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新高教集团(2001.HK):加大投入提高办学质量 坚定选择高质量内涵发展

New Higher Education Group (2001.HK): Increase investment to improve the quality of running schools and firmly choose high-quality content development

第一上海 ·  Apr 27, 2022 00:00  · Researches

Overview of FY2022H1 performance: In the six months ending February 28, 2022, the company achieved total revenue of 1,210 million yuan (+30.7% year-on-year); main business revenue of 1,036 billion yuan (+31.7% year-on-year); gross profit margin of 40.20% (-516 bps). The main reason for the decline was that the company increased its investment in running schools; adjusted net profit of 345 million yuan (17.2% year-on-year), and the net profit margin of Gumo was 33.3% (-412 bps). An interim dividend of $0.106 per share is proposed.

The number of students enrolled has been growing steadily, and the growth in the vocational training business has been highlighted: According to the company's 2021 annual report, the total number of students enrolled in the company's eight schools was 143,800, an increase of 14.4% over the previous year. In terms of revenue structure, the company's tuition revenue was 943 million yuan/+32% year on year; accommodation revenue was 92 million yuan/+28.9% year on year, mainly due to steady endogenous growth and the merger of Lanzhou schools in April '21 and Zhengzhou schools in September '21. In terms of other business revenue, commercial logistics revenue was 62 million yuan/+33.9% year on year; training service revenue was 48 million yuan/+35% year on year. The growth rate of the training service revenue is slightly higher than the growth rate of the group's total revenue, and the revenue from the training service is expected to become a new growth point for the company's business.

Strengthen the quality of the teaching staff and improve campus infrastructure: the company introduces high-level talents, improves the treatment of the teaching team, improves teaching equipment and living infrastructure, and lays a solid foundation for strengthening connotative development. The company's overall salary for core positions increased 8% year on year, and the salary for key core positions increased 31.5% year on year; 511 high-end talents were introduced. Among them, the number of teachers with master's degree and above increased 21% year on year, and the number of teachers with intermediate titles and teachers increased 14% year on year. In addition, the company invested 256 million dollars to build experimental training rooms, self-study spaces, smart classrooms, and improve the campus landscape and living environment.

In close cooperation with various parties, competition and employment blossomed: the company focused on six major Chaoyang industries, cooperated deeply with 1,754 well-known enterprises, built 34 industrial colleges, set up 163 employment classes for famous enterprises, and cooperated closely with the Harvard University School of Education and XJTLU to build superior majors. The company's huge investment in teaching has paid off. At the end of 2021, students from the company's schools won a total of 180 national awards in top comprehensive subject competitions. The employment rate of graduates reached 98%, 7 percentage points higher than the national average.

The target price is HK$4.25, maintaining the purchase rating: the company has increased investment in running schools and insisted on employment-oriented quality schools. In the context of frequent favorable vocational education policies, the company has broad prospects for future development. The company's target price was adjusted to HK$4.25. The PE forecast corresponding to 2022/2023 was 8.0x and 6.9x respectively, up 74.9% from the recent closing price.

The translation is provided by third-party software.


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