Summary of the event: on March 31, 2021, the company received a notice from the listing examination Center of Shenzhen Stock Exchange that the company's non-public offering met the issuance conditions, listing conditions and information disclosure requirements, and will be reported to the China Securities Regulatory Commission to carry out the relevant registration procedures in accordance with the regulations.

Analysis and judgment:

There are a lot of facts and rumors about off-campus training policy recently, we analyze: 1) resumption of classes and licenses: from the resumption of classes, Haidian Education Commission has announced the first batch of resumption list, although the company has not appeared here, but is actively promoting related work, it is expected to resume classes soon. From the perspective of license, if strict examination and approval is expected in the future, the company, as a compliance enterprise, will have a certain ability to obtain a new license. At the same time, the company does not rule out considering the purchase of existing licenses to further meet the needs of expansion. 2) extend the school service hours: the specific burden reduction policy has not yet been introduced, and the judgment will still be chosen by parents and students. We believe that educational equity is more reflected in a fair selection mechanism than a unified way of learning. In the case of a shortage of teachers in public schools, out-of-school training provides an efficient and diversified supplement to teaching and training, which has sustainable social value, but if the extension of school service hours becomes mandatory. Or bring a certain impact to the out-of-school training. 3) Super-outline teaching is prohibited:

It is more reflected in that the thinking ability of science is imprisoned due to the fixed routine of advanced input, and there are fewer problems in the cultural cultivation of liberal arts, including large languages, but there are still some difficulties in the actual implementation of this policy.

According to the website of the Ministry of Education on March 31, the International Chinese language proficiency Standard for Chinese Education (GF0025-2021) was recently released and formally implemented as a language standard of the State language Commission on July 1, 2021. This "standard" is equivalent to CET-4 and CET-6. Not long ago, the examination Center of the Ministry of Education announced that it would no longer undertake the Cambridge English KET/PET examination, so it is expected that the status of Chinese compared to English will be further strengthened.

Doushen education language business 20Q4 has appeared an inflection point, the improvement trend is expected to continue in 21Q1, such as offline resumption of classes will be further reflected in the summer enrollment in April and May. The landing of this fixed increase is expected to accelerate the pace of corporate management change and governance improvement, and lay a solid foundation for continued expansion in the future.

Profit Forecast and Investment suggestion

Taking into account the decline in non-large language business, the company is expected to have a revenue of 100 million yuan in 20-24-29 and a net profit of-1.98 billion. Optimistic about the promotion of the status of big language and the competitiveness of the company's big language business, the additional landing and the future offline resumption of classes are expected to eliminate the suppressing factors of stock prices and maintain the "buy" rating.

Risk hint

Uncertainty of non-main business divestiture; lower-than-expected pace of store opening; lower-than-expected risk of endogenous improvement; systemic risk.