Company Releases 2024 Annual Report

The company's FY24 revenue of 1.693 billion yuan increased 11.6%, and net profit to mother of 0.83 billion yuan after adjustment increased by 5.1%.

The company maintains a stable dividend ratio. It plans to pay a final dividend of HK$0.06 per share and an interim dividend of HK$0.07. The dividend ratio is approximately 28% of adjusted net profit to mother.

Revenue is split, and the fees charged by companies to students usually include tuition, accommodation, and other educational services.

Tuition fees are the main revenue, accounting for 93.8% of the company's total revenue for the year ended August 31, 2024.

Revenue from tuition fees/ accommodation fees/ other education services was 1.587/0.097/0.008 billion, up +12.4%/+5.1%/-34.2% year over year. The increase in revenue was mainly due to the steady increase in the number of students enrolled in Chinese schools and the average tuition fee.

The number of students is growing steadily to promote high-quality employment

As of August 2024, the total number of full-time students enrolled in the Group was 0.076 million, of which about 0.065 million undergraduate students were enrolled, an increase of 10%. Benefiting from favorable vocational education policies and strong student demand, the total number of undergraduate students enrolled in the 2024/25 academic year reached 0.069 million, an increase of 5.4%. The student structure has been further optimized, with undergraduate students accounting for about 90% of the total number of full-time students.

As of August 2024, more than 4,000 companies have been invited to participate in the Group's recruitment campaign, providing more than 0.15 million jobs. Each graduate has an average of about 10 jobs, and the employment rate in 2023 is over 90%. Students are employed by well-known companies such as Ningde Times, Xiaopeng Motors, BYD, Midea, and TCL to deliver high-quality talents to the regional economy.

Build a high-standard modern campus, promote the training of skilled personnel and build a high-standard modern campus through the integration of industry and education. The second phase of the Huaibei School project was put into use this school year, and about 100 additional experimental training rooms were put into use. The Group is committed to building a smart campus. This year, it added 200 virtual cloud desktop multimedia classrooms and standardized examination rooms, and cooperated with online teaching platforms such as Superstar, Premium Course Alliance, and Wisdom Tree to provide online teaching for teachers and students, and effectively improve the level of informatization application.

Group schools have added majors such as artificial intelligence, intelligent manufacturing engineering, and robotics engineering to serve the country's strategic emerging industries. There are more than 3,000 school-enterprise partners, cooperating with 1,000 key enterprises on practical teaching bases. Cooperating companies include Ningde Times, Xiaopeng Motors, BYD, Midea Group, Yum, etc., providing 0.01 million student companies with practical teaching positions every year, increasing investment in education to cultivate highly qualified skilled talents.

Promote internal talent development and build a high-quality teaching staff

The Group attaches great importance to internal talent development. In the 2023/24 school year, more than 300 high-quality teachers were introduced, and the number of intermediate level and above teachers increased markedly. A new teaching supervision office has been established to provide a strong guarantee for improving the quality of teaching. This academic year, key teachers are organized to conduct academic exchanges and training at well-known universities in Singapore, Japan, South Korea, Russia, etc., to broaden international perspectives and improve academic standards.

Achievements in teacher development are remarkable. In the 2023/24 school year, they received about 140 national awards and 260 provincial awards, undertook 120 provincial scientific research projects, and teachers published 834 academic papers, including about 50 papers in core journals. The number of teachers' honors and awards increased markedly compared to last year. The company and the University of Malacca in Malaysia have jointly established a joint doctoral training base to provide doctoral training services for the Group's first 100 teachers.

Looking forward to the future, we will continue to adhere to the path of high-quality development, deepen the integration of industry and education, continue to increase investment in running schools to train skilled talents, and provide strong talents who can contribute skills to the all-round construction of a modern socialist country.

Adjust profit forecasts to maintain “buy” ratings

Based on FY24's performance, the company increased investment in education resources. We adjusted the FY25-26 profit forecast and added the FY27 profit forecast; we expect FY25-26 revenue to be 1.78 billion yuan, 1.87 billion yuan (original value was 1.76 billion yuan, 1.92 billion yuan), net profit to the mother after the FY25-26 adjustment was 0.872 billion yuan, 0.92 billion yuan (original value was 0.83 billion yuan, 0.9 billion yuan), FY25-26 EPS was 0.43 yuan, 0.46 yuan (original value was 0.41 yuan, 0.45 yuan);

FY27's annual revenue was RMB 1.96 billion; adjusted net profit to mother was RMB 0.97 billion; and EPS was RMB 0.48.

Risk warning: Regulatory policies have been tightened; enrollment falls short of expectations; progress in profitability falls short of expectations; changes in cash dividend policies.