Investment Rating - Maintains a "Buy" rating with a 6-month outlook [5] Core Views - The company is in a critical year of its fifth five-year plan (2022-2027), with a strong track record of exceeding performance targets annually [1] - The company operates 40 self-owned schools with a capacity for 180,000 students, currently serving 90,000, indicating significant growth potential [1] - The managed school business is expanding, with over 100 school segments in the pipeline and an additional 30 segments expected by September [1] - The company's diversified business segments, including study tours and educational technology, are thriving, with strong market positioning and potential for external expansion [2] - The company's competition training system has produced over 60 provincial-level award winners and multiple national team members, with successful external commercialization of its competition courses [3] - The company's AI-driven educational products have demonstrated significant effectiveness, with a 36-point average score improvement and an 86% improvement rate among students in a pilot program [2] Financial Projections - Expected revenues for FY25-27 are RMB 4.6 billion, RMB 6.4 billion, and RMB 8.8 billion, respectively [5] - Adjusted net profits for FY25-27 are projected to be RMB 800 million, RMB 1.1 billion, and RMB 1.4 billion, respectively [5] - EPS for FY25-27 is forecasted to be RMB 0.38, RMB 0.51, and RMB 0.67, respectively [5] Business Segments - The company's study tour business integrates knowledge learning with practical experiences, covering various fields such as history, natural sciences, technology, and arts, attracting top private schools for collaboration [2] - The educational technology platform, "Cloud Platform," has successfully implemented AI in classrooms and study rooms, with a notable pilot program showing a 97% university admission rate among participants [2] - The competition training system has been standardized and successfully exported, with a recent contract signed with a school in Fujian for competition course services [3] Market Performance - The company's stock price has shown significant growth, with a 34% increase over the past year, outperforming the Hang Seng Index [7]

Investment Rating - The report maintains a "Buy" rating for Tianli International Holdings with a target price of HKD 5.87 [1][7] Core Views - Tianli International Holdings benefits from clear policy boundaries in private education, stable industry demand, and a competitive landscape [1] - The company has a strong reputation for teaching, highly standardized operational management, and excellent capabilities for regional expansion [1] - It combines growth potential with stable dividend payouts, making it an attractive investment [1] Business Strategy "One Trunk" Business - The company is optimizing its student enrollment structure, aiming to increase the proportion of primary and middle school students to 65% and high school students to 35% by the 2025 academic year [2] - This adjustment is expected to accelerate the full enrollment of self-operated schools and enhance profitability in the core education sector [2] "Multiple Branches" Business - Subsidiary "Qiming Daren" focuses on AI education, with significant results in AI-based college entrance exam preparation, showing strong potential for nationwide expansion [3] - The study tour business has achieved rapid revenue growth through innovative course integration, positioning itself as a leader in the niche market [3] - The competition and foundation strengthening business has gathered top-tier teaching resources, achieving notable results and enhancing brand influence through external collaborations [3] - The托管 business is expanding rapidly, with plans to add 30-50 new school sections by the fall of 2025, further diversifying profit sources [3] Financial Performance and Valuation - The report forecasts adjusted net profits of RMB 771 million, RMB 995 million, and RMB 1.132 billion for FY25/26/27, respectively [5] - Using a DCF valuation method with a WACC of 10.76% and a perpetual growth rate of 1%, the target price is set at HKD 5.87 [5] - Revenue is expected to grow from RMB 2.303 billion in 2023 to RMB 5.466 billion in 2027, with a CAGR of 18.67% from 2025 to 2027 [6] - EPS is projected to increase from RMB 0.16 in 2023 to RMB 0.52 in 2027 [6] Shareholder Returns and Capital Planning - The company has maintained a stable dividend payout ratio of 30% since its IPO and plans to continue this trend in FY25 [4] - Share buybacks have been actively conducted, reflecting management's confidence in the company's long-term value [4] Valuation Metrics - The PE ratio is expected to decline from 21.95x in 2023 to 6.72x in 2027, indicating improving valuation attractiveness [6] - The PB ratio is projected to decrease from 3.58x in 2023 to 1.63x in 2027 [6] - The EV/EBITDA ratio is forecasted to drop from 20.25x in 2023 to 6.83x in 2027 [6]

Financial Performance and Costs - Financial costs increased from RMB 62.5 million in the year ended August 31, 2023, to RMB 86.4 million in the reporting year, primarily due to increased interest on bank loans and lease liabilities[1] - Income tax increased by 68.4% from approximately RMB 109.4 million (restated) in the year ended August 31, 2023, to approximately RMB 184.3 million in the reporting year, mainly due to increased pre-tax profits from taxable subsidiaries[2] - Administrative expenses increased by 7.3% from approximately RMB 240.1 million in the year ended August 31, 2023, to approximately RMB 257.5 million in the reporting year, primarily due to increased administrative staff costs, share-based compensation expenses, and other expenses[9] - The actual income tax rate for the year ended August 31, 2024, was 24.9%, compared to 24.6% (restated) for the year ended August 31, 2023[2] - Revenue for the fiscal year ending August 31, 2024, was RMB 3,320,898,000, derived from integrated education services, product sales, integrated logistics services, and management and franchise fees (net of rebates and sales-related taxes)[64] - Revenue for the year ended August 31, 2024, was RMB 3,320.9 million, a 44.2% increase from RMB 2,302.5 million in 2023[127] - Gross profit for 2024 was RMB 1,118.9 million, up 43.7% from RMB 778.8 million in 2023[127] - Net profit attributable to the company's owners for 2024 was RMB 575.9 million, a 70.9% increase from RMB 337.0 million in 2023[127] - Basic earnings per share for 2024 were RMB 27.51 cents, up from RMB 16.05 cents in 2023[127] - The company's effective tax rate for 2024 was 24.9%, calculated based on the income tax expense of RMB 184.3 million and pre-tax profit of RMB 740.5 million[127] - The company reported a net profit of RMB 337,028 thousand for the year ended August 31, 2024, compared to a net loss of RMB (237,995) thousand in the previous year[136] - Net profit for the year reached RMB 575,956 thousand, with a comprehensive income total of RMB 575,977 thousand[166] Capital Structure and Financial Position - The company's capital structure has remained unchanged since its successful listing on the Main Board of the Hong Kong Stock Exchange on July 12, 2018[4] - The company's cash and cash equivalents were approximately RMB 1,358.4 million as of August 31, 2024, compared to RMB 1,501.7 million as of August 31, 2023[42] - The company's net current liabilities increased to approximately RMB 2,438.4 million as of August 31, 2024, from RMB 2,198.4 million as of August 31, 2023, primarily due to an increase in short-term bank loans[40] - The company's total borrowings were approximately RMB 2,053.0 million as of August 31, 2024, compared to RMB 1,672.4 million as of August 31, 2023[46] - The company's debt-to-equity ratio was approximately 20.1% as of August 31, 2024, compared to 17.5% as of August 31, 2023[46] - The company had unused bank financing of approximately RMB 844.0 million as of August 31, 2024[46] - Total non-current assets increased to RMB 7,975,058 thousand in 2024, up from RMB 7,186,095 thousand in 2023, reflecting growth in property, plant, and equipment (RMB 4,969,301 thousand) and right-of-use assets (RMB 2,448,695 thousand)[129] - Current assets decreased to RMB 2,218,658 thousand in 2024 from RMB 2,371,130 thousand in 2023, with a notable decline in cash and cash equivalents to RMB 1,358,388 thousand from RMB 1,501,724 thousand[129] - Current liabilities increased to RMB 4,657,047 thousand in 2024, up from RMB 4,569,481 thousand in 2023, driven by higher trade payables (RMB 56,627 thousand) and other payables (RMB 609,858 thousand)[129] - Net current liabilities worsened to RMB (2,438,389) thousand in 2024 compared to RMB (2,198,351) thousand in 2023, indicating increased financial pressure[129] - Total equity increased to RMB 2,100,975 thousand in 2024, up from RMB 1,880,982 thousand in 2023, with retained profits rising to RMB 88,519 thousand from RMB (237,995) thousand[136] - The company's goodwill increased significantly to RMB 106,465 thousand in 2024 from RMB 16,413 thousand in 2023, indicating potential acquisitions or revaluations[129] - The company's deferred tax assets grew to RMB 337,019 thousand in 2024 from RMB 280,449 thousand in 2023, reflecting higher tax planning benefits[129] - The company's reserves increased to RMB 2,294,341 thousand as of August 31, 2024, from RMB 1,919,373 thousand in the previous year[164] - Non-controlling interests decreased to RMB 262 thousand as of August 31, 2024, from RMB 30,243 thousand in the previous year[164] - The company's total equity as of August 31, 2024, was RMB 2,473,036 thousand, up from RMB 2,100,975 thousand in the previous year[164] - Total equity as of August 31, 2024, amounted to RMB 2,095,468 thousand, compared to RMB 2,100,975 thousand after restatement for the previous year[166] - The company's net asset value as of August 31, 2024, was RMB 2,473,036 thousand, up from RMB 2,100,975 thousand in the previous year[164] - Equity attributable to the company's owners as of August 31, 2024, was RMB 2,472,774 thousand, compared to RMB 2,070,732 thousand in the previous year[164] Corporate Governance and Committees - The nomination committee held 1 meeting during the year ended August 31, 2024, to review the board's structure, size, composition, and diversity, and to make recommendations for director appointments and re-appointments[15] - The remuneration committee held 1 meeting during the year ended August 31, 2024, to review and approve management remuneration proposals and make recommendations on executive directors' and senior management's compensation[24] - The company's board committees, including the audit, remuneration, and nomination committees, are primarily composed of independent non-executive directors[5] - The company's nomination committee considers candidates' experience, knowledge, and professional skills to ensure effective board operation and diversity[14] - The company's audit committee held 2 meetings during the fiscal year ending August 31, 2024, with all members attending both meetings[141] - The company's directors have service contracts expiring on July 11, 2027 (for Luo Shi, Wang Rui, Liao Qiyu, Yang Dong, and Cheng Yiqun) and April 24, 2026 (for Pan Ping and Zhang Wenzao)[145] - No directors received any payments as inducement or compensation for joining or losing positions within the company during the fiscal year ending August 31, 2024[146] - The company did not pay any third party for director services during the fiscal year ending August 31, 2024[147] - No directors had significant interests in any major transactions or contracts of the company during the fiscal year ending August 31, 2024[150] - The company's controlling shareholders signed non-compete deeds, preventing them from engaging in businesses competing with the company's operations[150] - The independent non-executive directors confirmed that the controlling shareholders complied with the non-compete deeds during the fiscal year ending August 31, 2024[151] Shareholder Communication and Meetings - The company's shareholder communication policy ensures timely and comprehensive disclosure of information through financial reports, regulatory filings, and other channels to maintain transparency and investor confidence[52] - Shareholders holding at least 10% of the company's paid-up share capital with voting rights can request a special general meeting[50] - The company's annual general meeting serves as a key communication channel between the board and shareholders, with committee chairs and independent directors available to address inquiries[55] - Shareholders must submit written queries to the board, and anonymous or oral inquiries will not be addressed[56] - The company's website (www.tianlieducation.com) provides access to the latest and important information for shareholders and investors[52] - The company reimburses reasonable expenses incurred by shareholders if the board fails to convene a requested special general meeting within the specified timeframe[50] - Shareholders must provide full name, contact details, and identification when submitting written requests or queries to the company[57] Audit and Compliance - The company's financial statements for the year ending August 31, 2024, were audited by Ernst & Young and found to be in compliance with International Financial Reporting Standards (IFRS)[60] - The audit was conducted in accordance with Hong Kong Standards on Auditing, and the auditors confirmed their independence from the company[61] - Key audit matters were identified based on professional judgment, focusing on areas most significant to the financial statements[62] - The audit fees paid to Ernst & Young for the year ended August 31, 2024, were RMB 4.05 million for audit services, RMB 1.55 million for review of unaudited interim financial information, and RMB 0.28 million for agreed-upon procedures related to financial and non-financial information[101] - The company incurred additional fees of RMB 0.3 million for reviewing internal control systems and risk management, and HK$0.1357 million for preparing the environmental, social, and governance (ESG) report[101] Business Operations and Strategy - The company's business performance heavily depends on the level of comprehensive education service fees it can charge and its ability to maintain or increase these fees[35] - The company's business relies on the market recognition of the "Tianli" brand and the reputation of its school network[36] - The company may face challenges in executing its growth strategy or effectively managing growth, which could hinder its ability to seize new business opportunities[37] - The company's education business depends on its ability to promptly and adequately respond to changes in higher education admission requirements and testing materials[38] - The academic performance of students in the company's schools may decline, potentially leading to decreased satisfaction with its educational services[39] - The company faces intense competition in China's education sector, which may lead to adverse price pressures, reduced operating profits, loss of market share, departure of qualified teachers, and increased capital expenditures[71] - The company's business relies on the ability to attract and retain senior management, responsible and qualified teachers, and other personnel[72] - Depreciation and interest expenses incurred during the construction of new schools and expansion of existing schools may lead to a decline in net profit margins[73] - The company must obtain approvals, licenses, and permits, and complete multiple registrations and filings for the education and other services it provides in China[76] - The company must obtain substantial government approvals and comply with numerous regulations for the establishment of its school districts and campuses[77] - New or changing regulations in China's private education sector may impact the company's business operations and prospects[78] - The company's business may be affected by seasonal fluctuations, leading to fluctuations in quarterly operating performance[79] - The company has made full provisions for social insurance plans and housing provident funds as of August 31, 2024[81] - The company maintains good relationships with employees, customers, and suppliers to ensure smooth business operations[82] - The company's main business remains providing comprehensive education management and diversified services in China[178] Dividends and Reserves - The proposed final dividend for the year ended August 31, 2024, is RMB 4.08 cents per share (equivalent to 4.42 HK cents), totaling approximately RMB 86.0 million (equivalent to approximately HK$93.1 million)[86] - The company's distributable reserves as of August 31, 2024, were RMB 989 million[95] - The company paid dividends of RMB 137,976 thousand in 2024, up from RMB 101,663 thousand in 2023[173] Construction and Expansion Projects - The company's construction-in-progress for the year ended August 31, 2024, amounted to approximately RMB 313.4 million, primarily related to five school construction projects[89] - The company used RMB 194.97 million from the net proceeds for the expansion of self-built and self-operated projects in Shenzhen as of August 31, 2024[118] - The remaining balance of funds allocated for potential acquisitions of high-quality targets is expected to be fully utilized by August 31, 2025[116] - The company entered into a school construction framework agreement with Nanyuan Construction, which was renewed with new annual caps approved at a special shareholders' meeting on July 10, 2019[157] - The new school construction framework agreement for 2021 has an annual cap of RMB 1,500,000 thousand for the year ending August 31, 2022, RMB 750,000 thousand for the year ending August 31, 2023, and RMB 600,000 thousand for the year ending August 31, 2024[158] - The company paid or payable approximately RMB 223.05 million under the 2021 school construction framework agreement as of August 31, 2024[158] - The 2024 school construction framework agreement has a term of three years from September 1, 2024, to August 31, 2027, with annual caps approved at the extraordinary general meeting on September 27, 2024[160] Cash Flow and Investments - Cash flow from operating activities for 2024 was RMB 827,110 thousand, a decrease from RMB 975,668 thousand in 2023[170] - Depreciation of property, plant, and equipment for 2024 was RMB 170,794 thousand, up from RMB 131,568 thousand in 2023[170] - Amortization of intangible assets increased to RMB 9,913 thousand in 2024 from RMB 4,630 thousand in 2023[170] - Share-based payment expenses for the share award plan totaled RMB 3,418 thousand in 2024, down from RMB 4,501 thousand in 2023[170] - Share-based payment expenses for the share option plan rose to RMB 37,955 thousand in 2024 from RMB 23,297 thousand in 2023[170] - Income tax paid in 2024 was RMB 132,091 thousand, compared to RMB 94,350 thousand in 2023[170] - Investment activities resulted in a net cash outflow of RMB 344,417 thousand in 2024, compared to RMB 435,229 thousand in 2023[173] - The company purchased financial assets at fair value through profit or loss for RMB 86,000 thousand in 2024, a significant decrease from RMB 862,500 thousand in 2023[173] - Cash and cash equivalents decreased by RMB 77,179 thousand in 2024, compared to an increase of RMB 509,598 thousand in 2023[175] - The company's cash and cash equivalents at the end of 2024 were RMB 1,349,016 thousand, down from RMB 1,432,369 thousand at the end of 2023[175] - The company repaid bank and other borrowings of RMB 612,041 thousand in 2024, compared to RMB 281,786 thousand in 2023[173] - The company received RMB 1,347,191 thousand from related party advances in 2024, slightly lower than RMB 1,457,077 thousand in 2023[173] Subsidiaries and Business Structure - The company's subsidiaries include Tianli Education Holdings Limited and Tianli Education (Hong Kong) Limited, both with 100% ownership[182] - The company's subsidiaries also include several high schools and kindergartens in China, such as Luzhou Tianli School and Chengdu Wuhou District Kaixing Kindergarten[182] - Zhoukou Tianli High School Co., Ltd. has a registered capital of RMB 5 million and is fully owned by the company, providing high school education services[185] - Shenzhou Hongyu (Zhuhai Hengqin) Management Consulting Co., Ltd. has a registered capital of HKD 2 million and is fully owned by the company, focusing on management consulting[185] - Qiming Daren (Zhuhai Hengqin) Education Technology Co., Ltd. has a registered capital of RMB 2 million and is fully owned by the company, specializing in management consulting[185] - Sichuan Qiming Daren Technology Co., Ltd. has a registered capital of RMB 1 million and is fully owned by the company, engaged in management consulting[185] - Dayan Zhiguang (Zhuhai Hengqin) Education Consulting Co., Ltd. has a registered capital of HKD 2 million and is fully owned by the company, providing education consulting services[185] - Sichuan Lixing Study Travel Co., Ltd. has a registered capital of RMB 10 million and is fully owned by the company, offering study travel services[185] - Rizhao Shenzhou Tianli High School Co., Ltd. has a registered capital of RMB 5 million and is fully owned by the company, providing high school education services[185] - Dongying Shenzhou Tianli High School Co., Ltd. has a registered capital of RMB 1 million and is fully owned by the company, offering high school education services[185] - Yichun Shenzhou Tianli High School Co., Ltd. has a registered capital of RMB 2 million and is fully owned by the company, providing high school education services[185] - Guangyuan Jian'ge Shenzhou Tianli High School Co., Ltd. has a registered capital of RMB 1 million and is fully owned by the company, offering high school education services[185] Liabilities and Equity - Non-current liabilities as of August 31, 2024, include lease liabilities of RMB 459,468 thousand, deferred tax liabilities of RMB 64,945 thousand, and interest-bearing bank

Investment Rating - The report maintains a **Buy** rating for Tianli International Holdings (01773) with a 6-month target price [1] Core Views - Tianli achieved FY24 revenue of RMB 3.3 billion, up 44% YoY, with adjusted net profit of RMB 580 million, up 56% YoY [1] - The company's comprehensive education service revenue reached RMB 1.74 billion, up 43% YoY, while product sales grew 66% to RMB 920 million [1] - Tianli's school network covers 18 provinces and cities, serving 130,000 students across 58 schools as of November 2024 [1] Financial Performance - FY24 comprehensive education service revenue: RMB 1.74 billion (+43% YoY) [1] - Product sales: RMB 920 million (+66% YoY) [1] - Comprehensive logistics services: RMB 600 million (+23% YoY) [1] - Management and franchise fees: RMB 60 million (+53% YoY) [1] - Cash and equivalents: RMB 1.358 billion [1] - Operating cash inflow: RMB 827 million [1] - Capital expenditure: RMB 410 million (-32% YoY) [1] Educational Achievements - 272 students admitted to global top 50 universities in 2024, up 114% from 2023 [1] - 9 students admitted to QS top 10 universities, including Cambridge and Imperial College London [1] - Average first-tier university admission rate in mature Sichuan campuses: 55% [1] - Average undergraduate admission rate: 90%, significantly exceeding Sichuan's average [1] Operational Developments - Tianli successfully separated 7 high schools with independent operating licenses from integrated schools by FY24 [1] - High school student enrollment reached 53,900 in autumn 2024, up 46.8% from 36,708 in 2023 [1] - Lixing Study Tour company served over 110,000 students in 2024, including 15,000 from external schools [2] Technology Integration - AI Smart Classroom pilot launched in over 10 schools in 2024 [3] - 36 students in Yibin Tianli School's college entrance exam training camp improved scores by an average of 36 points [3] - Collaboration with Beijing No. 4 High School Hohhot Branch established for AI-assisted exam preparation [3] Future Outlook - FY25-27 revenue forecasts: RMB 4.6 billion, RMB 6.4 billion, RMB 8.8 billion [4] - Adjusted net profit forecasts: RMB 800 million, RMB 1.1 billion, RMB 1.4 billion [4] - EPS forecasts: RMB 0.37, RMB 0.5, RMB 0.66 [4] - PE ratios: 11X, 8X, 6X [4]

Investment Rating - Buy (First Coverage) [4] Core Views - Existing school utilization is improving, driving profit growth, while the light-asset model for expansion is expected to drive growth beyond expectations [3] - The market underestimates the company's endogenous growth potential, with the current utilization rate of existing schools at 50%, and the potential to accommodate 160,000 students, driving a CAGR of over 23% in revenue from 2024 to 2027 [3] - The company's high school business is expected to see a 10% improvement in expense ratio from 2024 to 2027, leading to a CAGR of over 28% in adjusted profits [3] - The light-asset model, including托管 (trusteeship) services, is expected to drive rapid expansion, with the potential to contribute an additional revenue of 27 billion yuan in the long term [3] Company Overview - Tianli International Holdings is a leading private education company in China, focusing on K12 education with a strong emphasis on academic performance [22] - The company operates 58 schools across 18 provinces, with a mature school network achieving over 55% first-tier university admission rates and 90% undergraduate admission rates [3] - The company has a stable ownership structure, with the founder holding 43% of the shares, and has been actively repurchasing shares since July 2023, demonstrating confidence in future growth [28] - The company has successfully transitioned its business model post-policy changes, focusing on profitable high schools and expanding into comprehensive素养 (quality education) services,游学研学 (study tours), and托管 (trusteeship) services [38] Industry Analysis - Private education serves as an important supplement to public education, especially in the high school segment, where public财政 (fiscal) resources are limited [49] - The政策 (policy) encourages the expansion of优质 (high-quality) high school education, with民办 (private) high schools playing a significant role in补充 (supplementing) public resources [74] - The民办 high school sector has seen rapid growth, with the number of students in民办 high schools increasing at a CAGR of 10% from 2019 to 2023, and the market share rising from 9% in 2010 to 20% in 2023 [74] - The适龄 (school-age) population for high schools is expected to grow at a CAGR of 1.2% from 2023 to 2030, with the入学率 (enrollment rate) for普通 (regular) high schools expected to increase, providing opportunities for民办 high schools [78] Business Strategy - The company has adopted a "一干多支" (one trunk, multiple branches) strategy, focusing on profitable high schools as the core business while expanding into multiple ancillary services [82] - The high school segment has shown strong growth, with the number of high school students increasing by 47% in the 2024-2025 academic year, driven by excellent academic performance [84] - The company has developed a comprehensive curriculum and teacher training system, ensuring high-quality education delivery and supporting future growth [90] - The company is expanding its多元 (diverse)升学 (college entrance) services, including艺术 (art),国际 (international), and复读 (repeater) programs, to meet the diverse needs of students [108] Financial Performance - The company's revenue and profit have shown strong growth, with FY2024 revenue increasing by 44% and profit by 66% [38] - The company's毛利率 (gross margin) has stabilized at around 34%, with the净利润率 (net profit margin) recovering to 17% in FY2024 [47] - The company's托管 (trusteeship)业务 (business) is expected to become a second growth curve, with the potential to contribute significantly to future revenue [127]

Investment Rating - The report maintains a "Recommend" rating for the company, citing its strong educational capabilities and potential for growth in its for-profit high school business [4][7] Core Views - The company's FY24 revenue reached 3.32 billion yuan, a 44% year-over-year increase, with net profit attributable to shareholders of 560 million yuan, up 66% year-over-year [2] - The company's student enrollment grew by 30% year-over-year to 130,000 students, with high school students accounting for 41.5% of the total, up 46% year-over-year [2] - The company's educational business revenue increased by 43% year-over-year to 1.74 billion yuan, driven by tuition fees and growth in study tours and quality education services [2] - The company's product sales revenue surged by 66% year-over-year to 920 million yuan, benefiting from optimized supply chain layout [2] - The company's for-profit high school business shows strong growth potential, with a 55% first-tier university admission rate in mature schools, significantly higher than the Sichuan provincial average [2] - The company's light-asset transformation is progressing smoothly, with ROE increasing by 8.5 percentage points to 24.3% in FY24 [3] Financial Projections - The company's revenue is projected to grow to 4.00 billion yuan in FY25, 4.74 billion yuan in FY26, and 5.46 billion yuan in FY27, with growth rates of 21%, 19%, and 15% respectively [5] - Net profit attributable to shareholders is expected to reach 735 million yuan in FY25, 949 million yuan in FY26, and 1.14 billion yuan in FY27, with growth rates of 28%, 29%, and 21% respectively [5] - The company's diluted EPS is forecasted to be 0.35 yuan in FY25, 0.45 yuan in FY26, and 0.54 yuan in FY27 [5] - The company's PE ratio is expected to decrease from 15.74 in FY24 to 12.20 in FY25, 9.45 in FY26, and 7.84 in FY27 [5] Market Data - The company's stock price on November 26, 2024, was 4.09 HKD, with a total market capitalization of 8.7 billion HKD [7] - The company's total shares outstanding are 2.116 billion, with all shares being tradable [7]

Investment Rating - The report maintains an "Outperform" rating for Tianli International Holdings (01773 HK) [3][4] Core Views - Tianli International Holdings achieved a 56% YoY growth in adjusted net profit in FY2024, exceeding expectations [3] - The company's revenue increased by 44 2% YoY to RMB 3 321 billion, with net profit rising 66 3% to RMB 556 million [3] - Adjusted net profit reached RMB 577 million, a 56 4% increase, surpassing the previously disclosed guidance of 56% growth [3][8] - The company's ROE hit a new high of 24 3%, driven by a combination of heavy and light asset strategies [3] Business Segment Analysis - Integrated education business revenue grew 43% YoY, accounting for 53% of total revenue [3][11] - Product sales revenue increased 66% YoY, contributing 28% of total revenue [3][11] - Comprehensive logistics revenue rose 23% YoY, making up 18% of total revenue [3][11] - Hosting business revenue grew 53% YoY, representing 2% of total revenue [3][11] Financial Performance - Gross margin slightly decreased by 0 1pct to 33 7% due to higher contribution from lower-margin product sales [3][17] - Operating expense ratio decreased by 2 2pct to 12 5%, reflecting strong cost control [3][17] - Adjusted net profit margin improved by 1 4pct to 17 4% [3][17] - Capital expenditure decreased by 32 2% YoY to RMB 407 million [3][18] Future Outlook - The company is expected to achieve revenue of RMB 4 55/6 17/8 29 billion in 2025-2027, with net profit of RMB 780 million/1 06 billion/1 48 billion [3][25] - The PE ratio is projected at 10 5x/7 7x/5 5x for 2025-2027 [3][25] - The company plans to maintain a 30% dividend payout ratio [3][18] Strategic Initiatives - The company is focusing on a combination of heavy and light asset strategies, primarily using leasing for school expansion [3][18] - Multiple business lines, including diversified education and cloud platform services, are being actively developed and expanded to external schools [3][22][24] - The company has invested approximately HKD 140 million in share buybacks since July 2023 [3][18]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's core business, including education services and managed operations, grew by 43% and 53% respectively, with significant growth in study tours [2] - FY2024 group revenue, annual profit, and adjusted net profit attributable to the parent company were 3.321 billion, 556 million, and 577 million yuan, representing year-on-year growth of 44.2%, 66.3%, and 56.4% respectively [1] - The company's ROE reached a historical high of 24%, driven by reduced capital expenditures and a shift towards leasing for expansion [2] Business Performance - Comprehensive education services, restaurant operations, product sales, and management and franchise fee revenues were 1.745 billion, 919 million, 597 million, and 60 million yuan, with year-on-year growth of 42.7%, 65.5%, 23.2%, and 52.9% respectively [2] - In 2024, 90% of the company's high school students exceeded the Chinese university undergraduate admission score, a 6.5 percentage point increase year-on-year, and 55% exceeded the first-tier university admission score, a 4.7 percentage point increase [2] - The company added 3 new managed schools in FY2024, contributing to the growth in management and franchise fee income [2] Financial Metrics - FY2024 gross margin was 33.8%, a slight decrease of 0.1 percentage points year-on-year, while net margin and adjusted net margin were 16.7% and 17.4%, up 2.2 and 1.4 percentage points respectively [2] - Administrative expenses as a percentage of revenue decreased by 2.7 percentage points to 7.8%, primarily due to reduced employee costs and office administrative expenses [2] - Contract liabilities increased by 2.4% to 1.346 billion yuan, while capital expenditures decreased to 407 million yuan from 600 million yuan in the previous year [2] Future Outlook - The company's high school business is expected to maintain a 30% annual revenue growth, with the number of high school students projected to double by 2027 [3] - The managed school business is expected to grow from 10 schools to 100 segments by 2027, with potential for further integration of high-margin literacy programs [3] - Revenue and net profit forecasts for FY2025-2027 have been adjusted, with FY2027 revenue and net profit projected at 7.843 billion and 1.329 billion yuan respectively [3] Valuation and Share Repurchase - The company's latest closing price on November 25, 2024, was HK$4.24, with FY2025-2027 P/E ratios of 11x, 8x, and 6x respectively [3] - The company plans to repurchase HK$200 million worth of shares, with HK$140 million already repurchased [3]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴 該等內容而引致之任何損失承擔任何責任。 1 （於開曼群島註冊成立的有限公司） （股份代號：1773） 年度業績公告 截至二零二四年八月三十一日止年度 財務摘要 | --- | --- | --- | --- | --- | |------------------------|-------------------|----------------------------------|-------------------|------------| | | | | | | | | 截至 | 截至 | | | | | 二零二四年 | 二零二三年 | | | | | 八月三十一日 | 八月三十一日 | | | | | 止年度 人民幣千元 | 止年度 人民幣千元 （經重列） | 變動 人民幣千元 | 百分比變動 | | | | | | | | 收益 | 3,320,898 | 2,302,540 | 1,018,358 | 44.2% | | 毛利 ...

Investment Rating - The report maintains a "Buy" rating for Tianli International Holdings (01773) with a 6-month target price [1] Core Views - FY24 revenue is expected to reach approximately RMB 3.3 billion, a 43% YoY increase, while adjusted net profit is projected at RMB 577 million, up 56% YoY [1] - Financial performance improvement is driven by steady growth in the number of customers for comprehensive education services and a significant increase in product sales revenue through online campus mall operations and supply chain integration [1] Business Expansion - Tianli has signed a new high school hosting project in Nanjing, covering an area of approximately 100 mu, with operations expected to commence on September 1, 2026 [1] - The company has entered into a service agreement with a middle school in Quanzhou, Fujian, to provide subject competition course training services [1] - KID STAR, a wholly-owned brand of Tianli, successfully won the bid for the first public-private partnership inclusive childcare project in Huangpu District, Guangzhou [1] Financial Forecasts - FY24-26 revenue forecasts are adjusted to RMB 3.3 billion, RMB 4.6 billion, and RMB 6.2 billion respectively [1] - Adjusted net profit for FY24-26 is projected at RMB 580 million, RMB 800 million, and RMB 1.1 billion respectively [1] - FY24-26 EPS is expected to be RMB 0.27, RMB 0.38, and RMB 0.5 per share, with corresponding P/E ratios of 14X, 11X, and 8X [1]