Recently, the Hong Kong stock market has launched a number of blockbuster benefits in order to solve the problem of liquidity shortage, and the attention of funds has increased significantly.
At present, the valuation of the Hong Kong stock market is at a historically low level, and the expectation of improved liquidity is expected to usher in a medium and long-term allocation window.
In this context, the Hong Kong-listed higher education group "China Chunlai" once again delivered outstanding results, with revenue of 814 million yuan in the interim year of fiscal 2024, a year-on-year increase of 8.7%, and due to further savings in sales expenses and financing costs, the company's adjusted net profit reached 386 million yuan, a growth rate of 16.3%, and the increase in revenue increased profits. At the same time, following the dividends in 2022 and 2023, the company will continue to launch a dividend of 0.0907 yuan (about HK$0.1) per share, with a total dividend of 108.84 million yuan.
In the long run, the company has continued to deliver top performance in recent years, and has paid dividends for three consecutive years, showing its ability to navigate the market cycle and its resilience to resist market risks in an environment full of uncertainty.
High-quality growth continues to be delivered, and dividends have been paid to investors for three consecutive years
In recent years, vocational higher education has received national policy support one after another. Including encouraging higher education institutions to strengthen the integration of industry and education, and cultivating application-oriented talents.
With the continuous release of policy dividends, China's high-quality growth strategy is also continuing to be fulfilled.
In the past fiscal year 2019 to fiscal year 2023, China Chunlai's overall performance has been strong: revenue has grown steadily at a compound annual growth rate of 28%, and the compound annual growth rate of profit has reached 43%.
Source: According to the company's financial report
In the first half of fiscal year 2024, China Chunlai continued to maintain a growth trend of increasing revenue and profits: operating income was 814 million yuan, a year-on-year increase of 8.7%, and on the cost side, due to the reduction of enrollment publicity and advertising expenses and the reduction of bank borrowing expenses, the company's sales expenses and financing costs were reduced by 34.3% and 23% respectively compared with the same period last year, and finally achieved a net profit of 386 million yuan, a year-on-year increase of 16.3%.
The continued excellent fundamental performance not only demonstrates the strong momentum of China Chunlai's expansion in the education market in recent years, but also reflects the company's refined management level and operational excellence.
This high-quality development strategy is clearly reflected in the company's organic growth and extended mergers and acquisitions.
In recent years, the company has achieved organic growth by establishing new campuses and expanding the scale of existing campuses, such as the establishment of Hubei Health College, the expansion of the Yuanyang campus of Anyang University, etc., as well as the gradual integration of high-quality campuses into the operation of Jingzhou University and Tianping College.
Up to now, China Chunlai operates four colleges in Henan Province (i.e., Shangqiu University, School of Applied Science and Technology, Anyang University and Yuanyang Campus of Anyang University), two colleges in Hubei Province (i.e., Health College and Jingzhou College), and also participates in the operation of Tianping College in Jiangsu.
During the reporting period, the company's mature campuses, Shangqiu College, Anyang College and Shangqiu College of Applied Science and Technology, achieved a total revenue of 531 million, a decrease of 1.5% over the previous year, mainly due to the reduction of enrollment scale.
The company's new and expanded campuses, "Health College" and "Anyang University Yuanyang Campus", have grown rapidly.
Among them, the School of Health achieved a revenue of 48 million, a year-on-year increase of 84.0%, mainly due to the expansion of the number of students from 3,714 in the 2022/2023 academic year to 6,831, and the Yuanyang Campus of Anyang University achieved an income of 89 million, a year-on-year increase of 34.1%, mainly due to the expansion of the student scale and the increase in average tuition fees.
In addition, Jingzhou College, which the company acquired through mergers and acquisitions, continued to maintain high-quality growth.
As early as the 2018/2019 academic year, the company participated in the operation of Jingzhou College (formerly known as the School of Engineering and Technology of Yangtze University) and Tianping College. It was not until May 2021 (2021 annual report period) that the company completed the acquisition of Jingzhou University.
After the completion of the merger and acquisition, Jingzhou College will bring revenue contributions of 37 million, 193 million and 234 million respectively from fiscal year 2021 to fiscal year 2023, achieving significant growth.
Behind the increase in income is the increase in the number of students and the per capita tuition fee: the number of students enrolled in Jingzhou College in each fiscal year is 10,759, 12,234 and 13,718 respectively, and the per capita tuition fee has increased from 15,800 in the 2021/2022 academic year to 17,100 per capita in the 2022/2023 academic year, a significant increase of 8%.
During the reporting period, Jingzhou University expanded its enrollment from 13,718 in the previous academic year to 16,752, achieving a revenue of 146 million, a year-on-year increase of 24.4%.
Source: According to the company's financial report
It is worth mentioning that among the six major colleges under the company, Jingzhou College ranks first in per capita tuition, and the increase in the number of students and per capita tuition in recent fiscal years not only indicates greater growth potential in the future, but also fully reflects the strategic vision and excellent M&A integration ability of China Chunlai to screen high-quality targets.
The company's continued excellent performance has also received positive feedback in the capital market.
Five years later, the company's current stock price is still 132% higher than the initial price, and from 2022 to 2023, when the stock price performance of education peers is sluggish, China Chunlai has stepped out of the independent market, with 86% and 80% of the annual stock price increase significantly outperforming its peers.
来源：WIND
In order to express its feedback to investors, during the reporting period, the company launched a total of 108.84 million yuan in cash dividends, which is the third consecutive year of dividends since 2022, continuing to give back real money to investors, further improving the experience of investors' rights and interests, and strengthening the company's long-term allocation value.
The overseas layout has injected new momentum, and the integration of AI education + industry and education has enabled high-quality development
It is not easy for China Chunlai to continue to achieve excellent results, and it is even more challenging to maintain this excellent performance.
Looking ahead, the company's growth momentum remains sufficient.
Once it is incorporated into the group system in the future, in addition to directly increasing the company's profits at one time, it will continue to contribute to the company's growth momentum in the next few fiscal years.
In addition, in addition to continuously improving its campus network in the mainland, China Chunlai is also exploring overseas educational opportunities.
Recently, China Chunlai said that it is planning to build a new university in Hong Kong, and also plans to carry out further education services, career planning and other related businesses to meet students' needs for high-quality international education.
The new school is expected to be completed and start recruiting students within five years, and the total number of students in the group is expected to increase from the current 104,100 to 150,000, injecting new growth momentum into the group's development.
In addition, at the moment of education informatization and intelligence, China Chunlai is also continuously strengthening its strategic layout in the field of AI and deepening the integration of industry and education to empower the high-quality development of the company's education.
In 2024, the company will not only carry out strategic cooperation with Beijing Gravitational Internet Technology Co., Ltd. in the field of AI, but also unveil the establishment of AI colleges in its two core colleges, Shangqiu University and Anyang University. It demonstrates the Group's strategic determination in educational innovation and cultivating applied talents.
In addition, the company's progress in deepening the integration of industry and education is also worth noting. Since the establishment of cooperative relations with 200 companies at the beginning of listing, the company has expanded to establish close school-enterprise cooperation with more than 900 enterprises, covering internship training, transformation of R&D achievements, order-based talent training, professional and laboratory co-construction and other levels.
As of December 31, 2023, the average employment rate of graduates of the company's higher education courses is about 93.52%, reflecting the remarkable effectiveness of the Group's career guidance courses in promoting students' employment.
epilogue
Finally, focusing on the valuation level, many brokerages agreed that the current education policy has basically bottomed out, and vocational education and higher education are relatively clear investment directions.
With the official inclusion of China Chunlai in the Hong Kong Stock Connect of the Shanghai and Shenzhen stock exchanges in March this year, and the expectation of improved liquidity of Hong Kong stocks in the near future, the valuation level of China Chunlai is expected to increase significantly.
At present, the valuation of China Chunlai is significantly lower than that of mainland education stocks, and it is extremely cost-effective.
来源：WIND
Looking forward to the future, with the continuous expansion and upgrading of China's Chunlai mainland colleges and the further expansion of overseas education territory, the future growth momentum is still expected, and the company's in-depth exploration in AI education and the integration of industry and education will continue to escort the company's high-quality development.
As a leading private higher education provider in central China, China Chunlai continues to perform well in fundamentals, has new growth momentum expectations, and has a more cost-effective valuation than the mainland, making it a more reliable investment choice for investors looking for value investment.