This week’s view
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 in 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: underperformed the Shanghai Composite Index by 2.56%
This week, CITIC education index fell 4.19%, Shanghai index fell 1.63%, underperforming the market by 2.56%. So far in 2022, CITIC education index has fallen by 5.60%, Shanghai index has fallen by 3.06%, and underperformed the market by 2.54%.
Industry news
Recently, Jiangsu Jinzhi Education Information Co., Ltd. (hereinafter referred to as “Jinzhi education”) terminated the issuance registration procedure according to the information disclosure of the stock issuance audit of the science and Innovation Board of Shanghai Stock Exchange.
According to the documents of China Securities Regulatory Commission, Jinzhi education and the sponsor Orient Securities Company Limited(600958) underwriting sponsor Co., Ltd. submitted the application for withdrawing the application documents for Jinzhi education’s initial public offering and listing on the science and innovation board, and took the initiative to withdraw the registration application documents. Therefore, the Management Committee of the CSRC terminated the registration procedure of Jinzhi education issuance in accordance with the procedures. According to the official website of Jinzhi education, Jinzhi education, founded in 2008, is an information service provider of higher education in China. It has provided software development, operation and maintenance and services, system integration and other information services for more than 1000 colleges and universities and secondary vocational schools.
According to the prospectus previously submitted by Jinzhi education, the revenue of Jinzhi education was 482 million yuan in 2019 and 476 million yuan in 2020, a year-on-year decrease of 1.33%; In 2020, the net profit attributable to the parent company after non deduction was 65.0718 million yuan, a year-on-year decrease of 6.43%.
Risk tips
Uncertainty of epidemic impact: the progress of epidemic recovery 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.
