20H1 realized a total revenue of 293 million yuan, an increase of 8.8% over the same period last year, while the adjusted net profit was 180 million yuan, an increase of 16.9% over the same period last year.
The increase in income is mainly due to the standard of tuition and accommodation fees and the increase in the number of full-time students.
Specifically, according to the type of income, tuition income is still the core source. 20H1 tuition income was 235 million yuan (95.91%, year-on-year + 6.45pct), up 15.32% over the same period last year; accommodation fee income was 10 million yuan (4.09%, year-on-year-6.45pct), down 58.28% from the same period last year.
Other income was 48.17 million, an increase of 25.80% over the same period last year. These include: rental and property management income 8.212 million yuan (17.05%, year-on-year-17.19pct), down 42.44% year-on-year; service income 2.205 million yuan (4.58%, year-on-10.69pct), down 65.33%; government subsidy 173000 yuan (0.36%, year-on-year-19.04pct), 97.86% lower than the same period last year Interest income on financial assets measured at amortised cost was 12.97 million yuan (26.93%, year-on-year-17.49pct), a decrease of 29.91% over the same period last year.
The operating income of Clinical Medical College and Hongshan College was 24.602 million (51.07%, year-on-year + 66.97pct), compared with-6.622 million in 19H1.
As of June 30, 2020, the company has invested in and operated four educational institutions, namely: (I) Anhui Xinhua College (Xinhua College) is a private diploma education university; (ii) Anhui Xinhua School (Xinhua School) is a civilian-run secondary vocational school; (iii) Anhui Medical University Clinical Medical College (Clinical Medical College) is a college jointly operated by the company and Anhui Medical University. And (iv) Hongshan College of Nanjing University of Finance and Economics (Hongshan College) is a college jointly operated by the company and Nanjing University of Finance and Economics.
Downgrade earnings forecast and give buy rating.
The company is a leading private higher education group in the country. In terms of the total number of students, it is also the largest private higher education group in the Yangtze River Delta. As of June 30, 2020, the group had about 43923 students, of whom 39879 were full-time students, an increase of 6.4 per cent over the same period last year.
The enrollment plan approved by the group school in 2020max for the 2021 academic year was 11164 (excluding continuing education courses and secondary vocational education), an increase of about 7 per cent over the same period last year. Among them, the undergraduate enrollment plan is 10764, an increase of 19% over the same period last year. The group school further expands the construction of the new campus in order to increase the school capacity. at present, the construction of the new campus has started, and it is expected that at least 40,000 students will be added when they are completed. As the company has not completed the Haiyuan school acquisition, we downgrade the profit forecast from the original FY20-21 net profit of 430 million and 450 million to 350 million and 430 million respectively, corresponding to 8xpe and 7xpe respectively.
Risk tips: lower-than-expected enrollment, loss of core executives, fierce market competition