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希望教育(01765.HK)公司点评:8亿元收购内蒙古大学创业学院 板块并购持续落地

Hope Education (01765.HK) Company Comment: 800 million yuan to acquire Inner Mongolia University's School of Entrepreneurship sector, and mergers and acquisitions continue to land

天風證券 ·  Jul 21, 2021 00:00

800 million acquisition of 100% rights and interests of entrepreneurs in the College of Entrepreneurship, Inner Mongolia University

On July 20, the company announced that Sichuan Department Rui, Puchen Agriculture and Animal Husbandry and Prechen signed an investment agreement on July 20, agreeing that Sichuan Department Rui would invest a total of 800 million yuan, (I) transform the target school into a private undergraduate university independently run by Prechen, and (ii) acquire 49% of Purechen's equity stake in Purechen's agricultural and animal husbandry company. In order to achieve the goal of Inner Mongolia Prechen Education Technology Co., Ltd., which is wholly owned by Hope Education. The relevant investment funds will be used for the construction of the new campus of the target school (including land expropriation, construction of the campus and investment of facilities and equipment, etc.), repayment of the debts of the target school, consideration for the transfer of the rights and interests of Pritchen and the target school, transfer of related fees and funds for the future development of the target school.

The Entrepreneurship College of Inner Mongolia University is expected to be completed within this year. At present, the College of Entrepreneurship of Inner Mongolia University has 8554 students. It is a college sponsored by Inner Mongolia University and Prachen Company.

Began to enroll undergraduate students in 2008, located in Hohhot, Inner Mongolia, China. It is a higher education institution characterized by modern media, cultural creativity, focusing on business, and the coordinated development of liberal arts, science, engineering, economics, management and art. At present, Inner Mongolia Entrepreneurship College has 8 departments, 28 majors and about 8554 students. By the end of August 20, the college had a total of 238 full-time teachers and employed 493 part-time teachers outside the school, with a tuition fee of about 15000. The first employment rate of graduates in the past three years has been maintained at about 95 per cent.

The college covers an area of 370,000 square meters and is located in the core area of Hohhot, Inner Mongolia, adjacent to Nanhu Wetland Park and the south campus of Inner Mongolia University. At the same time, the school is one of the only two private colleges and universities in Inner Mongolia, with a very scarce brand value.

The number of college entrance examination students in Inner Mongolia in 2021 is about 150000, and the gross enrollment rate of higher education is about 40%. There is more room for growth in the future.

In financial terms, the net profit in 2020 was 44.76 million yuan, an increase of 36% over the same period last year. As of June 30, 2021, the school had total assets of 460 million yuan and net assets of 250 million yuan.

The acquisition is the company's first layout in this new region of Inner Mongolia, further expanding the company's school network and increasing market penetration. At the same time, through the linkage of enrollment, teaching and other aspects, as well as coordination with other institutions of the group, we will improve the level of running schools, enrich professional settings, transport more high-quality higher education resources for the local, and serve the construction of the industry.

Maintain earnings forecasts and give buy ratings

As of now, FY21H1 operates 16 schools in China, including 6 undergraduates, 8 junior colleges, and 2 technician colleges. In addition, the group has signed four school acquisition agreements, namely, Gongqing College of Nanchang University, Jinken Vocational and Technical College, Shinawatra University of Thailand and Entrepreneurship College of Inner Mongolia University. The number of students enrolled in the 21st academic year is 196700, an increase of 40.4% over the same period last year, and a national enrollment network system has been established. We expect the company's FY21-22 revenue to be 2.45 billion and 2.99 billion respectively, adjusted net profit to be 980 million and 1.08 billion yuan, EPS to be 0.12yuan and 0.14yuan respectively, and PE to be 11x and 10x respectively.

Risk tips: enrollment is not as expected, integration is not as expected, price increases are not as expected, etc.

The translation is provided by third-party software.


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