bullish on the future stable growth of higher education.

Multiple brokerages are actively assessing the company's performance, emphasizing that the company's growth is stable, looking to the future for increased investment, and are bullish on the continuous stable growth brought by the improvement of new higher edu's education levels.

HTSC analysis believes that adjusted net income is 0.772 billion yuan, slightly exceeding previous expectations. The group seizes the opportunities in undergraduate and master's programs, increases investment, and is committed to enhancing long-term comprehensive strength and high-quality sustainable development. Capital expenditures will mainly be used for related construction of guizhou schools, promoting master's programs for northeast schools, and undergraduate programs for luoyang and guangxi schools. Continuous optimization of student source structure will also drive steady revenue growth, and it is expected that with the continuous improvement of the student source structure, the main revenue for FY25 will achieve a year-on-year increase of 9%. The target price is set at HKD 3.51, maintaining a "buy" rating.

SWHY analysis believes that the company adheres to high-quality education, continuously optimizing student structure, with the proportion of new undergraduates in fiscal year 2024 increasing by 4 percentage points year-on-year. Future increases in educational investment will enhance the level of education, with guizhou schools successfully upgrading to undergraduate status a year early, beginning its first batch of undergraduate admissions in September 2025. The company will have two undergraduate schools undergo education quality assessment, and the company also intends to upgrade its vocational schools to undergraduate status. The target price is set at HKD 2.99, maintaining a "buy" rating.

China international capital corporation analysis believes that the company's fiscal year 2024 revenue exceeded expectations, mainly due to higher-than-expected tuition income. In the future, with continuous optimization of the student structure, it is anticipated that the company's main business revenue will record a 9% year-on-year growth in 2025, maintaining an "outperform large cap" rating.

The company's financial conditions are healthy, with stable cash and debt indicators. The performance announcement shows that the company's net debt ratio further declined, with the ratio of net interest-bearing debt to net assets falling from 44.4% in FY23 to 28.8% in FY24. At the same time, the company has ample cash reserves, and the interest coverage ratio has significantly increased, with the ratio of EBITDA to financing costs rising from 8.77 in FY23 to 10.57 in FY24, further reducing liquidity risk. The total funds to short-term interest-bearing debt ratio rose from 0.99 in FY23 to 1.56 in FY24. The company's asset turnover ratio has increased for three consecutive years, reaching 28% in FY24, indicating a significant improvement in operational efficiency.

The level of education continues to improve, supporting the long-term stable growth of the business, and the low valuation provides a good opportunity for layout.

In light of the current changes in population structure and the rising demand for higher education, the company chooses a long-term approach based on current conditions, taking advantage of opportunities for bachelor's degree approval in its existing schools in guizhou and the approval of master's programs in its schools in yunnan. It firmly establishes a high-quality development strategy, continuing to lay out the application for master's degrees for undergraduate schools and bachelor's degrees for vocational schools, in order to face the pressure of the medium to long-term external environment and ensure stable performance in the future.

The core business of new higher edu is steadily growing, with its current valuation (TTMPE at 1.75) at a historical low, which is very attractive and provides a good opportunity for investment. As the company's business steadily develops and the level of education gradually increases, its long-term value is expected to continue to be released, and it is anticipated that investor confidence will further enhance in the future.

Summary: Policy support, stable growth, bullish in the long term.

The average tuition fee per student of the company has been steadily increasing. In the 2024/2025 academic year, the total number of students in the company's schools is approximately 0.139 million, with the proportion of new bachelor's degree students increasing by 4 percentage points, and the proportion of undergraduates among enrolled students increasing by 1 percentage point. In addition, the proportion of students recruited from outside the province by the group's schools continues to rise, and many schools have minimum admission scores far exceeding the provincial control line. With the gradual improvement in the level of education in the future and the support of favorable national policies, the company is expected to maintain stable organic growth in the coming years.