Event: when the company released its interim results for fiscal year 2021, FY21H1 achieved revenue of 2.001 billion yuan, an increase of 31.9% over the same period last year and 9.9% over FY19H1, and an adjusted net profit of 301 million yuan, an increase of 41.8% over the same period last year and a decrease of 26% compared with FY19H1.
Main points of investment
In the first half of the year, the core sector maintained the trend of expansion, and income gradually rebounded.
FYH121's revenue reached 2.001 billion yuan, up 31.9% from the same period last year (9.9% over the same period in 19 years). The increase in income was mainly due to a 34.7% year-on-year increase in the number of new students in the first half of the year to 81900. In terms of business segment, New Oriental Education & Technology Group Cooking / Xinhua computer / Wantong Auto repair / Omickey / Huaxin Zhiyuan / delicious College respectively achieved an income of 10.28pm 3.82max 2.80pm 2.022max 0.43 million, with year-on-year changes + 23.38% shock "18.09%" 43.17% "81.86%" 13.05% "13.05%" 94.40% respectively. The number of schools in the company reached 218 in the first half of the year, including New Oriental Education & Technology Group Cooking / Xinhua computer / Wantong Auto repair / Omickey / Huaxin Zhiyuan / delicious College than at the end of the 20th year, the number of schools was 0, the core segment maintained the trend of expansion, and the income rebounded significantly.
The epidemic repeatedly disrupted the normal pace of enrollment, and the short-term profit level was under pressure.
FY21H1's comprehensive gross profit margin decreased by 2.2pct to 55.3%, mainly due to: 1) the substantial increase in staff salaries and benefits and the cost of teaching-related consumables, while the cost savings related to the closure of schools in the same period last year; 2) schools were closed in some areas with sporadic outbreaks in the first half of the year, and the rhythm of spring recruitment disrupted and reduced income. In the first half of the year, the company's sales expense rate decreased to 23.2%; the management expense rate decreased to 12.6%, mainly due to a decline in equity incentive payment expenses. The adjusted net profit in the first half of the year was 301 million yuan, an increase of 41.8% over the same period last year, including exchange gains and losses and employee equity fees, and the adjusted net interest rate increased by 1pct to 15% compared with the same period last year.
The continuous growth in the proportion of long-term schooling is conducive to the gradual improvement of operational stability.
Among the new training students in FY21H1, the number of people taking three-year courses reached 18000 (+ 80.5%YOY), accounting for 23% of the new training (compared with 17% in the same period last year). The average number of trainees in three-year long-term courses is 64600 (+ 46.4%YOY), accounting for 45% of the total average trainees (35% in the same period last year). Among them, New Oriental Education & Technology Group cooking / Xinhua computer / Wantong auto repair is 21400 / 25800 / 17300 respectively, an increase of 45.7% / 28.6% / 83.7% respectively over the same period last year, and the academic structure continues to be optimized. We believe that the increase in the share of the three-year system since 2018 is conducive to the operational stability of the company on the one hand, and the performance dividend brought by the three-year system on the other hand is expected to appear in 22-23 years.
Profit forecast and valuation:
The company is the leader of vocational training and education, the employment rate of long-term course graduates of its brands is more than 90%, and high-quality exports build a deep moat. The company is under pressure on profitability repeatedly affected by the epidemic in the short term, and is optimistic about the quality of teaching and the export ability of graduates under the background of vocational education encouraged by the state for a long time. It is estimated that the company's EPS for 21-23 will be 0.42 PE 18X/14X/11X per share, corresponding to 21-23 PE 18X/14X/11X, and maintain "buy".
Rating.
Risk hint: COVID-19 epidemic situation is repeated, industry policy has changed significantly, and the development or climbing of the new campus is not as expected.