This week's view
Shanghai Action Education Technology Co.Ltd(605098) released the annual report this week. In 2021, the company achieved a revenue / net profit attributable to the parent company of 555 / 171 million yuan, a year-on-year increase of 47% / 60% and a year-on-year increase of 27% / 45%. The performance was slightly better than expected. At the end of the year, the company's contractual liabilities increased by 21% year-on-year to 776 million yuan. Under the guarantee of higher contract liabilities, the company grew well from January to February, but class cancellation was repeatedly affected by the epidemic in March, which was under pressure in the first quarter.
On March 16, Liu he chaired a special meeting of the financial stability and Development Commission of the State Council. The meeting pointed out that the Chinese government continues to support all kinds of enterprises to list abroad. The meeting stressed that relevant departments should earnestly assume their responsibilities, actively introduce policies conducive to the market and prudently introduce contractionary policies. We should respond to the hot issues concerned by the market in a timely manner. All policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations. The financial commission of the State Council will strengthen coordination and communication according to the requirements of the Party Central Committee and the State Council, and hold accountable when necessary. Stimulated by favorable policies, the share price of zhonggai shares rebounded sharply on March 16. We believe that Hong Kong stock education also benefits from the policy recovery.
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: underperforming Shanghai Composite Index 5.56pct
This week, CITIC education index fell 3.80% and Shanghai index fell 1.77%, underperforming the market by 2.03pct. So far in 2022, the CITIC education index has fallen by 12.83% and the Shanghai index has fallen by 10.68%, underperforming the market by 2.15pct.
Industry news
New Oriental Hefei School held a project cooperation signing ceremony with Hefei Vocational College of Finance and Economics under Zhuoya education group. Tal has successively established a number of subsidiaries, covering software development, technical services, intelligent hardware and other fields.
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.
