Event: the company reported revenue of 1.183 billion yuan in fiscal year 21, an increase of 35.9% over the same period last year; adjusted profit of 547 million yuan, an increase of 42.8% over the same period last year, maintaining high growth under endogenous extension.
Core point of view
The number of students continues to increase and their income increases strongly. The number of students in 20x21 is 196,747 yoybeans 40.4%.
71746 new students (yoy+47.05%), showing the company's strong enrollment ability. Among them, the number of undergraduates is 987.88 million, accounting for more than 50%. Person-time growth led to an increase in income, the annual income in the first half of the year reached 1.183 billion yuan (yoy+35.9%), mainly from endogenous and Yingdi-Nanchang film and television mergers and acquisitions, of which domestic income 1.033 billion (yoy+18.7%), Yingdi income of 150 million.
The increase in capacity utilization led to a rise in gross profit margin. The utilization rate of the company's school premises reached 86 per cent (yoy+4%), driving the adjusted gross profit margin up 0.9 per cent to 56.1 per cent. Enrollment will increase investment to support the operation of new colleges and universities in the group. In September 21, Gansu Baiyin and Xingtai Vocational and Technical Schools will officially start enrollment, new college enrollment will be pre-invested, and at the same time, Yingdi University and Nanchang Film and Television will be merged, resulting in a 3.5% increase in sales expenses to 6.9%. The rate of administrative expenses remained stable at 12.5% (yoy-0.8%). Taken together, OPM fell 1% to 34.8% due to the low profits of Yingdi University and new consolidated institutions.
Sufficient capital reserves and steady pace of mergers and acquisitions. The rights issue was completed at the beginning of the year, raising US $350 million, and the current cash on the account is 3.012 billion yuan, which strongly supports the company's continued mergers and acquisitions. This announcement, three new M & A universities have acquired Shinawatra University overseas, and Nanjing Jinken Vocational and Technical College has been acquired by 25 million. Another undergraduate university has completed the merger and acquisition agreement (to be obtained a school license), and the new M & A has little impact on profits in the short term. The improvement of management output leads to the later growth of profits.
Financial Forecast and Investment suggestion
The company's endogenous growth is strong and the pace of mergers and acquisitions is steady. We estimate that the revenue for the year 21-23 will be 23.2 pounds / 3.32 billion yuan (the original forecast is 2.32 pounds 2.83 billion dollars), and the adjusted net profit will be 8.36 pounds 1.265 billion yuan (the original forecast is 10.81 billion dollars). The average adjusted value of comparable company 21e is 24.1x, corresponding to the market capitalization of 24.2 billion Hong Kong dollars. The target price is HK $3.03. Maintain a "buy" rating.
Risk hint
The enrollment process is not as expected, and the integration effect of new mergers and acquisitions is not as expected.