It is proposed to acquire Henan Maotan High School and to realize the double expansion of cities and business models in different places. The company signed a "transfer agreement" with Fang Lin Mushun and Chaolin Education related to Beifan education. it is proposed to acquire the controlling stake of Henan Maotan Senior Middle School Co., Ltd. (60% equity, at a price of 30 million yuan). At the same time, the company and Beifan Education will carry out sprint class business cooperation on its management and vocational schools. This acquisition is a further acceleration of the company's remote expansion. On the one hand, it expands its business territory to ordinary high schools that have never been seen before, and on the other hand, it expands its target cities from Changsha, Hefei and Tianjin to the fourth city, Henan, making steady progress in nationalized expansion. We maintain the company's 2020-2022 homing net profit of 160pm 239pm 286 million, corresponding to EPS 0.54 plus 0.81 plus 0.96, and the current share price to 25.4max 17.0 per cent of PE 14.2 times, maintaining a "buy" rating.

Henan Maotan Middle School: repeat business to create a reputation, promote the gradual growth of general high school business, Henan Maotan high school is mainly engaged in ordinary high school and college entrance examination re-reading business, is a private ordinary high school, the school adopts full-time teaching methods, semi-militarized management. The school covers an area of 86 mu, with a construction area of about 21000 square meters, including teaching buildings, office buildings, dormitory buildings and other infrastructure. The construction of the first phase of the school is expected to hold 3000 people and is expected to be completed in July 2021. The preliminary work of enrollment of the school has been carried out and will be officially put into use in September 2021. According to the transfer Agreement, Chaolin Education is responsible for the enrollment work of the school and promises to enroll 1000 new students in September 2021, including 1000 first-year students and 800repeat students in senior high school, and 1800 new students in September 2022. Among them, there are 200 first-year students in General High School. It can be seen that in the new school, the company plans to mainly operate the restudy business that has been good at before. after being familiar with the local college entrance examination model in Henan and creating a reputation, it will help reduce the difficulty of enrollment and teaching, and promote the gradual growth of Pukao business.

The layout of remote expansion is accelerated, and the leader of the senior high school entrance examination is expected.

The proposed acquisition of Henan Maotan High School is another remote expansion measure after Changsha, Hefei and Tianjin, which accelerates the company's remote expansion layout. In the future, the company will continue to promote the remote expansion of the business of restudy in secondary vocational schools, senior high schools and senior high school entrance examinations. with its closed and strict management model and efficient ability to raise points, Kade Education is expected to come out of Shaanxi and grow into a national leader in the training of senior high school and college entrance examination.

Risk hint: the epidemic affects the enrollment plan; the process of remote expansion is not as expected.