Zhonghua GroupIs a private higher education institution operator, as of May 12, 2020, a total of 4 institutions, namely, (Guangdong University of Finance and Economics) Chinese Business School, (Guangzhou) Chinese Business College, Australian International Business School and Singapore NYU language school acquired in December 2019. In terms of the proportion of income, the tuition fees and accommodation fees of Huashang College are the main sources of income of China Foreign Exchange.

Therefore, the expansion progress of the new campus of Huashang College in the future is the key to Zhonghui's profit growth.

Huashang College belongs to the "independent college" of China's private higher education, which especially refers to the private higher education institutions offered by non-governmental organizations or private individuals through cooperation with public universities. The public university cooperated by Huashang College is Guangdong University of Finance and Economics.

Guangdong University of Finance and Economics is an institution of higher learning jointly built by Guangdong Province and the Ministry of Justice, featuring business and law. Among them, applied economics, business administration and law are the provincial key disciplines in Guangdong. among the existing 57 undergraduate majors, taxation, finance, international economics and trade, business administration, marketing, accounting, audit, law and e-commerce are the national first-class undergraduate majors. Finance, finance, marketing, accounting and law are national characteristic majors.

Among the 31 undergraduate courses offered by the Chinese Business College in 2018 and 2019, the core courses are economics and management, while the core courses offered by the Chinese Vocational College are accounting, financial management and business English.

Therefore, from the beginning of its establishment in 2006 to the present, the phased victory of Huashang College depends largely on the recognition of Guangdong University of Finance and Economics by students and parents under limited choices.

Therefore, Zhonghui Group once revealed in its prospectus that "after a period of time, Zhonghui Group may consider transforming the Chinese Business College into a private undergraduate independent of Guangdong University of Finance and Economics and terminating its affiliation with Guangdong University of Finance and Economics." investors should be aware that this may lead to the collapse of the investment value foundation of Zhonghui Group.

Of course, this is only a consideration of Zhonghui Group rather than a planned operation, so the focus of short-and medium-term investment is on the expansion of the new campus dominated by China Business College.

The 2019 financial report has shown that Zhonghui is building a new campus of the Chinese Business College in Sihui City, Zhaoqing, Guangdong Province, with a total investment of 800 million yuan. The campus is expected to hold 16000 people and is expected to start operation in September 2020. at the same time, it expects the total number of students to increase by about 3000 in each of the next three years.

According to this data, based on the total number of enrolled students corresponding to the group's revenue and net profit in 2020, regardless of the increase in tuition and accommodation fees, then the corresponding revenue and net profit from 2019 to 2022 are 767 million yuan (235 million yuan), 831 million yuan (255 million yuan) and 895 million yuan (274 million yuan), respectively.

The above is only a simple calculation, and the impact of tuition fee increases should be taken into account in the actual profit growth.

In 2020, the China National report showed that China Foreign Exchange income increased by 18.9% compared with the same period last year, while the total number of students in the same period only increased by 8%. Obviously, its growth was also affected by the increase in tuition and accommodation fees: the income from tuition and accommodation fees at Huashang College increased by 18.5% and 23.9%. Chinese business vocational colleges increased by 15.6% and 38.2%, while Australian international business schools increased by 25.7% and 72.8%.

Well, in the future, the development of Zhonghui Group will not only benefit from the expected new students brought by the Sihui campus, but will also be positively affected by the increase in tuition and accommodation fees, but will the positive impact of the price increase beSustainable? According to feedback from the secondary market, although its share price recently hit an all-time high, the process experienced a collapse of about 38% in February.

On the one hand, it may be the market's suspicion of the sustainability of the price increase, and on the other hand, it may lie in the restrictions of market valuation fluctuations. Judging from the current market price and position of Zhonghui, it is very difficult to obtain excess returns. Investors should stop as soon as they are ready and wait patiently for the next excess income point.