Part of 21Q1's business is still affected by novel coronavirus's epidemic situation and policy changes, among which the business of studying abroad and further study has a greater impact, and other businesses recover quickly. In terms of 21Q1's large language business:

① 21Q1 received 90 million in cash, an increase of 87 percent over the same period last year. Among them, OMO business (campus + offline) 74 million, up 124% compared with the same period last year, B2B business increased by 95%, joining business was 2.05 million, down 78% from the same period last year.

② recognized revenue of 128 million, up 43 per cent from a year earlier. Among them, OMO business (campus + offline) 108 million increased by 46% compared with the same period last year. B2B business increased by 118% over the same period last year, while joining business increased by 5.88 million, down 51% from the same period last year.

In the winter vacation of ③ 2021, the total number of students in the campus business was 20900, an increase of 46% over the same period last year; the cumulative number of students in the online business was 58600, and the online business developed rapidly. As of March 31, there were 98 language learning centers and 384 joined learning centers. As the national online and offline courses can be transferred to each other, there is a situation in which some students are transferred to online registration, so the number of campus business applicants is 25500, a decrease of 3.78% compared with the same period last year, while the number of online business applicants in the same period is 94500.

2020 from the perspective of large language business throughout the year:

① received 520 million in cash, down 4.74% from the same period last year. Among them, the campus collected 258 million, a decrease of 15% over the same period last year, online collection of 142 million, an increase of 96% over the same period last year, 25 million for joining business and 72 million for B2B business.

② recognized revenue of $570 million, up 29% from a year earlier. Among them, the branch school 230 million, down 10.64% from the same period last year, 175 million online, an increase of 169.39% over the same period last year, joining 32 million, B2B business 93 million; the number of students enrolled in ③ was 388000, an increase of 24.4% over the same period last year; and 98 language learning centers.

The company's operating income in the first quarter of 2021 was 239 million yuan, an increase of 81.26% over the same period last year, mainly due to the gradual and orderly return to normal of the company's business as the epidemic slowed down. The annual income in 2020 was 1.386 billion yuan, a decrease of 29.97% over the same period last year.

Maintain earnings forecasts and give buy ratings.

In 2020, under the leadership of the board of directors and management, the company closely revolved around the development plan formulated at the beginning of the year to promote the steady development of the main business. Adhering to the historical mission of "changing education with science and technology and humanities", the company uses scientific and technological means to open up the learning scenes inside and outside the school, online and offline, both at home and abroad, and finally realize the grand vision of "inspiring hundreds of millions of young people". We estimate that the EPS of the company in 2021-23 is 0.40,0.56,0.67 and the PE is 18x, 13x and 11x respectively.

Risk tips: loss of core executives; lower-than-expected enrollment; fierce market competition