China Education (002607) Annual Report Commentary: Teachers’ Sequences Grow Beautifully and Scale Effect Highlights
Event: The company released its annual report and achieved revenue 62 in 2018.
3.7 billion, an increase of 54.
72%, net profit attributable to mother 11.
5.3 billion, an increase of 119.
67%, after deducting non-return to mother 11.
1.3 billion, an increase of 124.
Basic income is 0.
22 yuan / share.
It is planned to pay dividends for every 10 shares2.
3 yuan (including 南宁桑拿 tax), total cash dividends 14.
Opinion: The number of trainees and the unit price of customers both increased, and the face-to-face training revenue increased rapidly.
Face-to-face training achieved revenue 57.
7 billion, an increase of 53.
98%, mainly benefited from the double increase of training and passenger unit price, shrinking, and 119 face-to-face training.
210,000, an increase of 35.
10% is included. The increase in the proportion of long-term courses drives the overall unit price of face-to-face training to increase by 13.
98%, reaching 4,840 yuan per person, an increase of about 593 yuan over the previous year.
The sequence of teachers and civil servants has grown rapidly.
According to the preliminary training sequence, civil servant recruitment training income increased by 49.
15% of income from 51 in 17 years.
3% recovered 49.
4%; teacher recruitment and teacher qualification training income increased by 60.
58% of the income share from 17-16.
6% increased to 17.
Comprehensive face-to-face training income increased by 87.
17%, the proportion of income from 10 in 17 years.
98 increased to 13.
28%, mainly including face-to-face training and other face-to-face training services, confirming the company’s ability to expand the track
Online training has maintained high growth.
18 years of online training 111.
580,000, an increase of 91.
19%, online training achieved revenue4.
4.4 billion, an increase of 57.
64%, revenue accounted for about 7%, the customer unit price was about 397 yuan, a decrease of 17.
6%. Expansion of outlets accelerated.
The company has established 701 learning center outlets covering 319 prefecture-level cities, a net increase of 150 from 551 in the early 17 years, and then gradually increased to the county level.
During the period, the expense ratio was significantly reduced, and the scale effect was significant.
The gross profit margin is 59.
5pct), the selling expense ratio is 17.
17 points), the management expense ratio is 14.
5 points), R & D expense ratio 7.
4pct), financial expense ratio -0.
The cost rate during the period was 39.
Investment suggestion: The growth rate of civil servants and teachers in the past 18 years has been beautiful. The volume and price of offline training have risen, and the number of online “horse races” training has maintained a high growth. At the same time, the cost rate has dropped significantly and the scale effect has been significant.
The policy encourages vocational education. As a leader in vocational education and training, the company has a strong ability to expand the track and is expected to fully benefit from the policy dividend.
Estimated 19/20/21 net profit16.
1.3 billion with a budget benefit of zero.
52 yuan / share.
The current market value is expected to be 788 trillion, estimated at 48x / 33x / 25x, maintaining the “overweight” level.
Risk reminder: Civil servants’ contraction of civil servants brings the number of civil servant training less than expected; the new track expansion fails to meet expectations.