Core Viewpoint - The transformation of the education industry driven by AI is no longer optional but essential, with Huatu Group committing to an all-in approach to AI integration, aiming to redefine educational boundaries and establish a robust competitive advantage in the AI-native era [1][2]. Group 1: AI Strategy and Implementation - Huatu Group's AI strategy is based on a "three-in-one" approach, planning to implement 150 AI scenarios across teaching, research, and operations within the next two years [4]. - The company emphasizes internal efficiency improvements through AI, which has become a critical engine for enhancing productivity in core areas such as teaching and operations [4][5]. - AI has significantly increased efficiency, with exam question generation becoming ten times faster and video production costs reduced to one-tenth of previous levels [5]. Group 2: Product Development and Market Impact - The AI products have shown strong market performance, with AI interview evaluation tools achieving over one million uses within two months and AI essay grading experiencing a 100% month-over-month growth in usage [5][6]. - Huatu has built a comprehensive data resource system, integrating over 160,000 hours of internal course transcripts and a vast array of external educational materials, enhancing the quality of AI-driven products [5][6]. Group 3: Diversification and Future Vision - The company aims to create a full-cycle service ecosystem that enhances both exam preparation and workplace skills, thereby breaking traditional educational limitations [6]. - Huatu's diversification strategy includes transforming high-cost training into standardized, scalable products, thus enabling dual revenue growth through increased scale and pricing [6]. - The future vision positions Huatu as a partner in continuous capability enhancement, evolving from a public examination training expert to a comprehensive educational service provider [6].

Core Insights - The company has experienced a significant surge in usage and demand for its AI interview evaluation product, with token calls doubling and nearly 60,000 candidates utilizing the service since its launch in April 2025 [2][4]. Group 1: Product Performance - The AI interview evaluation product has become a flagship offering for the company, achieving over 150 million practice questions completed, with an average of more than 25 questions practiced per user [2]. - The product's rapid adoption is evidenced by its internal benchmark of exceeding one million uses within two months, achieving this milestone in just 40 days [4]. Group 2: Addressing Industry Pain Points - Traditional interview training has two major challenges: reliance on scarce, high-cost instructors and the time-consuming nature of manual feedback, which limits scalability and timely responses [4]. - The AI solution provides immediate feedback within 30 seconds across multiple dimensions, ensuring consistent quality and reducing variability in evaluation standards [4]. Group 3: Efficiency and Cost Reduction - The integration of AI has led to significant cost savings and efficiency improvements, allowing instructors to focus on more valuable tasks such as course design and student inquiries [6]. - AI applications across the company's operations, including essay grading, have resulted in a 30% reduction in labor time, with the potential to save millions in labor costs annually [7]. Group 4: Market Trends and Future Growth - The company anticipates a new wave of growth in AI applications within the public examination training sector, with AI grading seen as a solution to long-standing industry challenges [9]. - The company's commitment to AI is reflected in a 160% year-on-year increase in R&D spending, aimed at expanding its AI team and developing approximately 20 AI products [10]. - Collaborations with other leading firms in the industry are expected to reshape competitive dynamics, focusing on educational quality rather than price wars [10].

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: 希教國際控股有限公司 呈交日期: 2026年1月6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) | 01765 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | USD | | 0.00001 | USD | | 100,000 | | 增加 / 減少 (-) | | | | | | | USD | | | | 本月底結存 | | | 10,000,000,000 | USD | | 0.00001 | USD | | 100,000 | 本月底法定/註 ...

Financial Performance - Total revenue for the year ended August 31, 2025, reached RMB 3,960.34 million, a 6.1% increase from RMB 3,732.07 million in 2024[20]. - Adjusted net profit for 2025 was RMB 705.81 million, reflecting a slight increase of 1.2% compared to RMB 693.18 million in 2024[20]. - Total assets decreased to RMB 21,997.20 million in 2025 from RMB 22,281.52 million in 2024, a decline of 1.3%[22]. - Total liabilities decreased to RMB 12,415.06 million in 2025, down 5.4% from RMB 13,127.02 million in 2024[22]. - The company reported a net profit of RMB 386.68 million for 2025, down from RMB 613.09 million in 2024, indicating a decline of 37.0%[44]. - The group's cash and bank balances totaled RMB 3,291.59 million as of August 31, 2025, compared to RMB 3,100.75 million the previous year[57]. - The net debt-to-equity ratio improved from 1.5% as of August 31, 2024, to -4.9% as of August 31, 2025, due to higher cash and cash equivalents[61]. - The debt-to-equity ratio decreased to approximately 29.5% as of August 31, 2025, down from 35.4% the previous year[62]. Operational Efficiency - Lean management practices will be deepened to enhance operational efficiency and ensure healthy cash flow while controlling debt risks[17]. - The company is implementing a strategy to enhance operational capital management efficiency and strengthen control over interest-bearing liabilities[42]. - The company aims to optimize cost structures and improve management efficiency through technology, focusing on sustainable growth in global markets[41]. Recruitment and Partnerships - Over 1,100 teachers were recruited during the reporting period, with nearly 100 recognized as senior "dual-qualified" teachers[11]. - The company established nearly 100 new partnerships with enterprises, hosting 799 recruitment events that attracted 5,346 companies and offered over 306,000 job positions[12]. - The company held 799 recruitment events, attracting 5,346 participating companies and offering over 181,000 job positions[24]. - The average placement rate for graduates increased steadily compared to the previous year, with a 90% pass rate for students in employment guidance training[30]. International Strategy - The international strategy saw significant progress, with institutions like INTI International University rising to 509th in the QS World University Rankings and achieving the "Best Higher Education Group in Malaysia" award[13]. - The internationalization strategy has strengthened, with the Malaysian university ranking 509th in the QS World University Rankings for 2026[25]. - The company achieved a significant milestone in international education, with Malaysia's INTI International University ranked 509th globally and 122nd in Asia in the 2026 QS World University Rankings[31]. Technology Integration - The company plans to integrate new technologies such as AI, big data, and VR/AR into the educational process to enhance student problem-solving skills[15]. - The company aims to enhance the integration of artificial intelligence in education and training, aligning with national policies to foster innovation and talent development[27]. - The company plans to leverage technology integration, including AI and VR/AR, to enhance educational delivery and create immersive training environments[39]. Corporate Governance - The company has adhered to the corporate governance code and met the majority of the recommended best practices as of August 31, 2025[69]. - The company is focused on enhancing shareholder value through effective corporate governance and regular reviews of governance practices[69]. - The company has established a new investment strategy under the leadership of the newly appointed Chief Investment Officer, effective January 23, 2025[77]. Shareholder Information - The board of directors did not recommend a final dividend for the year ending August 31, 2025, due to funding arrangements[73]. - The company has approximately RMB 5,132 million available for distribution to shareholders as of August 31, 2025, which includes share premium reserves[115]. - The company does not recommend the distribution of a final dividend for the year ending August 31, 2025, due to funding arrangements[110]. Risk Management - The company faces risks related to the competitive landscape of private higher education in China, which may pressure pricing and profit margins[108]. - The company has implemented measures to mitigate various risks and uncertainties, as detailed in the corporate governance report[107]. - The company is subject to regulatory uncertainties regarding the registration of independent colleges as for-profit private schools under current legislation[108]. Compliance and Regulatory Issues - The company has complied with relevant laws and regulations, including the Companies Ordinance and the Securities and Futures Ordinance, regarding information disclosure and corporate governance[103]. - There were no significant non-compliance issues affecting the group's business and operations for the year ending August 31, 2025[103]. - The company has a strong focus on compliance with various laws and regulations in China, including the Foreign Investment Industry Guidance Catalog and the Education Law[103]. Employee and Teaching Staff - As of October 31, 2025, the total number of enrolled students was 287,808, a decrease from 291,264 in 2024, with undergraduate institutions increasing from 138,739 to 145,849[38]. - The company has approximately 13,500 teaching staff as of August 31, 2025[197]. - As of August 31, 2025, 32.9% of the total building area of the company's schools has not obtained property ownership certificates due to regulatory issues[190]. Property and Assets - The land held for property development in Sichuan Province has a book value of approximately RMB 304 million as of August 31, 2025, down from RMB 316 million as of August 31, 2024[113]. - The company has taken extensive measures to correct deficiencies in its properties and is actively following up on government approvals for necessary certificates[191]. - There are no known actual or potential lawsuits or claims against the company due to property deficiencies as of August 31, 2025[191].

Financial Performance - Total revenue for the year ended August 31, 2025, reached RMB 3,960.34 million, a 6.1% increase from RMB 3,732.07 million in 2024[20]. - Adjusted net profit for 2025 was RMB 705.81 million, reflecting a slight increase of 1.2% compared to RMB 693.18 million in 2024[20]. - Total assets decreased to RMB 21,997.20 million in 2025 from RMB 22,281.52 million in 2024, a decline of 1.3%[22]. - Current liabilities reduced to RMB 8,781.72 million in 2025, down 6.6% from RMB 9,407.66 million in 2024[22]. - The company reported a net profit of RMB 386.68 million for 2025, down from RMB 613.09 million in 2024, indicating a decline of 37.0%[44]. - Adjusted gross profit for 2025 was RMB 1,720.10 million, up from RMB 1,621.68 million in 2024, reflecting a growth of 6.1%[45]. - The group's cost of sales for the same period was RMB 2,292.54 million, up RMB 134.04 million or 6.21% from RMB 2,158.50 million, primarily due to increased teaching quality and staff compensation[49]. - Gross profit for the fiscal year was RMB 1,667.80 million, reflecting an increase of RMB 94.23 million or 5.99% from RMB 1,573.57 million[50]. - Selling expenses rose to RMB 327.35 million, an increase of RMB 85.50 million or 35.35% from RMB 241.85 million, mainly to expand enrollment channels[51]. - Administrative expenses increased to RMB 613.90 million, up RMB 13.35 million or 2.22% from RMB 600.55 million, attributed to higher management salaries and professional service fees[52]. - Financing costs decreased to RMB 225.68 million, down RMB 63.73 million or 22.02% from RMB 289.41 million, due to reduced loan scale and optimized loan structure[53]. - The group's cash and bank balances totaled RMB 3,291.59 million as of August 31, 2025, compared to RMB 3,100.75 million the previous year[57]. - The current ratio improved to 0.69 as of August 31, 2025, up from 0.43 the previous year[59]. - The debt-to-equity ratio decreased to approximately 29.5% from 35.4% the previous year[62]. Operational Developments - The company successfully resolved its debt crisis by disposing of certain assets, reducing liabilities and laying a solid foundation for future development[10]. - The company effectively reduced its debt scale and improved cash flow by rationally disposing of non-core assets, ensuring stable operations[14]. - There will be a focus on lean management to improve operational efficiency and ensure healthy cash flow while controlling debt risks[17]. - The company introduced 32 new programs related to cutting-edge industries such as artificial intelligence and big data analysis, while discontinuing 20 programs that did not align with market demand[28]. - The company aims to optimize cost structures and improve management efficiency through technology, while focusing on curriculum development and faculty construction[41]. - The company is implementing measures to enhance operational capital management efficiency and strengthen control over interest-bearing liabilities[42]. - The company is actively expanding its global presence, particularly in regions along the "Belt and Road" initiative, to tap into high-demand areas for higher education[41]. Educational Initiatives - Over the reporting period, the company introduced over 1,100 teachers and recognized nearly 100 senior "dual-qualified" teachers, enhancing teaching quality[11]. - The company established nearly 100 new partnerships with enterprises, hosting 799 recruitment events that attracted 5,346 companies and offered over 306,000 job positions[12]. - The company aims to enhance the integration of artificial intelligence in education and training, aligning with national strategies for innovation and talent development[27]. - The average placement rate for graduates increased steadily compared to the previous year, with a 90% pass rate for students in employment guidance training[30]. - The company provides pre-service training for new teachers to facilitate their integration into the teaching team[199]. Corporate Governance - The company has adhered to the corporate governance code and met the majority of the recommended best practices as of August 31, 2025[69]. - The company is focused on enhancing shareholder value through effective corporate governance practices and regular reviews[69]. - The company has established a new investment strategy under the leadership of the newly appointed Chief Investment Officer, effective January 23, 2025[77]. - The company has a diverse board consisting of nine directors, including three executive directors and three independent non-executive directors[75]. - The independent non-executive directors have confirmed their independence according to the listing rules[120]. - The company has established service contracts for all directors, which require re-election as per the articles of association[119]. - The company has received confirmations of independence from all independent non-executive directors as of the reporting date[120]. - The company has established a mechanism to avoid conflicts of interest among board members[187]. - The company has appointed three independent non-executive directors to balance the interests of shareholders and promote overall corporate benefits[187]. Shareholder Information - The company issued 444,792,885 shares through a rights issue, raising approximately HKD 87.4 million after expenses[68]. - The company redeemed all outstanding convertible bonds for a total settlement amount of USD 162,668,300, and issued 4,168,549 shares as part of the conversion of USD 2,070,000 in convertible bonds[68]. - The board of directors did not recommend a final dividend for the year ending August 31, 2025, due to funding arrangements[73]. - The company has a reserve available for distribution to shareholders of approximately RMB 5,132 million as of August 31, 2025[117]. - Wang Huiwu holds a total of 3,888,325,240 shares, representing approximately 47.27% of the company's equity[122]. - Major shareholder Maysunshine Holdings Limited owns 3,717,553,240 shares, accounting for 46.29% of the company's equity[126]. Risk Management - The company faces risks related to the competitive landscape in the private higher education sector in China, which may pressure pricing and profit margins[108]. - The company has implemented measures to mitigate various risks and uncertainties, as detailed in the corporate governance report[107]. - The company faces risks related to potential penalties that could adversely affect its ability to operate in China[182]. - The company has taken measures to ensure compliance with contractual arrangements, including terminating related party transactions and potentially restructuring operations[183]. Compliance and Regulatory Matters - The group has complied with relevant laws and regulations, including the Companies Ordinance and the Securities and Futures Ordinance, regarding information disclosure and corporate governance[103]. - The group is not aware of any significant non-compliance issues that could materially affect its business and operations for the fiscal year ending August 31, 2025[103]. - The company has confirmed compliance with the disclosure requirements of Chapter 14A of the Listing Rules regarding related party transactions[194]. - The company has not faced any regulatory interference regarding its contractual arrangements as of the date of the report[165]. Employee Information - The company has approximately 13,500 employees, with a gender diversity ratio of 34% male and 66% female[104]. - The total employee cost was approximately RMB 1,646.1 million, an increase from RMB 1,573.7 million as of August 31, 2024[104]. - The company participates in various employee social security plans managed by local governments, including housing, retirement, medical, maternity, and unemployment insurance[199]. - The company has not paid any compensation to directors to attract them to join or as compensation for leaving their previous positions[199].

Group 1: Higher Education Sector - The higher education sector is expected to see a reversal of difficulties due to a combination of bottoming fundamentals and policy advancements, with a focus on improving educational quality and encouraging the expansion of high-quality private colleges [5][6] - The reintroduction of profit-oriented classification management in Hunan Province in 2025 may serve as a pilot for nationwide implementation, providing a stable policy environment for private colleges to expand and meet the growing demand for higher education [5][6] - Key indicators of educational quality, such as student-to-teacher ratios and per-student funding, have met standards after five years of increased investment, suggesting that the investment cycle is peaking and operational efficiency in higher education companies is likely to recover [5][6] - Companies to watch in this sector include Yuhua Education, Zhongjiao Holdings, New Higher Education, China Kepei, Neusoft Ruixin, Xijiao International Holdings, and Zhonghui Group [5][6] Group 2: Vocational Education Sector - The demand for vocational training is surging, driven by an increasing number of university graduates and high school students entering the labor market, leading to a projected market size of 80 billion yuan in 2025 with a penetration rate of only 5% [6][7] - The youth unemployment rate, particularly among those aged 16 to 24, is higher than the urban average, indicating a growing need for vocational skills training [6][7] - Companies to focus on in the vocational education sector include China Oriental Education and Fenbi [6][7] Group 3: Education Industry Trends - The education industry has undergone significant changes due to the "double reduction" policy, resulting in a 96% reduction in capacity in the academic training sector, with a limited number of operational licenses being redistributed [7] - The shift towards competency-based training is gaining momentum, with institutions leveraging their operational qualifications to expand their market share through non-academic training services [7] - The industry is moving towards a "franchise" model, which is expected to enhance revenue and profit growth for compliant institutions [7] Group 4: Investment Recommendations - The report recommends focusing on Hong Kong-listed vocational education companies, particularly China Oriental Education, which is adapting its operational strategy to cater to the needs of high school graduates [9] - In the higher education sector, the potential reintroduction of profit-oriented options is expected to enhance the revenue-sharing certainty for private colleges, with companies like Yuhua Education, Zhongjiao Holdings, and China Kepei being highlighted for their growth potential [9] - The report also suggests monitoring Chinese education companies listed in the US, such as New Oriental, TAL Education, and others, which are showing strong enrollment data [9]

Core Viewpoint - Shenwan Hongyuan maintains a target price of HKD 0.79 for Xijiao International Holdings (01765) and keeps a "Buy" rating, believing that the company's cost increases have peaked and profitability may rebound [1] Group 1: Financial Performance - Xijiao International Holdings reported a revenue of HKD 3.96 billion for the fiscal year 2025, representing a year-on-year growth of 6.1% [1] - The net profit for the year was HKD 390 million, with an adjusted net profit of HKD 740 million, reflecting a 6.5% increase year-on-year, aligning with expectations [1] Group 2: Cost Management and Operational Efficiency - The number of enrolled students for fiscal year 2025 was 291,000, a slight increase of 0.1% from fiscal year 2024, with a stable student structure [1] - The average tuition fee increased by 6% to HKD 13,600 per academic year, while the main operating cost was HKD 2.29 billion, resulting in a gross margin of 42.1% [1] - The company sold 8 low-efficiency educational assets during fiscal year 2025, which included 6 vocational colleges and 2 undergraduate institutions, aiming to enhance operational efficiency by reducing the number of institutions [1] Group 3: Future Outlook - The company expects the gross margin to start expanding again from fiscal year 2026, with the proportion of undergraduate students increasing by 3 percentage points to 51%, which is anticipated to further improve profitability due to higher tuition fees [1]

Core Viewpoint - The report from Shenwan Hongyuan maintains a target price of HKD 0.79 for Xijiao International Holdings (01765) and a "Buy" rating, suggesting that the company's cost increases have peaked and profitability may rebound, with operational efficiency expected to improve after sustained investments in education [1] Group 1: Financial Performance - Xijiao International Holdings reported a revenue of CNY 3.96 billion for the fiscal year 2025, representing a year-on-year growth of 6.1% [2] - The net profit for the same period was CNY 390 million, while the adjusted net profit (excluding goodwill impairment and convertible bond disposal costs) was CNY 740 million, reflecting a year-on-year increase of 6.5% [2] Group 2: Cost Management and Operational Efficiency - The number of enrolled students in fiscal year 2025 was 291,000, a slight increase of 0.1% compared to fiscal year 2024, with a stable student structure where undergraduates accounted for 48% and vocational students for 49%, an increase of 2.4 percentage points year-on-year [3] - Average tuition fees increased by 6% to CNY 13,600 per academic year, while the main operating costs were controlled at CNY 2.29 billion, resulting in a gross margin of 42.1% [3] Group 3: Asset Management and Future Outlook - The company sold 8 low-efficiency educational assets, including 6 vocational colleges and 2 undergraduate colleges, to enhance operational efficiency by reducing the number of institutions and focusing on higher tuition fee-generating undergraduate programs [4] - In fiscal year 2025, despite a 35.4% increase in enrollment expenses to CNY 327 million, the adjusted net profit margin was maintained at 18.6%, with expectations for the proportion of undergraduate students to rise by 3 percentage points to 51% in fiscal year 2026, further improving profitability [4]

Investment Rating - The report maintains a "Buy" rating for the companies in the higher education sector, specifically for New Higher Education Group and Xijiao International Holdings [8][11]. Core Insights - The profitability of higher education companies is expected to rebound as the peak of cost increases has passed, with improvements in operational efficiency anticipated due to reduced capital expenditures [4][11]. - New Higher Education Group reported a revenue of 2.6 billion yuan for the fiscal year 2025, a year-on-year increase of 7.8%, with adjusted net profit reaching 812 million yuan, up 5.2% [6][8]. - The student structure is continuously optimized, with an increase in the proportion of undergraduate students, leading to higher average tuition fees [6][7]. - The report highlights the importance of maintaining high-quality education and the strategic focus on enhancing educational facilities to improve student learning environments [3][4]. Summary by Sections 1. Higher Education Sector - The education index increased by 1% during the week, outperforming the Hang Seng Index by 1.8 percentage points [5]. - New Higher Education Group's student enrollment decreased slightly by 0.6% to 139,000, but the proportion of undergraduate students increased, contributing to an 8.1% rise in average tuition fees to 16,700 yuan per year [6][7]. - The company’s operational costs rose by 9.2% to 1.68 billion yuan, with significant increases in labor costs, which grew by 14.7% [3][7]. 2. Cost Management and Profitability - The peak of cost increases is believed to have passed, with capital expenditures decreasing from 920 million yuan in fiscal year 2024 to 690 million yuan in fiscal year 2025 [4][8]. - The report anticipates a recovery in gross profit margins starting from fiscal year 2026, with projected profits for fiscal years 2026 and 2027 adjusted to 880 million yuan and 1 billion yuan, respectively [8][11]. - Xijiao International Holdings reported a revenue of 3.96 billion yuan for fiscal year 2025, a 6.1% increase, while net profit decreased by 36.9% [9][10]. 3. Investment Recommendations - The report suggests focusing on Hong Kong-listed higher education companies, as profitability is expected to improve with reduced capital expenditures and a more favorable revenue distribution model [13]. - Companies such as New Higher Education Group, Xijiao International Holdings, and others are highlighted as potential investment opportunities due to their strategic adjustments and market positioning [13].

Investment Rating - The report maintains a "Buy" rating for the overseas education sector, particularly highlighting the potential rebound in profitability for higher education companies as they enhance their operational efficiency and educational quality [4][16]. Core Insights - The profitability of higher education companies is expected to improve as they transition from a phase of high costs to a more stable operational environment, driven by an increase in the quality of education and student enrollment structures [4][16]. - The report emphasizes the importance of maintaining high-quality education and optimizing student demographics, which is reflected in the rising average tuition fees and accommodation costs [2][3][4]. Summary by Sections Overseas Education - The education index increased by 1% during the week, underperforming the Hang Seng Index by 1.8 percentage points, with a year-to-date increase of 8.2% [6]. - New Higher Education Group reported a revenue of 2.6 billion yuan for FY25, a 7.8% increase year-on-year, with adjusted net profit rising by 5.2% to 812 million yuan [2][7]. - The student enrollment decreased slightly by 0.6%, but the proportion of undergraduate students increased, leading to an 8.1% rise in average tuition fees to 16,700 yuan per year [2][7]. - The company’s operational costs grew by 9.2% to 1.68 billion yuan, with labor costs rising significantly, indicating a focus on maintaining educational quality [3][8]. - The report predicts that the peak of cost increases has passed, and profitability is set to rebound, with expected net profits of 880 million yuan and 1 billion yuan for FY26 and FY27, respectively [4][9]. Key Companies - Xijiao International Holdings reported a revenue of 3.96 billion yuan for FY25, a 6.1% increase, but net profit fell by 36.9% due to previous high costs [11][12]. - The company has optimized its school management by reducing the number of institutions, which is expected to enhance operational efficiency and profitability [12][13]. - The report suggests focusing on several key players in the sector, including New Oriental, TAL Education, and Huazhong Education, as they are expected to benefit from the improving market conditions [16]. Investment Recommendations - The report recommends attention to Hong Kong-listed higher education companies, as the profitability outlook is improving with reduced capital expenditures and stabilized operational costs [16]. - It also highlights the potential for growth in vocational education companies, particularly those adapting to market demands and enhancing their service offerings [16].