Summary of events: FY2020 revenue increased by 10.7% over the same period last year, adjusted net profit increased by 555 million yuan over the same period last year, up 10.7% over the same period last year, and home net profit was 193 million yuan, up 53.9% over the same period last year; adjusted net profit was 203 million yuan, up 34.3% over the same period last year, in line with expectations; adjusted net interest rate was 36.5%; cash and equivalents were 715 million yuan, up 113.4% over the same period last year.
Analysis and judgment: the number of contributors from junior college to undergraduate students has increased.
Sub-business income: FY2020 tuition income was 493 million yuan, up 14.85% over the same period last year, accommodation fee income was 47.67 million yuan, down 27.78% from the same period last year, mainly due to the refund of 3.4 million yuan in accommodation fees affected by the epidemic, and other income was 13.85 million yuan, an increase of 136.40% over the same period last year, mainly due to the tax refund of about 2 million yuan.
Volume and price: (1) the number of FY2020 students is 21338, an increase of 7.5% over the same period last year, of which the proportion of undergraduate / junior college / junior college students is 80.95%, 11.94% and 7.10%, respectively. The number of freshmen increased by 446 to 6326, and the enrollment rate of freshmen reached 93.02%. (2) the average tuition fee of FY2020 is 23122 yuan, an increase of 6.9% over the same period last year. The tuition fee for undergraduate / junior college freshmen has been raised from 23, 000-27000 yuan to 23000-38, 000 pound, respectively, from 23, 000-27000 yuan.
Profitability: gross profit margin 60.4%, year-on-year increase in 4.6PCT, affected by higher tuition fees and cost savings; sales / management / financial expense rates decreased to 0.39% 19.41% 10.05%, respectively. The sales expense rate is significantly lower than that of the same industry, mainly due to the outstanding brand power and management expense rate of Jianqiao in Shanghai, which is higher than that of depreciation and amortization, and the higher financial expense rate is mainly due to the bank loan for the expansion of the campus.
Growth driven: the employment rate of the graduates of the class of 2020 is 97.6%, of which 62.6% of the graduates stay in Shanghai, with strong brand strength and high employment rate. (1) increase in tuition fees and enrollment: FY2021 increases the tuition fees of eight majors by about 30% and 40%. In addition, the accommodation fee of the second phase of the school is 5800 yuan higher than the previous 60%, and the accommodation fee of the first phase of the school is raised from 3600 yuan to 4800 yuan. And the third phase of the school building construction plan will begin, including a multi-purpose teaching building, two dormitory buildings with a total of 3984 beds and an auxiliary building for boarding-related services. (2) to acquire and expand the school network:
It is expected that the number of students in suitable target schools will be at least 5000 and the income will be at least 100 million yuan, giving priority to targets in East China, especially in the Yangtze River Delta. (3) expanding new growth areas: FY2021 has established two new undergraduate majors (Health Services Management and Arts and Technology), and two new undergraduate majors were approved in February 2021; in addition, the School of Health Management, the Institute of International Education and the Institute of Education have been established in 2020, and the Institute of continuing Education is planned to be expanded.
Investment advice:
The annual income in 2021-22 was 7.01 yuan, 820 million yuan, an increase of 943 million yuan in 23 years, a net profit of 2.49 yuan and 295 million yuan in 2021-22, and a net profit of 344 million yuan in 23 years. As the company expands and promotes its valuation in the future, it will be given 15 times PE in 2021, corresponding to a reasonable market value of 3.7 billion RMB in 2021, and a target price of HK $8.40 (exchange rate HK $0.84) to maintain "buy".
Rating.
Risk hint
The uncertainty under the influence of the epidemic, the pace of expansion is lower than expected, enrollment is lower than expected, existing business quality control risk, systemic risk.