This week's view
Since January 25, the higher education sector has fallen sharply for three consecutive days. According to the 21st Century Business Review and other websites, mainly due to market rumors, the Ministry of education and provincial education departments held closed door meetings and jointly interviewed the main principals of all school education listed companies listed abroad, requiring listed companies to: 1) for school assets, vie structure will no longer be legal, There can be no more school assets in the statements of listed companies. 2) No more acquisition of school assets in any form; Nor can we expand the scale of running schools in any form. 3) You can't raise tuition fees at will. On January 28, according to the financial Associated Press, a number of higher education companies refuted the rumor, and the share price of higher education sector rose sharply.
At present, we recommend two main lines: (1) Vocational Education: Shanghai Action Education Technology Co.Ltd(605098) , Jiangsu Chuanzhiboke Education Technology Co.Ltd(003032) ; (2) Higher education: at present, some higher education stocks 22pe have fallen below 10 times, mainly due to: 1) higher education companies are cautious about M & A expectations, partly due to the current upside down valuation of the primary and secondary markets; 2) At present, most regions have not yet issued detailed rules for the selection of business and non business, and the market is worried about the policy risk of higher education stocks; 3) Concerns about future price increases and the ceiling of net interest rates. We believe that, on the one hand, the performance of higher education sector continues to be stable. On the other hand, the state accelerates the implementation of vocational undergraduate work, and private undergraduate schools are expected to benefit. We continue to recommend China Education Holdings, hope education, Gaoxin education group, Zhonghui education, China Science and technology training, etc.
Market review: outperforming the Shanghai Composite Index by 2.68%
This week, CITIC education index fell 1.89%, Shanghai index fell 4.57%, outperforming the market by 2.68%. So far in 2022, CITIC education index has fallen by 10.84%, Shanghai index has fallen by 7.65%, and underperformed the market by 3.19%.
Industry news
On January 28, Offcn Education Technology Co.Ltd(002607) released the performance forecast for 2021. The announcement shows that in 2021, the company is expected to realize an operating revenue of 6.9 billion yuan to 7.3 billion yuan in 2021, a year-on-year decrease of 38.41% - 34.84%; The net profit attributable to the shareholders of the listed company was a loss of 2-2.4 billion yuan, a year-on-year decrease of 186.79% - 204.15%. According to the announcement, the main influencing factors of the company's loss in 2021 are that the business collection is less than expected, the rapid growth of student refund, the sharp decline of business income and the high growth of total operating cost. Among them, the sharp decrease in revenue is the direct cause of the company's loss. In terms of collection, the company expects that the collection of training business in 2021 will be 19-21 billion yuan, down 20.66% - 12.31% from 23.947 billion yuan in 2020.
Risk tips
Uncertainty of the impact of the epidemic: the recovery progress of the epidemic has an impact on offline education. Risk of policy change in the education industry: the policy change in the education industry affects the enrollment and fees of K12, vocational education and higher education companies. The risk of enrollment not reaching the expected number: the weakening of terminal demand or the weakening of the enterprise's own advantages make enrollment difficult.
