This week's view
This week, Shengtong Education released a performance forecast. In 2021, the company realized a net profit of 60-90 million yuan, a year-on-year turnaround (a loss of 346 million yuan in 2020), a decrease of 36% - 57% compared with 2019; Among them, the net profit of the main printing sector is 110-130 million yuan, and the loss of the education sector is 40-50 million yuan. The education sector is lower than expected, which is mainly affected by the impact of epidemic disturbance + centralized delivery after double reduction of discipline training + increased R & D. 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: underperformed the Shanghai Composite Index by 3.77%
This week, CITIC education index fell 3.73%, Shanghai index rose 0.04%, underperforming the market by 3.77%. So far in 2022, CITIC education index has fallen by 9.12%, Shanghai index has fallen by 3.22%, and underperformed the market by 5.90%.
Industry news
Recently, the Ministry of education and other eight departments revised the regulations on the management of student internship in vocational schools issued and implemented in 2016 to further clarify the code of conduct for student internship and draw a "red line" for internship management. In view of the problems such as mismatched specialty, compulsory practice and paid practice, this paper puts forward one "no" and 27 "no", and defines the handling regulations. The revised provisions include 8 chapters and 50 articles, including general provisions, internship organization, internship management, internship assessment, safety responsibilities, safeguard measures, supervision and handling, and supplementary provisions. Compared with the original provisions, the revised provisions further clarify the responsibilities, rights and obligations of all parties involved in internship, and standardize the basic requirements of each link process of internship.
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.
