Educational Operations - As of December 31, 2024, the company operated 233 schools and centers with an average enrollment of 146,294 students[22] - The culinary arts segment had 92 schools with 58,133 students enrolled, while the information technology segment had 56 schools with 38,827 students[13] - The auto services segment operated 41 schools with 39,965 students enrolled, and the fashion and beauty segment had 8 schools with 4,333 students[13] - The company established Anhui Xinhua Education to consolidate all schools under a single entity, enhancing operational efficiency[15] - The company expanded its business to Hong Kong, increasing its operational footprint[18] - The number of schools in operation reached 126, with the establishment of Cuisine Academy to provide customized catering experiences[18] - The company is focused on vocational training in four key sectors: culinary arts, information technology, auto services, and fashion and beauty[6] - The average number of students enrolled in the western cuisine and pastry segment was 5,036 across 36 schools[13] - The average number of students enrolled nationwide in 2024 was 146,294, with a total of 233 institutions operating across the country[48] - The company operates 233 schools and centers across most provinces in mainland China and Hong Kong as of December 31, 2024[60] Financial Performance - Revenue for the year ended December 31, 2024, is projected to be RMB 4,116 million, up from RMB 3,979 million in 2023, indicating a year-over-year increase of about 3.4%[34] - Gross profit for 2024 is expected to be RMB 2,115 million, compared to RMB 1,908 million in 2023, reflecting a growth of approximately 10.9%[34] - Net profit for the year is anticipated to reach RMB 513 million, significantly higher than RMB 273 million in 2023, marking an increase of about 88.0%[34] - Adjusted net profit for 2024 is projected at RMB 525 million, up from RMB 281 million in 2023, which is an increase of approximately 86.8%[34] - Adjusted EBITDA for 2024 is expected to be RMB 1,376 million, compared to RMB 1,136 million in 2023, representing a growth of about 21.2%[34] - The total assets as of December 31, 2024, are projected to be RMB 9,484 million, an increase from RMB 9,291 million in 2023, indicating a growth of approximately 2.1%[34] - The net assets as of December 31, 2024, are expected to be RMB 5,749 million, compared to RMB 5,608 million in 2023, reflecting an increase of about 2.5%[34] - For the year ended 31 December 2024, the Group's revenue from the main business was RMB 4,116 million, representing a year-on-year increase of 3.5% compared to 2023[48] - The net profit for the year was RMB 513 million, representing a year-on-year increase of 88.0% compared to 2023; the adjusted net profit was RMB 525 million, representing an increase of 86.6%[48] Enrollment Trends - The number of new students enrolled was 143,441, representing a year-on-year decrease of 6.2% compared to 2023[48] - Total new student enrollments for Culinary Arts decreased by 7.7% from 68,473 in 2023 to 63,228 in 2024[65] - Long-term enrollments for New East and Cuisine Academy saw a significant increase of 124.5% for the one to less than two years category, rising from 2,234 in 2023 to 5,015 in 2024[65] - The number of short-term enrollments in Culinary Arts decreased by 8.4%, from 39,873 in 2023 to 36,542 in 2024[65] - The number of new students enrolled in Omick's long-term programs decreased by 4.6% from 1,314 in 2023 to 1,254 in 2024[65] - New students enrollment in the Information Technology and Internet Technology segment decreased by 13.4% from 29,742 in 2023 to 25,766 in 2024[66] - The Fashion and Beauty segment saw a significant increase in new students enrollment, rising by 79.6% from 3,406 in 2023 to 6,118 in 2024[67] - The total new students enrollment for the Group decreased by 6.2% from 152,881 in 2023 to 143,441 in 2024[67] - In the Culinary Arts segment, new students enrollment decreased by 2.1% from 59,388 in 2023 to 58,133 in 2024[70] - The Auto Services segment reported a slight increase in new students enrollment, rising by 2.0% from 39,175 in 2023 to 39,965 in 2024[73] Strategic Initiatives - The company aims to support China's evolving workforce requirements driven by economic growth and industrial upgrades[6] - The Group has invested in vocational education industrial parks in five regions, with the capacity to accommodate over 120,000 teachers and students upon completion[49] - The Group plans to accelerate the development of vocational education industrial parks and expand student enrollment by leveraging high-quality resources[51] - The Group aims to enhance its teacher recruitment standards and develop new majors aligned with regional economic needs[52] - The Group reorganized its business segments to streamline operations, integrating various educational brands under specific categories[59] - The Group's strategy in new student enrollment focused on optimizing course structure to attract more high-value new students[85] - The Group plans to establish Vocational Education Industrial Parks to enhance its market position and consolidate its brand[148] - The Vocational Education Industrial Parks will be equipped with advanced teaching and practical training facilities for all seven school/center brands[148] - The Group aims to improve the environment of school premises and increase stability for long-term course students through these parks[148] - The Group intends to diversify its course offerings in culinary arts, information technology, auto services, and fashion and beauty, responding to industry trends and market demand[151][153] Cost Management and Efficiency - Cost of revenue decreased from approximately RMB 2,070 million for the year ended December 31, 2023, to approximately RMB 2,002 million for the year ended December 31, 2024, representing a decrease of 3.3%[89] - The decrease in cost of revenue was attributed to tightened cost control measures during the year ended December 31, 2024[94] - The Group's selling expenses decreased from approximately RMB1,037 million in 2023 to approximately RMB 974 million in 2024, reflecting tighter control on advertising costs[104] - Administrative expenses decreased from approximately RMB 529 million in 2023 to approximately RMB 508 million in 2024, representing 12.3% of revenue compared to 13.3% in 2023[105] - Finance costs for the year ended 31 December 2024 were approximately RMB 118 million, down from RMB 139 million in 2023[106] Employee and Management Structure - As of December 31, 2024, the Group employed a total of 10,346 employees, with 50.5% being full-time teachers and instructors[157][159] - The Group's remuneration policies are based on individual qualifications, experience, performance, and prevailing market rates[161] - The Group's strategic focus on vocational skill education aligns with anticipated market demand growth in sectors like artificial intelligence and healthcare[151][156] - The board of directors includes experienced individuals with over 30 years of experience in education, such as Mr. Wu Wei and Mr. Wu Junbao[166][173] - Mr. Wu Wei, the chairman of the board, is responsible for the overall management and strategic development of the group[166] - The company has a structured employee compensation policy that includes basic salaries and performance-based bonuses[165] - The company utilizes various recruiting channels, including word-of-mouth referrals and online recruiting[165] - The company has a commitment to comply with local labor regulations regarding employee benefits and contributions[163]

Investment Rating - The report assigns a "Buy" rating for China Oriental Education (0667.HK) as part of its initial coverage [2][10]. Core Insights - The company is expected to benefit from product upgrades, optimization of school networks, and recruitment structure, leading to sustained profit growth [2][10]. - In 2024, the company achieved a revenue of 4.12 billion yuan, a year-on-year increase of 3.5%, and a net profit of 510 million yuan, reflecting a significant year-on-year growth of 88% [4][7]. - The report highlights a strong performance relative to the Hang Seng Index, with a 1-month, 3-month, and 12-month performance of 42.4%, 90.0%, and 123.0% respectively [6]. Financial Performance - Revenue and Profit: In 2024, the company reported a revenue of 4.12 billion yuan and a gross profit of 2.12 billion yuan, with a gross margin of 51.4%, up by 3.4 percentage points year-on-year [7][10]. - Dividend: The company plans to distribute a dividend of 0.22 HKD per share in 2024, totaling approximately 479 million HKD, with a payout ratio of 78.2% [7][10]. - Cash Position: As of the end of 2024, the company had cash reserves of 3 billion yuan, representing 31.7% of total assets [7][10]. Business Strategy - The company is focusing on optimizing its product system to adapt to market demand changes and is actively reducing the number of schools to enhance revenue and profit per school [10]. - The average tuition fee has increased by 3.6% due to a higher proportion of 1-2 year courses, despite a 6.2% decline in total enrollment [8][10]. - The company has established vocational education industrial parks in key provinces to improve resource allocation efficiency and reduce rental costs [10]. Forecasts - Revenue projections for 2025-2027 are estimated at 44.2 billion yuan, 47.7 billion yuan, and 51.5 billion yuan respectively, with net profits of 6.3 billion yuan, 7.6 billion yuan, and 9.2 billion yuan [9][10]. - The report anticipates a continuous improvement in profitability, with a projected PE ratio of 15, 13, and 11 for the years 2025, 2026, and 2027 respectively [10][11].

证券研究报告 | 2025年04月03日 中国东方教育（00667.HK） 优于大市 提效控费成效显著，高中生源提供增长新引擎 风险提示：学生就读中职意愿下滑；市场竞争加剧；就业质量不及预期。 投资建议：公司发力面向高中生源的 1-2 年期培训课程，以及内部打通纵向 升学，提高对中职学生吸引力，缓释中职学生人数增长压力。叠加疫情对公 司 3 年制学生人数影响逐步淡化，预计 2025 年总培训人次将重回上升通道。 考虑到收入结构优化及校区调整成效逐步释放，同时公司加强预算管理，预 计盈利能力将持续修复。基于此，我们预计 2025-2027 年公司归母净利润 6.3/7.3/8.5 亿元，同比+22.3%/17.7%/16.3%，对应 CAGR 为 16.7%，对应 PE 为 16/13/12x。维持"优于大市"评级。 | 盈利预测和财务指标 | 2021 | 2024 | 2025E | 2026E | 2027E | | --- | --- | --- | --- | --- | --- | | 营业收入(百万元) | 3,979 | 4,116 | 4,413 | 4,779 | 5,218 | | (+/ ...

Investment Rating - The report maintains a "Buy" rating for the company, with a target price yet to be specified [4]. Core Views - The company achieved a revenue of 4.1 billion RMB in 2024, representing a year-on-year increase of 4%, and a net profit of 500 million RMB, up 87% year-on-year [1]. - The company is optimistic about a profit improvement cycle, driven by strategic investments in vocational education parks in key provinces [4][8]. - The company plans to expand its campus network, particularly in culinary and fashion education sectors, which are expected to have significant growth potential [8]. Financial Performance - The gross profit margin for 2024 was 51.4%, an increase of 3.4 percentage points year-on-year, attributed to revenue growth and improved cost control [3]. - The company reported a total asset value of 9.5 billion RMB, with a net asset value of 5.7 billion RMB, reflecting a year-on-year increase of 2% and 3% respectively [1]. - The company’s total number of schools and centers decreased to 233, a reduction of 12 from the previous year [1]. Business Segmentation - Revenue from New Oriental and Meiwai Academy remained stable at 1.9 billion RMB, while Oumandi saw a significant increase of 125% to 100 million RMB [1]. - The average training participants for 2024 were 140,000, a decrease of 6% year-on-year, with notable declines in several brands [2]. - The company’s strategic focus includes enhancing student demand through the establishment of vocational education parks, which are expected to drive future growth [4][8].

Investment Rating - Industry rating is maintained at "Outperform the Market" [5] Core Insights - The company achieved a revenue of 4.1 billion yuan in 2024, a year-on-year increase of 3.5%, with a gross profit of 2.1 billion yuan, up 10.8%, and an adjusted net profit of 525 million yuan, reflecting a significant year-on-year growth of 86.6%, exceeding expectations [1] - The company is expected to see a continued improvement in profit margins due to effective cost control and an increase in student enrollment, particularly from high school and university graduates [3] Summary by Sections Financial Performance - In 2024, the company reported a total of 14.8 billion yuan in short-term and long-term contract liabilities, an increase of 10.4% year-on-year [1] - The revenue breakdown for 2024 shows that cooking, automotive services, IT, Western cuisine, and beauty industries contributed 47%, 22%, 19%, 8.3%, and 2.6% respectively, with significant growth in the beauty sector at 125% [1] Profitability Metrics - The gross margin for 2024 is projected at 51%, an increase of 3.4 percentage points year-on-year, with an adjusted net margin of 13%, up 5.7 percentage points [2] - The company plans to distribute a dividend of 0.22 HKD per share in 2024, with a payout ratio of 86% [1] Enrollment Trends - The number of new training participants and registered customers in 2024 is expected to be 143,400, a decrease of 6.2% year-on-year, with notable declines in cooking, Western cuisine, and automotive services, while the beauty sector shows an 80% increase [3] - The student demographic is shifting towards high school and university graduates, which is anticipated to open new growth avenues for the company [3]

Investment Rating - The report maintains a "Buy" rating for China Oriental Education [2][8] Core Views - The company reported a revenue of RMB 4.12 billion for 2024, a year-on-year increase of 3.5%, and an adjusted net profit of RMB 525 million, up 86.6% year-on-year, driven by effective cost and expense control [5][6] - The company announced a year-end dividend of HKD 0.22 per share, corresponding to a payout ratio of 85%, with a dividend yield of approximately 5% [5] - The report anticipates continued growth in training numbers through the introduction of short-term courses and expansion in the beauty industry training sector [7][8] Financial Performance - Revenue for 2024 is projected at RMB 4.12 billion, with a year-on-year growth rate of 3.46% [9] - Adjusted net profit for 2024 is expected to be RMB 525 million, reflecting a significant year-on-year increase of 86.59% [9] - The company’s gross profit for 2024 is RMB 2.115 billion, with a gross margin of 51.4%, an increase of 3.4 percentage points year-on-year [6][11] Operational Efficiency - The company has effectively controlled costs, resulting in a net profit margin of 12.5%, an increase of 5.6 percentage points year-on-year [6] - Marketing expenses decreased by 6.1% year-on-year to RMB 970 million, with a sales expense ratio of 23.7%, down 2.4 percentage points [6] - The utilization rate of campuses improved from 72.2% in 2023 to 73.1% in 2024, contributing to economies of scale [6] Market Expansion - The company launched short-term courses targeting high school graduates, resulting in a 66.2% year-on-year increase in training numbers for these programs in the second half of 2024 [7] - The beauty industry training sector saw a 70.9% year-on-year increase in average training numbers, indicating strong demand recovery [7] - Five out of seven regional centers have been completed, enhancing the company's ability to offer higher-level vocational training [8] Profit Forecast - The adjusted net profit forecasts for 2025, 2026, and 2027 are RMB 617 million, RMB 732 million, and RMB 860 million respectively, with corresponding P/E ratios of 13.9, 11.7, and 10.0 [9][11]

Group 1 - The education sector is experiencing a rise in stock prices, with notable increases in companies such as China Oriental Education, which rose by 11.52% to HKD 4.84, and Neusoft Ruixin Group, which increased by 5.23% to HKD 3.22 [1] - China Oriental Education reported its 2024 annual performance, with revenue of CNY 4.116 billion, a year-on-year increase of 3.5%, and a net profit of CNY 513 million, up 88% [1] - Huaxin Securities believes that the education industry is currently in a phase of rigid demand, supply clearance, and reduced policy risks, presenting a good opportunity for leading companies with successful business transformations [1] Group 2 - CITIC Securities notes that since the second half of 2024, concerns about industry demand and competition have increased, leading to stock price fluctuations for many companies [2] - Despite the slowdown in growth for some companies, the majority of the education sector's companies are expected to maintain revenue growth of over 20%, with valuations having dropped to near two-year lows [2] - Recent stimulus policies, including fertility subsidies and consumption enhancement plans, are expected to boost confidence in the education sector [2]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's revenue, net profit attributable to shareholders, and adjusted net profit for 2024 are projected to be CNY 4.116 billion, CNY 0.513 billion, and CNY 0.525 billion respectively, representing year-on-year growth of 3.5%, 88.0%, and 86.6% [2] - The increase in net profit outpaced revenue growth due to improved gross margins and a comprehensive decline in expense ratios [2] - The company plans to distribute a final dividend of HKD 0.22 per share, with a payout ratio of 93.5% and a dividend yield of 5.1% [3] Summary by Sections Business Performance - The core business, New Oriental, saw a positive revenue growth rate in the second half of the year, with only the IT segment under pressure [4] - Revenue by segment for 2024 is projected as follows: Culinary Technology CNY 1.927 billion, Western Pastry CNY 0.343 billion, IT and Internet Technology CNY 0.763 billion, Automotive Services CNY 0.914 billion, Fashion Beauty CNY 0.105 billion, and Other Income CNY 0.224 billion, with respective year-on-year growth rates of 0.7%, 3.6%, -2.4%, 7.9%, 124.9%, and 9.1% [4] - The average training participants for new enrollments are projected at 143,000, with a year-on-year decline of 6.2% [4] Financial Metrics - The gross margin for 2024 is expected to be 51.4%, an increase of 3.4 percentage points year-on-year [7] - The net profit margin for 2024 is projected at 12.5%, reflecting a year-on-year increase of 5.6 percentage points [7] - The company’s total revenue for 2024 is expected to be CNY 4.116 billion, with a year-on-year growth of 3.46% [10] Future Outlook - Short-term performance is expected to exceed market expectations due to cost control measures [8] - Mid-term projections indicate a normalization of enrollments, with growth in long-term students gradually recovering [8] - Long-term advantages include competitive employment rates and the ability to quickly adjust courses to market changes [8] - The earnings per share (EPS) forecast for 2025 is CNY 0.28, with a price-to-earnings (PE) ratio of 14 [8]

Financial Performance - For the year ended December 31, 2024, the company reported a revenue of RMB 4,116 million, representing a 3.5% increase from RMB 3,979 million in 2023[5] - The gross profit for the same period was RMB 2,115 million, which is a 10.8% increase compared to RMB 1,908 million in 2023[5] - The net profit surged by 88.0% to RMB 513 million from RMB 273 million in the previous year[5] - Adjusted net profit increased by 86.6% to RMB 525 million from RMB 281 million in 2023[5] - The company reported a basic earnings per share of RMB 23.53, up from RMB 12.51 in 2023[5] - Adjusted net profit for the year ended December 31, 2024, was RMB 524.94 million, compared to RMB 281.34 million in 2023, while adjusted EBITDA was RMB 1,375.65 million, up from RMB 1,136.39 million[71] - The company's gross profit for the fiscal year ending December 31, 2024, was approximately RMB 2,115 million, with a gross margin of 51.4%, up from 48.0% in the previous year[62] - The cost of revenue decreased by 3.3% from approximately RMB 2,070 million for the fiscal year ending December 31, 2023, to about RMB 2,002 million for the fiscal year ending December 31, 2024[58] Operational Changes - The company has restructured its internal reporting segments, merging several educational divisions to enhance operational efficiency[18] - The company has restructured its business segments, integrating the operations of Meishi Academy into the New Oriental Cooking Education division, which now includes 75 schools[42] - The company adjusted its enrollment strategy and optimized course structure to attract more high-value new students, despite a 6.2% decrease in new training participants and new customer registrations[56] Training Participants and Customer Registrations - The number of new training participants and new customer registrations decreased by 6.2% to 143,441 from 152,881 in 2023[3] - New training participants in the cooking technology segment decreased by 7.7% from 68,473 in 2023 to 63,228 in 2024[48] - Long-term courses in information technology and internet technology saw a 15.0% decline, from 22,060 in 2023 to 18,755 in 2024[49] - The number of new customers registered for the cooking technology segment decreased by 6.7% from 28,600 in 2023 to 26,686 in 2024[48] - The fashion beauty education segment experienced a significant increase of 79.6% in new training participants, rising from 3,406 in 2023 to 6,118 in 2024[50] - The overall average training participants for the group remained relatively stable, with a slight decrease of 0.4%, from 146,839 in 2023 to 146,294 in 2024[52] Financial Assets and Liabilities - The company’s total liabilities, including trade and other payables, amounted to RMB 706,794,000 in 2024, compared to RMB 681,433,000 in 2023, reflecting an increase of approximately 3.7%[35] - The company held other financial assets of approximately RMB 550 million as of December 31, 2024, with a focus on investments that do not impact operational or capital expenditure needs[76] - The company has committed capital expenditures of RMB 152,099,000 for property and equipment acquisitions as of December 31, 2024, down from RMB 485,613,000 in 2023, indicating a reduction of approximately 68.7%[38] Dividends and Shareholder Information - The company proposed a final dividend of HKD 0.22 per share for the year ended December 31, 2024, totaling approximately HKD 479 million[30] - The board has approved a dividend policy to distribute at least 60% of the net profit attributable to shareholders for the fiscal years ending December 31, 2025, 2026, and 2027[94] - The company will suspend share transfer registration from May 22, 2025, to May 27, 2025, to determine shareholders eligible to attend the annual general meeting and vote[101] - The company will also suspend share transfer registration from June 3, 2025, to June 5, 2025, to determine shareholders entitled to the proposed final dividend[102] Employee and Staffing - As of December 31, 2024, the company employed a total of 10,346 staff, with full-time teachers and instructors making up 50.5% of the workforce[91] - The company aims to hire more teachers and staff as it expands its business, utilizing various recruitment channels[92] Compliance and Governance - The company has adopted the Corporate Governance Code and has complied with all its provisions for the fiscal year ending December 31, 2024[95] - The audit committee, composed of three independent non-executive directors, reviewed the company's consolidated financial statements for the fiscal year ending December 31, 2024, ensuring their completeness and accuracy[99] Future Plans and Market Position - The group aims to establish vocational education industrial parks to enhance its market position and brand, with ongoing projects in Sichuan, Shandong, Guizhou, and Henan[86] - The group plans to expand its campus network to cover all provincial capitals in China, focusing on cities with unmet demand in culinary arts, IT, automotive services, and fashion[87] - The group intends to diversify its course offerings in response to industry trends and market demand, with a focus on emerging sectors[88] - The company believes it has sufficient funds to meet its operational capital needs for future business expansion and development[75]

Core Viewpoint - China Oriental Education and Guangzhou Frans have established a strategic partnership to create the "Wantong·Frans Industry College," addressing the talent gap in the new energy vehicle industry, which currently stands at 1.03 million [1][5]. Group 1: Partnership Details - The unveiling ceremony of the "Wantong·Frans Industry College" took place at Anhui Wantong Technical College, marking a significant collaboration between the two companies [1][5]. - Key leaders from both organizations attended the ceremony, highlighting the importance of this partnership in enhancing vocational education [2]. Group 2: Educational Objectives - The partnership aims to develop a comprehensive talent cultivation system that integrates theoretical knowledge and practical skills, thereby improving the quality of technical talent in the industry [5][9]. - Both parties will focus on deepening the integration of industry and education, with an emphasis on co-developing courses, building training bases, and cultivating dual-qualified teachers [9]. Group 3: Strategic Goals - China Oriental Education will leverage its resources in vocational education, while Frans will contribute its industry expertise in logistics equipment, creating a new model for talent development [7][8]. - The collaboration is expected to facilitate the sharing of resources and mutual advantages, ultimately addressing the industry's talent shortage and enhancing the integration of education and industry [9].