Investment Rating - The report gives a "Buy" rating for China Oriental Education with a target price of HKD 10.05, indicating a potential upside of 51.3% from the current price of HKD 6.64 [3][6]. Core Insights - China Oriental Education, established in 1988, is the largest vocational skills education provider in China, focusing on five main areas: culinary arts, Western pastry and cuisine, information and internet technology, automotive services, and fashion beauty [4][15]. - The company has shown a compound annual growth rate (CAGR) of 20.89% in revenue from 2015 to 2019, driven primarily by the number of training participants. However, revenue growth slowed from 2020 to 2022 due to external factors such as restrictions on in-person classes and competition from general high school policies [4][27]. - The company has adapted its business strategy in response to changing market conditions, leading to a recovery in performance starting in 2024, with revenue and net profit showing significant year-on-year growth [4][6]. Company Overview - China Oriental Education operates under several brands, including New Oriental Culinary Education, Xinhua Computer, and Wan Tong Automotive, among others. As of June 2025, the company has 234 schools across various provinces and regions [15][17]. - The company’s revenue for the first half of 2025 was HKD 21.9 billion, representing a year-on-year increase of 10.2%, with net profit reaching HKD 4.0 billion, up 48.4% [4][44]. Industry Analysis - The vocational education market in China is projected to grow significantly, with the total market size expected to increase from RMB 516.7 billion in 2016 to RMB 1.1 trillion by 2026, reflecting a CAGR of 7.8% [74]. - The demand for vocational education remains strong despite the increasing number of general high school graduates, as many young individuals face higher unemployment rates and seek vocational training to enhance their employability [67][68]. - The report highlights a shift in the education landscape, where institutions with strong teaching capabilities and research strengths are better positioned to capture market share amid increasing competition [61][62].

Core Insights - The article highlights the successful integration of education and industry at Xinhua Computer Education, showcasing real market engagement through practical training and projects [1][10] - The institution emphasizes a dynamic curriculum that adapts to industry needs, ensuring students are equipped with relevant skills for the job market [2][11] Group 1: Market Engagement - Xinhua Computer Education has achieved over 7,900 monthly orders and sales exceeding 110,000 yuan, demonstrating the effectiveness of its e-commerce training [1][10] - Students operate real businesses in the e-commerce entrepreneurship park, engaging in product selection, supply chain management, and live streaming, which leads to tangible sales results [5][14] Group 2: Industry Collaboration - The "four-chain integration" model at Xinhua ensures that educational content is aligned with industry requirements, with input from industry experts shaping the curriculum [2][11] - Alumni play a crucial role in fostering partnerships with companies, leading to the establishment of "order classes" that provide students with direct pathways to employment [2][11][12] Group 3: Practical Training - The training environment at Xinhua is designed to mimic real-world industry settings, where students face actual market pressures and project deadlines [6][15] - The "order class" model allows students to work on live projects, gaining hands-on experience and enhancing their employability before graduation [8][17] Group 4: Mutual Benefits - The collaboration between Xinhua and industry partners reduces recruitment and training costs for companies while providing students with job-ready skills [9][18] - This model creates a sustainable ecosystem that benefits students, companies, and regional industries by ensuring a steady supply of qualified talent [9][18]

Group 1: Overseas Social Services - The investment rating for the overseas social services sector is positive, with a focus on Macau's gaming revenue maintaining double-digit growth and record visitor numbers during New Year's [1][4]. - In December, Macau's gross gaming revenue reached 20.9 billion MOP, representing a year-on-year increase of 14.8%, and recovering to 91% compared to the same period in 2019. The total gross gaming revenue is expected to grow by 9.1% in 2025 [4]. - The total number of visitors to Macau in 2025 is projected to be 40.06 million, a year-on-year increase of 14.7%, marking a historical high. On New Year's Day 2026, the number of visitors reached 188,000, the highest ever for that day [4]. Group 2: Overseas Pharmaceuticals - The investment rating for the overseas pharmaceuticals sector is also positive, with significant developments in drug approvals and clinical trials [2][7]. - BeiGene's BCL2 inhibitor received conditional approval in China for treating chronic lymphocytic leukemia and mantle cell lymphoma, marking it as the first and only BCL2 inhibitor approved for MCL in the country [8][9]. - The Hang Seng Healthcare Index rose by 11.15%, outperforming the Hang Seng Index by 9.12 percentage points, indicating strong market performance [7]. Group 3: Overseas Education - The investment rating for the overseas education sector is favorable, with a focus on vocational education and training [3][14]. - The education index increased by 2.7%, outperforming the Hang Seng Index by 1.3 percentage points, indicating a positive market trend [14]. - The report suggests focusing on Hong Kong vocational education companies, particularly China Oriental Education, which is expected to see enrollment growth due to strategic adjustments in response to market demand [16].

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年12月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國東方教育控股有限公司 呈交日期: 2026年1月5日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00667 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 3,800,000,000 | HKD | | 0.0001 | HKD | | 380,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 3,800,000,000 | HKD | | 0.0001 | HKD | | 380,000 | 本月底法定/註冊股 ...

Core Viewpoint - The report from GF Securities projects that China Oriental Education (00667) will achieve adjusted net profits of 800 million, 1.02 billion, and 1.26 billion yuan for the years 2025 to 2027, respectively, indicating a recovery in growth and profitability for the company as a leading player in the industry [1] Group 1: Company Overview - The company has been deeply engaged in the vocational education sector for over 30 years, starting with culinary training in 1988 and now offering training in four major vocational skill areas with seven brands [2] - The company is expected to see a turning point in profitability in 2024, with projected revenues of 4.12 billion and 2.19 billion yuan for 2024 and the first half of 2025, respectively, reflecting year-on-year growth of 3.5% and 10.2% [2] - Adjusted net profits for 2024 and the first half of 2025 are projected to be 530 million and 400 million yuan, respectively, with significant year-on-year increases of 86.6% and 48.4% [2] Group 2: Industry Insights - The vocational skills training industry is characterized by strong employment orientation, with a large potential student base, and the company focuses on training blue-collar talent in the service sector, which maintains a high employment outlook [3] - The competitive landscape of the industry is fragmented, with clear competitive advantages for leading companies in various sub-sectors [3] Group 3: Competitive Advantages - The company creates a positive cycle through continuous research and development, practical-oriented teaching, and diverse professional training systems, resulting in high-quality products [4] - The company has established a solid reputation through deep integration of industry and education, with employment rates for its programs consistently above 90% [4] Group 4: Future Outlook - Following operational optimizations in 2024, brands such as New Oriental and Xinhua are expected to improve, while Ouman Di Meiyu is in a phase of expansion and rapid growth [5] - The high school graduate demographic is anticipated to become a significant source of new students, with a projected increase of 85.4% in new training participants for the first half of 2025 [5] - The establishment of regional centers since 2022 is expected to enhance the company's overall educational capacity and profitability [5]

Group 1 - The core viewpoint of the report is that China Oriental Education (00667) is expected to see adjusted net profits of 800 million, 1.02 billion, and 1.26 billion yuan for the years 2025 to 2027, indicating a recovery in growth and profitability, with a target price of 10.16 HKD per share based on a 20x PE ratio for 2026 [1] - The company has been a leader in vocational education for over 30 years, starting with culinary training and expanding into four major training sectors, with a projected revenue of 4.12 billion and 2.19 billion yuan for 2024 and the first half of 2025, respectively, showing year-on-year growth of 3.5% and 10.2% [1] - The adjusted net profit for 2024 and the first half of 2025 is expected to be 530 million and 400 million yuan, reflecting significant year-on-year increases of 86.6% and 48.4% [1] Group 2 - The vocational skills training industry is characterized by strong employment orientation and sustainable demand growth, with a large potential student base, primarily focusing on blue-collar talent development in the service sector [2] - The competitive landscape of the industry is fragmented, with clear differentiation among leading companies in various segments [2] - The company maintains a positive cycle of teaching research, employment services, and operational recruitment, achieving over 90% employment rates for its graduates through continuous research and practical-oriented teaching [3] Group 3 - Future prospects include positive development across various brands and the anticipated impact of regional centers, with New Oriental and Xinhua entering a phase of improvement and structural optimization [4] - The high school graduate demographic is expected to become a significant source of new students, with a projected increase of 8,540 training participants in 2025, representing a year-on-year growth of 85.4% [4] - The establishment of regional centers since 2022 is expected to enhance the company's overall educational capacity and profitability [4]

Group 1 - The report emphasizes the importance of service consumption in 2026, highlighting a year of strategic layout and potential improvements in specific sectors and cycles [4][6][8] - The overall recovery of the service sector is characterized by a moderate rebound and structural prosperity, with service consumption growth outpacing that of goods consumption [11][12] - The report identifies three key changes affecting demand, policy, and technology, including a shift towards more rational consumer behavior, the impact of policy and globalization on corporate decisions, and accelerated technological iterations [11][4][6] Group 2 - The investment strategy for 2026 focuses on boosting domestic demand, with significant potential for service consumption in China compared to developed countries [19][26] - The report outlines specific sub-sectors such as duty-free, hotels, and education, which are expected to perform differently based on demand and supply dynamics [7][8][34] - Recommendations include focusing on cyclical recovery and sector-specific prosperity, with suggested investments in companies like China Duty Free Group, Huazhu Group, and Meituan [4][34][8] Group 3 - The report notes that the service sector has underperformed compared to the broader market, with a year-to-date increase of 14.55%, lagging behind the CSI 300 index [14][12] - Structural trends indicate that leading companies in tea drinks and hotels have outperformed, while duty-free and hotel stocks have shown strength in the fourth quarter [14][12] - The report highlights the importance of policy measures aimed at enhancing service consumption, including various initiatives to stimulate demand and improve the consumer environment [26][28][27]

Summary of Conference Call Records Industry and Company Focus Home Appliances Industry - The tightening of national subsidy policies is focusing on core categories such as black and white appliances, which supports companies like Midea, Haier, TCL Electronics, and Hisense Visual. However, competition remains fierce for brands like Hisense Home Appliances and Gree Electric, with better investment opportunities expected after Q1 [1][4] Pet Industry - The pet industry continues to experience high single-digit growth, with pet food growth around 10%. Online channels, particularly Douyin and Pinduoduo, are seeing significant growth, while offline channels face pressure. The industry is expected to add approximately 4 million new pet owners in 2025, driving demand [5][6] - Head brands are growing significantly faster than the industry average, while smaller brands are struggling, often focusing on offline channels to maintain profitability. The trend is increasingly favoring market concentration towards head brands [6] Education Industry - China Oriental Education is benefiting from post-pandemic expansion and a national focus on employment, with double-digit growth in enrollment numbers. The company specializes in vocational education with a high employment rate, which provides a competitive advantage. New training programs are rapidly growing, and the company is expanding into emerging fields [8][10] Pharmaceutical Industry - The pharmaceutical industry is focusing on the small nucleic acid supply chain, with Novartis's Inqisiran entering medical insurance but facing capacity shortages. Companies that meet FDA audit standards and enter multinational supply chains, such as Lianhua Technology and Chen Da Pharmaceutical, are recommended for attention [11] Food and Beverage Industry - The food and beverage industry is seeing trends towards spring excitement, health directions, new products, and cyclical growth. Health products and oatmeal sectors are performing well, with companies like Dongpeng Beverage expected to grow over 20% next year [12][13] Light Industry - The light industry is adopting a dual strategy focusing on both domestic and international sales. The two-wheeler market is performing well, and solid-state batteries may drive growth in the electric vehicle sector. The industry is expected to have a positive outlook in the near future [14] Key Points and Arguments Home Appliances - The 2026 home appliance replacement policy will focus more on traditional large appliances, reducing the variety of small appliances eligible for subsidies. The overall subsidy amount may decrease, but support for core categories is expected to remain stable or even increase [2] Pet Industry - The pet industry is facing a bottleneck in product innovation, with most developments being minor improvements. There is a consensus on the need for functional and specialized products, requiring more investment in consumer education and brand building [5][6][7] Education Industry - The company expects to achieve a revenue of 1 billion yuan in 2026, with a projected compound profit growth rate of 15%-20% over the next three years. The current valuation is low, with a high dividend rate, making it a recommended investment target [9][10] Pharmaceutical Industry - The small nucleic acid supply chain is critical, with China being the largest production market. The industry faces challenges in meeting quality standards for FDA compliance, making it essential to focus on companies that can meet these standards [11] Food and Beverage Industry - Companies with strong operational momentum are expected to perform well, and the white liquor sector is seen as having good investment value [12][13] Light Industry - The light industry is expected to see sales growth due to inventory levels being low and potential technological effects in the upcoming quarters [14][15] Globalization and Export Markets - The export market is influenced by the appreciation of the RMB and pessimistic expectations regarding the US real estate market. However, long-term focus should be on new product development and self-owned brands [17][18] Pulp Industry - The pulp sector is expected to have significant elasticity in the first half of next year due to external factors affecting wood chip supply and no new capacity expansion, leading to potential price increases [19][20]

Core Insights - The article emphasizes the importance of skilled talent in supporting industrial upgrades and economic vitality in the context of high-quality development and employment-first strategies in China [1][6] Group 1: Employment and Skills Development - China Oriental Education has established a comprehensive employment support system that spans the entire process from learning to employment and development, tailored to different demographic needs [2] - The organization focuses on solidifying professional foundations and connecting students with high-end industry positions, exemplified by graduates from New Oriental Culinary Education successfully entering Michelin-starred restaurants [2] - For groups with potential for transformation, the company provides full-process support from skill development to resource connection, helping veterans transition into management roles in the culinary industry [2] Group 2: Entrepreneurial Support - The organization offers systematic support for young individuals seeking to realize personal value through skills, as demonstrated by a graduate who turned a passion for baking into a successful personal brand with annual revenue exceeding 2 million yuan [3] - The curriculum is market-oriented, providing comprehensive entrepreneurial guidance and sustainable resource connections to help students find development opportunities in niche fields [3] Group 3: Industry-Education Integration - China Oriental Education extends industry-education integration beyond talent cultivation to regional service and lifelong development, creating a sustainable ecosystem through collaboration with thousands of enterprises [4] - The organization actively participates in local industry planning and skill talent development, ensuring that educational supply dynamically matches regional development needs [4] - Alumni networks are leveraged to create localized employment opportunities, exemplified by graduates returning to mentor current students, enhancing the ecosystem's vitality [4] Group 4: Lifelong Development and Core Competencies - The ultimate goal of this ecosystem is to create a virtuous cycle of training, employment, and community service, focusing on transferable core competencies such as problem-solving and continuous learning [5] - This approach aims to ensure that graduates can adapt to industry changes and achieve sustainable career development, thereby injecting lasting vitality into regional economies [5] Group 5: Commitment to National Strategy - In alignment with national policies promoting employment and skill development, China Oriental Education translates macro strategies into effective practices that meet diverse employment needs [6] - The organization is committed to high-quality development in modern vocational education, continuously optimizing professional layouts and talent cultivation models in response to technological advancements and industry changes [7] - By adhering to the philosophy that vocational education is synonymous with employment education, the organization not only helps students realize personal value but also contributes to national strategies and economic development [7]

Core Viewpoint - China Oriental Education (00667.HK) has received national recognition as two of its affiliated schools have been selected as training bases for the 48th World Skills Competition, highlighting the company's commitment to high-quality vocational education and skill development [1][8]. Group 1: Recognition and Achievements - Anhui New Oriental Culinary Senior Technician School has been designated as the national training base for the culinary (Western cuisine) project, marking a historic breakthrough as it is the first such base in Anhui Province [2][9]. - Ningxia New Oriental Technician School has successfully retained its status as the training base for sugar art/pastry making for two consecutive sessions, demonstrating its ongoing leadership in this field [2][9]. - A total of seven students from China Oriental Education have been selected for the Chinese training team for the 48th World Skills Competition, covering five areas including culinary (Western cuisine), 3D digital game art, sugar art/pastry making, beauty, and hairdressing [4][11]. Group 2: Training and Development System - The success of the students is attributed to China Oriental Education's unique "Five Educations in Parallel, Competition and Teaching Integration" talent cultivation system, which integrates industry standards, competition regulations, and daily teaching [4][11]. - The company has established a progressive training model of "Foundation-Enhancement-Competition," providing personalized growth paths and practical training environments for students [4][11]. - The training bases are positioned as key incubators for nurturing Chinese skill talents as the 2026 World Skills Competition approaches, emphasizing the company's long-term commitment to high standards and quality development in vocational education [6][13].