FY2021H1 performance Overview: for the six months ended February 28, 2021, the company realized revenue of 1.183 billion yuan (YOY/+35.9%), adjusted gross profit of 664 million yuan (YOY/38.1%), and net profit of 478 million yuan (YOY/43.2%). The adjusted net profit is 547 million yuan (YOY/+42.7%), the main adjustment items are the related financial expenses arising from the deferred payment of equity acquisition, additional depreciation amortization and exchange gains and losses resulting from the acquisition; the adjusted net interest rate is 46.2% (+ 2.2PCTs), and the interim dividend is not paid.
Endogenous growth remains strong: FY21H1 has a total of 16 schools, 8 undergraduates, 8 colleges and 2 technician colleges, with a total enrollment of 197000 students, an increase of 40.4% over the same period last year, mainly due to the internal growth of the company and the combination of Yingdi International University and Nanchang Film and Television Communication Vocational College. A total of 73000 new students were enrolled, + 49.3% compared with the same period last year, including 99000 undergraduate students, + 38.6% year-on-year, 80,000 college students, + 32.3% year-on-year, and 18000 technician education, + 115.4% year-on-year. The overall utilization rate of school buildings is 86%, which is + 4PCTs compared with the same period last year.
M & A, self-built, managed multi-wheel drive, maintain the trend of high-speed expansion: the company still maintains the momentum of high-speed M & A. at the same time, the company announced merger and acquisition plans for Inner Mongolia Entrepreneurship College, Nanjing Jinken Vocational and Technical College, and Sivana International University. The three projects currently total about 18000 students, with a total income of 310 million yuan, with a total EBITDA of about 87.28 million yuan. It is expected that after three years under the strong operation and management of the company, the EBITDA3.3 will reach 100 million yuan, and the EV/EIBITDA will drop to less than 7 times. In addition, together with the merger and acquisition project of Gongqing College of Nanchang University announced during the period, the project of Baiyin Hope Vocational and Technical College and Xingtai Vocational and Technical College, which will begin in September 21, and the project of Anshun College and Anshun Vocational and Technical College, the company has realized four mergers and acquisitions, two self-construction projects and two trusteeship projects during the year, realizing the combination of light and heavy assets. M & A, self-built, managed multi-wheel drive growth strategy.
Target price HK $3.47, maintain buy rating: the company is currently the company with the largest number of schools among Hong Kong stock higher education companies, and maintains a high rate of expansion, the ability of M & An integration will be further highlighted, we recognize the company's multi-dimensional strength such as M & A, self-construction and trusteeship, and maintain the company's target price of HK $3.47, corresponding to the forecast PE of 21X for 22 years is 30.9x and 26.3x respectively. Up 38.8% from the recent closing price, maintaining the buy rating.