\u3000\u3000 Shanghai Action Education Technology Co.Ltd(605098) (605098)
Event: the company issued the annual pre increase announcement for 2021. It is estimated that the annual operating revenue is expected to increase by 141.32 million yuan to 171.32 million yuan, a year-on-year increase of 37% to 45%; The net profit attributable to the shareholders of the listed company is expected to increase by 53.28 million yuan to 73.28 million yuan, a year-on-year increase of 50% to 69%.
“One core and two wings” achieved remarkable results, and the company’s performance slightly exceeded expectations. Since its listing, the development strategy of “one core and two wings” of the company has become increasingly clear. While deepening the management training business, the company has actively developed consulting business and equity investment business. In 2021, the company realized the standardization of management consulting business, introduced it to the market and was recognized by customers. The management consulting business is expected to develop. At the same time, the company has established a private equity fund to focus on the pro IPO of the student company. The equity investment business is expected to enhance the performance flexibility of the company. In 2021, the company’s main business was well operated, the scale effect was increasingly significant, and the performance release was slightly higher than expected. In 2021, the company expects the operating revenue to increase by 141.32 million yuan to 171.32 million yuan, a year-on-year increase of 37% to 45%; The net profit attributable to the shareholders of the listed company is expected to increase by 53.28 million yuan to 73.28 million yuan, a year-on-year increase of 50% to 69%, and the performance growth rate is expected to exceed our previous expectations.
The market development has achieved remarkable results, and the future development is worth looking forward to. The company continues to strengthen market development. Through Wuxi Online Offline Communication Information Technology Co.Ltd(300959) two wheel drive, the company’s enrollment is generally good. By the end of September 2021, the company’s contract liabilities were 712 million yuan, an increase of 71 million yuan over the end of 2020. It is expected that the company’s contract liabilities will still increase by the end of 2021, which is expected to reach about 800 million yuan, laying a solid foundation for performance growth in 2022. At the same time, the management training business provided by the company emphasizes effective management, and the courses are targeted. They directly hit the key points, difficulties and pain points of enterprise management, and are deeply welcomed by small and medium-sized business owners. When the economic cycle goes down, the owners of small and medium-sized enterprises will have more time to think about the enterprise strategy, development ideas and growth path, make it easier to arrange and eliminate classes, and have a certain counter cyclical nature. At the same time, the company will actively promote the standardization of management consulting business, benchmark Accenture, an internationally famous consulting company, and realize the digitization, informatization and systematization of consulting business through software. The future growth of consulting business is worth looking forward to.
The tuition fees collected in advance have good cash flow, sufficient funds and low liabilities. The business model of the management training industry generally adopts the business model of pre charging tuition fees + selling courses to confirm income. This business model is conducive to cash flow management. It not only has good operational cash flow, but also can improve profitability. From 2017 to 2020, the company’s cash to cash ratio was 1.41, 1.32, 1.19 and 1.41 respectively, the operating net cash flow was 246 million yuan, 269 million yuan, 183 million yuan and 189 million yuan respectively, the gross profit margin was 72.52%, 73.53%, 75.72% and 78.80% respectively, and the net profit margin was 29.23%, 26.22%, 27.74% and 28.64%. At the same time, the company has good asset quality and sufficient monetary capital. By the end of September 2021, the company’s monetary capital and trading financial assets totaled RMB 15.46, accounting for 84.11% of the total assets. In addition, the company’s debt ratio is low and there is more leverage space in the future. By the end of September 2021, the company’s asset liability ratio was 44.68%, and the asset liability ratio excluding advance receipts was 5.92%.
Profit forecast and investment suggestions: it is estimated that the company’s operating revenue from 2021 to 2023 will be 555 million yuan, 702 million yuan and 865 million yuan, with a year-on-year increase of 46.5%, 26.5% and 23.2% respectively; The net profit attributable to the parent company was 165 million yuan, 222 million yuan and 288 million yuan respectively, with a year-on-year increase of 54.2%, 34.7% and 30.2% respectively; EPS is 1.95 yuan, 2.63 yuan and 3.42 yuan respectively, dynamic PE is 29.7 times, 22.0 times and 16.9 times respectively, and dynamic Pb is 7.9 times, 5.8 times and 4.3 times respectively. The company is the first share of management education in the A-share market and the first share of global business schools. The “one core and two wings” strategy drives the rapid growth of the company, is optimistic about the prospects of the management training industry and the future growth of the company, maintains the “Buy-A” rating, and the target price is 68.25 yuan, corresponding to 35 times the dynamic price in 2021.
Risk tips: repeated epidemics cause risks such as slow course sales, intensified industry competition, lower than expected market development, loss of excellent teachers, etc.
