Event
On April 13, 2020, Kaiyuan shares issued a pre-plan for a non-public offering. The stock price is 6.53 yuan per share, and the number of shares issued is not more than 81.1639 million shares. The issuing objects are Jiang Yong, Zhao Jun, Jiang Sheng and Nanjing Ruisen Investment Management Partnership (limited partnership). The issuing objects were all subscribed in cash. Jiang Yong, Zhao Jun, Jiang Sheng and Nanjing Ruisen Investment Management Partnership (Limited Partnership) subscribed for 2802.45x2205.21Compact 627.87Compact 248086 million shares respectively, with a subscription amount of 1.83Compact 1.44Universe 162m respectively.
Comment
The funds raised are mainly used for the construction project of Heng Enterprise Education online Education platform and the upgrading and renovation project of CUHK's online marketing platform for talents. The total amount of funds raised does not exceed 530 million yuan, of which 300 million is used for the construction of Heng Enterprise Education online Education platform, 70 million for the upgrading of CUHK's elite online marketing platform, and the remaining 160 million is used to supplement liquidity. Vocational education is one of the most policy-supported tracks, and much attention has been paid to the online ability under the influence of the epidemic. Fund-raising projects aimed at online vocational education business are expected to improve operational efficiency and marginal benefits.
After the release, the actual controller changed, and Jiang Yong became the actual controller. After the completion of this offering, Luo Jianwen, Luo Xudong and Luo Huadong directly hold a total of 0.78 million shares, accounting for 18.40% of the total shares; Jiang Yong, Jiang Sheng, Zhao Jun and Zhongda Ruize (for concerted actors) hold a total of 119 million shares, accounting for 27.92% of the total shares. After this release, the actual controller changed, and Jiang Yong became the actual controller of the company.
The introduction of strategic investors is expected to produce synergy and carry out business cooperation. The company plans to introduce strategic investors Nanjing Ruisen, Ruihua Investment and Ruihua Group. Nanjing Ruisen and Ruihua Investment and Ruihua Group are enterprises controlled by the same actual controller. Ruihua Group has carried out cooperation in different forms and many universities to promote the cooperation in the research and development of course products between the company and colleges and universities. at the same time, Ruihua Group has invested in many industrial chains related to online business, and has significant technical resources in cloud computing, cloud services and new media solutions. Ruihua Group also has excellent human resources in the investment and acquisition of vocational education industry or industrial field and project management. Listed companies and strategic investors are expected to establish cooperative relations and coordinated development in corporate governance, business development, product research and development, technology upgrading, investment mergers and acquisitions and so on.
Investment advice: an important change in the company lies in business purification. We believe that with the improvement of the governance structure, if the actual controller will change and concentrate on vocational education, the management is expected to improve. Due to the divestiture of the original main business, the increase in expenses during the growth business development period, the impairment of goodwill, the impact of the epidemic, and other factors, we have lowered our profit forecast by 1587%, 161%, 14% in 19-21, respectively, and the estimated net profit of homing in 19-21 will be-6.30 RMB1.25 pm, respectively, and the 21-year PE valuation will be 14x, maintaining the "Buy" rating.
Risk hint: additional issuance still needs to be approved by the CSRC, goodwill impairment risk, epidemic impact, intensified competition, policy risk, lifting risk (73.24 million shares were lifted on April 2, 2020, accounting for 21.33% of the total share capital). Pledge risk (the proportion of Jiang Yong and Luo Huadong among the major shareholders is more than 60%).
