Brief comment on performance
The growth of tuition fees and the number of students led to a high increase in income and profits, and the performance exceeded expectations: in 2020, the company achieved an income of 870 million yuan, a year-on-year growth rate of + 21.4%, and a net profit of 560 million yuan, a year-on-year growth rate of + 23.8 The company has maintained a growth rate of more than 30% under the epidemic, mainly due to the high growth in the number of two schools in Guangdong and the contribution of the acquired Harbin school. The adjusted net profit was 610 million yuan, a year-on-year growth rate of + 35.3% (mainly adjusted for the addition of shares to pay 19.05 million yuan and exchange loss of 24.22 million yuan), and the adjusted EBIDTA was 690 million yuan, a year-on-year growth rate of + 31.8%.
High growth in the number of students, outstanding performance in undergraduate and adult education: the number of students enrolled in the company 2020 on 21 reached 93000, + 59.9% compared with the same period last year, of which the total number of students in Guangzhou Institute of Technology and Zhaoqing secondary vocational school was 82000. According to the academic section, there were 39000 undergraduate students, + 64% year-on-year, 6325 junior college students,-7% year-on-year, 8468 secondary vocational school students, + 11% year-on-year, 49000 adult education students, + 98% year-on-year.
Harbin School and Huaibei School are expected to merge in 21 years, and the scale of the company continues to expand: 1) Harbin School: the company acquired 100% stake in Harbin School in January 2020, and is expected to achieve full merger of Q2 in 21 years. The income of Harbin schools in 2020 was 170 million yuan, + 11% compared with the same period last year, and the net profit was 91 million, + 33% over the same period last year. The number of students in the school is 11000, which is + 14% compared with the same period last year. The school has great potential for growth. There is still much room for improvement in tuition fees and the number of students in the future. 2) Huaibei School:
On March 29, 2021, the company acquired 55% of the equity in Huaibei School, with a total consideration of 197 million yuan, with a total consideration of 337 million yuan. Huaibei School is located in Anhui Province with about 5693 students. It is expected that the conversion work will be completed by the end of September 2021 and will be renamed Huaibei Institute of Technology. After the conversion, the number of places is expected to be further increased, and the number of students in five years is expected to reach 16000 students, and tuition fees can also be market-oriented. 3) actively expand new projects: in the future, the company will also continue to expand the acquisition, acquisition, acquisition and landing of undergraduate-level schools in areas where educational resources are relatively scarce in South China and Southwest China, and is expected to land 1 or 2 projects a year.
The comprehensive utilization rate of the school is relatively high, and the construction of the new campus continues to ensure enrollment space: in 2020, the comprehensive utilization rate of the company's school has reached 97% in the 21st academic year, and the third phase of the Xindinghu campus of Guangdong Institute of Technology has been completed in the first half of 2020. It is expected that the capacity of Guangli will be increased by about 2800. In addition, the construction of new dormitories in Gaoyao campus will also be completed in the second half of 2021, with an estimated capacity of 3000 students.
Profit forecast and investment rating: in the next three years, with the merger of Harbin and Huaibei schools, superimposing the strong endogenous growth momentum of Guangdong schools, we expect that the number of students is expected to maintain an annual growth rate of 15%. In addition, annual tuition fees are expected to increase by 5%. To sum up, we have raised the company's 21-22 net profit from 71 million to 760 million. It is estimated that the 23-year net profit is 1.15 billion yuan, compared with the same period last year, + 34%, 24%, 22%, and the latest closing price is corresponding to the 21-23 PE, which is respectively times that of 12-10-8, maintaining the "buy" rating.
Risk tips: the enrollment is not as expected, the integration of M & A projects is not as expected, etc.