It is predicted that the adjusted net profit will increase by 49% compared with the same period last year.
In December 2021 and January 2021, the company completed the merger of Duxue Network and Aopeng Education, respectively, and the online business effectively increased the company's income and profit in the first half of 2021. We expect Minsheng Education's revenue in the first half of the fiscal year 2021 to be 1.15 billion yuan, an increase of 112% over the same period last year. Adjusted net profit is 370 million yuan, an increase of 49% over the same period last year.
Pay attention to the main points
Online ecology continues to improve and build. In the first half of the year, the company completed or made a number of acquisitions: in January, Aopeng Education completed the merger; in June, the company plans to acquire 51% of Minsheng online; in July, the company plans to acquire 51% of Xiaoai Technology. At present, the company's online main bodies include: Aopeng Education, Minsheng online, HSK, Duxue Network, Xiaoai Science and Technology, etc., different platforms provide services with different emphasis. The company currently provides services including online academic education, IT and other vocational ability improvement, vocational qualification certificate training, Chinese proficiency examination services, management joint examinations and professional postgraduate services, online human resources services, etc. The talent training of "enrollment and employment" is closed, and the ecology of online education continues to be rich.
The online education business is progressing smoothly. In the first half of 2021, the company carried out online academic education through Aopeng Education, and its enrollment was mainly divided into spring and autumn. The management said that the spring enrollment of Aopeng Education was carried out smoothly. We expect the company's Aopeng Education, Capital Learning Network and other online business to contribute about 510 million yuan in the first half of the year. We believe that the company's development of online business results are preliminary. In the future, the synergy between the company's online business and campus business is expected to strengthen and promote each other's performance growth.
Offline campus business takes the initiative to adjust the pace. In the first half of 2021, the company's campus business has made steady progress, and we expect the campus business revenue in the first half of 2021 to be about 640 million yuan. At present, the focus of campus business mainly includes the undergraduate evaluation of Chongqing Institute of Humanities and Science and Technology, the conversion of independent colleges, etc., we believe that the company may take the initiative to control the growth of the number of students in order to improve teaching quality and promote the smooth progress of undergraduate evaluation. we expect that the company's offline campus business growth may slow down to a certain extent this year, and the school's potential will be further released after the undergraduate evaluation is passed.
Valuation and suggestion
Taking into account the smooth progress of the company's online business, we raised revenue forecasts of 3.1% and 7.1% to 2.1 billion yuan and 2.37 billion yuan in 2021 and 2022, and adjusted net profit forecasts of 4.4% and 8.3% to 610 million yuan and 720 million yuan in 2021 and 2022. Maintain the outperform industry rating and maintain the target price of HK $2.40 (corresponding to 7.9 times adjusted EV/EBITDA in 2021), with 94 per cent room to rise from the current share price. The current stock price corresponds to the 4.0 times adjusted EV/EBITDA in 2021.
Risk.
The growth of offline enrollment and tuition fees is weak; online business enrollment is not as expected.