\u3000\u3 Bohai Water Industry Co.Ltd(000605) 098 Shanghai Action Education Technology Co.Ltd(605098) )
Event overview
In 2022q1, the company’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were 98 / 08 / 05 million yuan respectively, with a year-on-year increase of 31% / 84% / 33%, in line with expectations.
Analysis and judgment:
22q1 income growth was mainly affected by the epidemic in Shanghai. We analyzed that the epidemic affected the progress of class elimination of the company. In particular, EMBA, the headmaster with high gross profit, cancelled 12 classes in March, accounting for only 28%.
Sufficient orders, forward-looking indicators, contract liabilities increased by 12% year-on-year. We analyzed and tracked the company’s main points: (1) contract liabilities: the contract liabilities in 2022q1 were 765 million yuan, an increase of 11.68% year-on-year, providing a certain guarantee for 22 years; (2) Sales expenses: in 2022q1, it reached 38 million yuan, with a year-on-year increase of 34%, mainly due to the increase in the number of salespeople and average salary.
The net interest rate increased by 95PCT, mainly due to the enhancement of the company’s profitability and the growth of investment income generated by the purchase of financial products with its own funds. The gross profit margin in 2022q1 was 76.79%, an increase of 8.74pct year-on-year. The net profit attributable to the parent company in 2022q1 was 7.97 million yuan, an increase of 84.17% year-on-year, mainly due to the decline of management expense ratio. In 2021, the rates of sales / management / R & D / financial expenses were 39% / 26% / 8% / – 4% respectively, with a year-on-year increase of 2.6 / – 8.7/1.1/20.9pct. The increase of R & D expenses was mainly due to the continuous increase of R & D investment, R & D personnel salary and curriculum R & D production expenses. The return on investment / income was 3.8%, with a year-on-year decrease of 14pct, mainly because the return on curriculum R & D investment needs a certain period.
Investment advice
We expect that after the end of the epidemic, the company is expected to ensure the annual goal by increasing class scheduling. In the long run, the company has established a sound curriculum system, teacher system and channel system, with strong brand strength and high re purchase + re introduction rate. The future growth space lies in: (1) developing channels to obtain new customers in Shenzhen New Land Tool Planning &Architectural Design Co.Ltd(300778) and opening intelligent management training bases in Shanghai, Beijing, Shenzhen, Changsha and Kunming in the future, introducing modern education and training equipment and strengthening scientific and technological allocation; (2) Taking the SaaS platform of Omo digital business school as a breakthrough online, the diversified layout of training + consulting + SaaS platform lengthens the customer service cycle and breeds new growth points. Maintain the revenue of 717 / 901 / 1107 million yuan, net profit attributable to parent company 223 / 290 / 370 million yuan and EPS 2.5 million yuan from 2022 to 2024 respectively 64 / 3.44/4.39 yuan, closing price of 40.1 yuan on April 27, 2022, corresponding to PE of 15 / 12 / 10 times respectively, maintaining the “buy” rating.
Risk tips
Uncertainty of epidemic situation; Personnel turnover risk; Curriculum iteration risk; Systemic risk.
