Since the National Day holiday, the Ministry of Education has made intensive feedback and declared that private education and private free education have warmed up, and the release of the implementation regulations is expected to be delayed.
We judge that the overall tone is that we support standardizing the development of private education, rather than cracking down on it across the board. Most recently, on December 7, the Ministry of Education responded to the proposal on strengthening joint efforts to educate people and promote the high-quality development of private primary schools, saying, "explore collectivization and build a brand of private education with international influence and competitiveness. The Ministry of Education encourages and supports local private schools to continuously optimize education, improve teaching quality, strengthen exchanges and cooperation, and expand the coverage of high-quality educational resources. "
Sign a contract with Wuhan Honghu Tianli School, which will start in September 2021.
On October 29, Honghu City people's Government and Wuhan Tianli Education Group held a signing ceremony for cooperation in running schools, and Wuhan Tianli Beautiful New Town School signed a contract to settle in Honghu Xintan Economic Development Zone, according to the official website of Honghu Municipal Government.
Wuhan Tianli Beautiful New Town School is founded by Tianli Education and introduced by Honghu Municipal Government. The school is located in the beautiful new city of Xintan Economic Development Zone, with a project land of 163.8 mu and an investment of 500 million yuan. the school designs three sections of primary school, junior high school and senior high school, with about 4000 students, and plans to officially start school in September 2021.
Recently, Tianli completed the fixed increase financing and signed a new school or continued breakthrough.
Recently, the company's rights issue of HK $700 million has been completed for ① to integrate quality education resources at a reasonable price, and ② to expand self-built projects in core cities.
We believe that, on the one hand, the layout and development of high-line cities is conducive to upgrading the strength of Tianli brand, exploring advanced educational concepts, and speeding up low-dimensional development.
On the other hand, the integration and expansion of high-quality educational resources at home and abroad is conducive to enriching the asset structure, achieving a high degree of growth synergy, enriching sources of income, and providing high-quality differentiated services.
Academic education has a clear path of development, and there is always a strong market demand for high-quality educational resources and content. Tianli has proven standardization and expansion capabilities, and has grown rapidly under the standardized development and mature operation.
Maintain earnings forecasts and give buy ratings
Tianli effectively enriches the local education supply by virtue of its own school-running experience, and improves the operational efficiency with the help of the unique flexible advantages of the private sector; on the other hand, it will effectively reduce the pressure on local finance, and most local governments across the country adopt a positive and welcoming attitude towards private education. We estimate that the annual net profit of Tianli FY20-21 is 390 million and 530 million respectively, and the corresponding PE is 36x and 27x respectively.
Risk hint: the enrollment is not as expected, the implementation regulations of the people's Promotion Law have not yet landed, and the core executives are lost.