The annual performance achieved steady growth, with annual revenue of 867 million yuan: as of December 31, 2020, the company's income was 867 million yuan, up 21.4% over the same period last year; gross profit was 606 million yuan, up 25.8% over the same period last year; gross profit margin rose to 69.9% from 67.5% in the same period last year; profit attributable to the owner of the parent company was 564 million yuan, an increase of 23.8% over the same period last year The adjusted net profit was 608 million yuan, an increase of 35.3% over the same period last year; earnings per share was 0.28 yuan; and the final dividend was declared of HK $0.12, with a dividend payout rate of about 32.4%.

The number of students is expanding rapidly, and the business of adult education is developing rapidly: the company has Guangdong Institute of Technology, Zhaoqing School and Harbin Petroleum Institute. On December 31, 2020, the total number of schools under the company was 92264, an increase of 60% over December 31, 2019, achieving rapid growth. The rapid growth of the number of students in school is mainly due to: 1) the business of adult education inside and outside the school is growing rapidly, and the total number of students has increased by 92% to 37859 compared with the same period last year. 2) the acquisition of an additional 10674 students from Harbin Petroleum Institute. 3) the substantial increase in the number of undergraduate students in Guangdong Institute of Technology has driven the number of undergraduate students to + 22.8% to 29262, maintaining steady growth.

The outstanding performance of Harbin Petroleum Institute demonstrates the company's post-investment management ability: year-on-year operating income of Harbin Petroleum Institute is from + 11% to 172 million yuan, net profit from + 33% to 91 million yuan, net profit margin from + 900BPS to 53%, and net cash from + 100% to 147 million yuan. All the data are quickly catching up with Guangdong Institute of Technology, confirming its outstanding post-investment management ability. this year, the school has added new off-campus adult courses and textual research training services and successfully passed the undergraduate evaluation of the Ministry of Education, and is expected to increase undergraduate places next year. The opening of post-secondary courses will lead to the continuous growth of the number of students in the school. Assuming that the Harbin Petroleum Institute is consolidated in 2020, the revenue in the simulated report is + 45.5% to 1.04 billion yuan, the gross profit is + 50% to 723 million yuan, and the core net profit is + 35.4% to 608 million yuan.

Target price of HK $8.32, maintain buy rating: Harbin Petroleum Institute was hosted by the company in March 2020 and is expected to complete the merger with Q2 in 2021. Huaibei Institute of Technology is actively preparing for the first enrollment after decoupling. At present, it has won 1500 promoted undergraduates, the largest in the province. The new campus is expected to be put into operation smoothly in the autumn of 2021, driving the company's sustained and steady development. We maintain the company's target price to HK $8.32, with a forecast PE of 18.2x and 15.2x for 2021Unix in 2022, up 52.9% from the recent closing price.