行 业 及 产 业 海外消费服务 行 业 研 究 / 行 业 点 评 相关研究 证 券 研 究 报 告 本期投资提示： ⚫ 海外教育：高教公司年报前瞻——办学投入拐点显现，经营效率提升可期 受制于学校规模扩张放缓，我们预计高教上市公司收入增速均总体放缓。同时学费成为推动公司收入增长的主要 因素。由于学费提升幅度大，中教控股和希教国际控股的收入实现双位数增长。其他 4 家高教公司收入增速为 个位数。由于办学质量提升的进度不一，高教公司盈利能力触底的时间点各不相同，利润增长出现分化。我们预 计已经完成质量提升进度的宇华教育和希教国际控股利润增速超过双位数，而其他高教公司盈利或各位数增长或 同比下降。我们预计质量提升将于 2025 年结束，高教公司盈利能力触底。未来受益学费提升和经营规模效应， 盈利能力提升可期。 黄哲 A0230513030001 huangzhe@swsresearch.com 周文远 A0230518110003 zhouwy@swsresearch.com 贾梦迪 A0230520010002 jiamd@swsresearch.com 胡梦婷 A0230524060004 humt@sws ...

Summary of the Conference Call for New Higher Education Group Company Overview - New Higher Education Group is focused on increasing the proportion of undergraduate students while reducing the proportion of vocational students, maintaining total enrollment numbers. Currently, the undergraduate student ratio is 40% and is expected to continue this trend in the coming years [2][6][8]. Financial Performance and Projections - Average tuition fee is projected to increase by approximately 5% to 10%, aligning with revenue growth. The average tuition fee for the 2024 academic year is around 16,000 RMB [2][9]. - The group anticipates annual capital expenditures of 800 to 900 million RMB over the next 3 to 5 years, primarily for the construction of the third phase of the Guizhou campus in 2025 [2][15]. - The company generates approximately 1.3 billion RMB in operating cash flow annually, with 900 to 1,000 million RMB available for discretionary cash flow after interest payments [2][15]. Debt Management - As of the latest interim results, the company has total interest-bearing liabilities of approximately 2.8 billion RMB, with 800 million USD in bank syndicate loans and the remainder being domestic liabilities. The plan is to keep short-term liabilities at around 30% to mitigate risk [2][16]. - The company is discussing the possibility of restarting dividends, considering options such as stock dividends or optional cash dividends, but no definitive answer has been provided yet [2][21][17]. Enrollment and Employment Metrics - The group operates 8 institutions, with 4 being undergraduate and 4 vocational colleges. The overall enrollment is approximately 140,000 students [5][3]. - The employment rate for the 2024 graduating class is 98.39%, with a high-quality employment rate of 37.72%, an increase of 10 percentage points from the previous year [3][28]. Strategic Initiatives - The group is committed to high-quality development, with plans to maintain or slightly increase total enrollment while ensuring average tuition and overall revenue grow by 5% to 10% annually [8][2]. - The group is focusing on enhancing its core competitiveness through continuous investment in teaching quality, student services, and campus facilities [12][13][29]. Market Position and Challenges - The perception of private undergraduate education is generally as a secondary option to public universities, with a need for improved brand recognition and educational quality [22][26]. - The group faces competition from public universities, especially in regions with increasing enrollment pressures, but reports strong enrollment figures in the Northeast region [12][26]. Future Outlook - The group plans to optimize its existing value propositions, such as better learning outcomes and higher employment quality, to enhance competitiveness in the face of potential declines in total student numbers [28][12]. - The company is also exploring the potential for expanding its offerings, including the elevation of vocational schools to undergraduate status, in response to market demands [28][10]. Conclusion - New Higher Education Group is strategically positioned to enhance its educational offerings and financial performance while navigating the challenges of the private education sector. The focus on increasing undergraduate enrollment, improving employment outcomes, and managing financial health will be critical for its future success [2][8][12].

Employment and Talent Development - The Group has cultivated over 450,000 high-quality applied and technical talents for society as of February 28, 2025[11]. - The employment rate of graduates is among the highest in each province, with a high-quality employment rate continuously improving[11]. - The employment rate for the 2024 graduating class reached 98.03%, maintaining a high level for five consecutive years[27]. - The number of graduates employed in Fortune 500 companies and top national firms increased by 90% compared to the previous year[27]. - The Group established partnerships with 3,880 well-known enterprises, creating over 3,000 job positions in key industries[27]. - A new employment service center in the Sichuan-Chongqing region was added, forming a "four-center" system to enhance employment services[27]. - The final employment rate for 2024 graduates reached 98.03%, maintaining a high level for five consecutive years, while the proportion of graduates with high-quality employment reached 37.72%[30]. - The number of students employed by prestigious enterprises increased by 90% compared to the same period last year, with over 3,000 job opportunities created through partnerships with 3,880 well-known companies[30]. - The Group's schools ranked higher in the 2025 national rankings for private universities and vocational colleges[26]. - The Group is committed to building a student-oriented university with a century-long vision, focusing on career success and life fulfillment for every student[23]. Educational Achievements and Recognition - Three schools have achieved significant breakthroughs in educational levels, with Yunnan and Northeast schools approved for master's degree programs[26]. - Three schools achieved major breakthroughs in education levels, with Yunnan and Northeast Schools obtaining provincial-level approval for new master's degree units, and Guizhou School progressing towards becoming an undergraduate-level university[29]. - Students achieved a total of 222 national-level awards and 462 provincial-level awards in academic competitions, with a 100% increase in top awards compared to the previous year[36]. - The Group has been awarded the "Top 50 National Employment" by the Ministry of Education, with continuous improvement in high-quality employment rates[47]. Financial Performance - Total revenue for the six months ended February 28, 2025, was RMB 1,651.3 million, an increase of 11.4% compared to RMB 1,482.3 million for the same period in 2024[82]. - Revenue increased by 7.8% to RMB 1,412.9 million from RMB 1,310.8 million year-over-year[83]. - Gross profit rose by 4.4% to RMB 544.2 million, up from RMB 521.2 million in the previous year[83]. - Other income and gains significantly increased by 39.0% to RMB 238.4 million, compared to RMB 171.5 million in the prior period[83]. - Profit before tax grew by 12.2% to RMB 594.8 million, compared to RMB 530.0 million for the same period in 2024[83]. - Net profit for the six months ended February 28, 2025, was RMB 469.3 million, reflecting an 8.6% increase from RMB 432.0 million in 2024[83]. - Adjusted net profit increased by 7.0% to RMB 455.8 million from RMB 426.1 million year-over-year[83]. ESG and Sustainability Initiatives - The Group's ESG score was 37, ranking seventh globally and first in China in the diversified consumer goods industry, maintaining the highest score in China's education sector[33]. - Five schools were recognized as "Water-Saving Universities," and two schools were awarded "Green Campus" and "Green and Beautiful Campus" titles, reflecting the Group's commitment to sustainability[37]. - The Group's ESG risk score decreased to 16.7, placing it in the top 16% of 15,000 companies assessed globally[72]. Infrastructure and Investment - The Group is focusing on long-term development by enhancing campus infrastructure, faculty upgrading, and improving student learning outcomes[40]. - The Group has increased investment in teaching hardware, equipping classrooms with the latest smart blackboards and podiums to enhance teaching effectiveness[60]. - The Group invested RMB 11.37 million to improve campus network performance, achieving a 40% reduction in average latency and a 30% increase in transmission speed[62]. - Capital expenditures during the Reporting Period were RMB393.3 million, mainly for school building construction and facility purchases[119]. Governance and Compliance - The Group has complied with all applicable corporate governance code provisions during the Reporting Period[147]. - The Group did not declare an interim dividend for the six months ended February 28, 2025[156]. - The Group has not engaged in any off-balance sheet transactions as of the date of this report[136]. Shareholder Information - Mr. Li holds 772,070,025 shares, representing approximately 50.05% of the company[162]. - The total issued shares of the company as of February 28, 2025, is 1,542,734,630[173]. - IQ EQ Trustees (Singapore) Pte. Ltd. and Lendit Holdings Limited each hold 631,021,637 shares, accounting for 40.90% of the company[172]. - Elm Pacific Holdings Limited is a beneficial owner of 522,727,625 shares, which is 33.88% of the company[172]. - Sunnyland Ventures Limited holds 108,294,012 shares, representing 7.02% of the company[172]. Regulatory Environment - The provision of higher education in the PRC is classified under the "restricted" category according to the 2024 Negative List[188]. - The foreign portion of total investment in Sino-Foreign Joint Venture Private Schools must be below 50%[189]. - The establishment of Sino-Foreign Joint Venture Private Schools is subject to approval from education authorities at the provincial or national level[194]. - The revised Laws for Promoting Private Education of the PRC, effective from September 1, 2017, allow private school sponsors to choose between non-profit and for-profit models[196].

证券研究报告 新高教集团 (2001 HK) 基本面依然稳健，关注新校拓展 | 华泰研究 | | | 更新报告 | | --- | --- | --- | --- | | 2025 年 | 4 月 | 27 日│中国香港 | 高等教育 | 新高教集团公布 FY25H1 业绩：公司实现主营业务收入 14.13 亿元， yoy+7.8%，占我们全年预测的 54%，我们认为基本符合预期；经调整净利 润 4.56 亿元，yoy+7.0%，占我们全年预测的 57%，略超预期。上半年资本 开支 3.93 亿元，支出节奏符合全年指引（8-9 亿元）。公司旗下现有学校学 历提升申报工作稳步推进，并宣布将在海南合作筹办一所本科及以上学历层 次的高等教育机构，进一步扩大校网。我们认为公司在学历提升的转型期基 本面仍然保持稳健增长，高等学历教育收入和利润稳定性强，看好长期可持 续内生增长，维持"买入"评级。 招生竞争力持续增强，生源结构进一步优化 得益于持续的教学硬件、师资、就业质量投入，FY25H1 公司旗下院校排名 大幅提升，云南/甘肃/华中学校分别在校友会 2025 全国民办大学排行榜提 升 1/8/7 名，贵州/洛阳/郑州 ...

Financial Performance - The group achieved a revenue of RMB 1.413 billion for the six months ending February 28, 2025, representing a year-on-year growth of 7.8%[7]. - Adjusted net profit increased by 7.0% year-on-year to RMB 456 million for the same period[7]. - Total revenue for the six months ended February 28, 2025, was RMB 1,651.3 million, an increase of 11.4% compared to RMB 1,482.3 million for the same period in 2024[25]. - Income for the reporting period was RMB 1,412.9 million, up 7.8% from RMB 1,310.8 million year-on-year, driven by continuous high-quality development and growth in tuition and accommodation fees[26]. - Gross profit for the period was RMB 544.2 million, a 4.4% increase from RMB 521.2 million in the previous year, with a gross margin of 38.5%, down 1.3 percentage points from 39.8%[28]. - Other income and gains rose to RMB 238.4 million, a 39.0% increase from RMB 171.5 million, primarily due to enhanced school-enterprise cooperation and increased donations[29]. - Profit before tax increased by 12.2% to RMB 594.8 million from RMB 530.0 million in the previous year[34]. - Net profit for the period was RMB 469.3 million, an increase of 8.6% from RMB 432.0 million year-on-year[35]. - The group reported a net profit attributable to ordinary shareholders of RMB 469,287,000 for the six months ended February 28, 2025, compared to RMB 431,986,000 for the same period in 2024, representing an increase of approximately 8.6%[102]. - Total comprehensive income for the period was RMB 484,072,000, up 13.9% from RMB 424,950,000 year-over-year[80]. Student Outcomes and Employment - The final graduation employment rate for the 2024 cohort reached 98.03%, maintaining a high level for five consecutive years[4]. - The proportion of graduates with high-quality employment reached 37.72%, with a significant 90% increase in employment at Fortune 500 companies and A-share listed companies compared to the previous year[8]. - The group has delivered over 450,000 high-quality applied and technical skilled talents to society[5]. - The group is expanding its employment service centers to the Sichuan-Chongqing region, enhancing high-quality employment opportunities[9]. Educational Development and Infrastructure - The group has successfully completed the construction of three campuses in Guizhou, advancing to undergraduate level education[7]. - The group has expanded its student enrollment, with a total of approximately 139,000 students, and the proportion of undergraduate students has increased by 4 percentage points for the 2024/2025 academic year[18]. - The group has improved its campus environment, with new facilities such as upgraded libraries and smart gyms to support high-quality development[16]. - The group has seen a significant increase in the admission scores for its programs, with the lowest admission score for the dental program exceeding the provincial control line by 44 points[18]. - The group has completed the construction of its third campus in Guizhou and has received approval for new master's degree programs in Yunnan and Northeast campuses[21]. Teaching and Faculty Achievements - The group has achieved significant recognition in teaching competitions, with teachers winning 29 awards in national competitions, including 3 first prizes and 10 second prizes[14]. - The group has initiated professional construction reforms, establishing a teaching reform center to align with industry needs[11]. - The group has implemented a "Three Excellence" incentive plan to motivate teachers, enhancing teaching quality and student development[13]. - The group has achieved a 100% increase in the number of national-level awards won by students in key national competitions, totaling 222 awards[12]. Corporate Governance and ESG - The group has maintained a strong ESG performance, scoring 37 points in the S&P Global ESG rating for 2025, ranking first in China's education industry[19]. - The group aims to integrate ESG principles into its operations, ensuring stable financial performance and sustainable development[23]. - The group is committed to enhancing corporate governance to create more value for shareholders, with ongoing reviews and improvements to governance practices[70]. Financial Position and Investments - Total cash and cash equivalents as of February 28, 2025, were RMB 1,208.0 million, down from RMB 2,321.7 million as of August 31, 2024[39]. - Interest-bearing loans and other borrowings amounted to RMB 2,828.4 million, a decrease from RMB 3,504.8 million as of August 31, 2024, with the debt-to-total assets ratio declining from 31.8% to 28.0%[40]. - Capital expenditures for the reporting period were RMB 393.3 million, primarily for school campus construction and equipment purchases[42]. - The company believes it has sufficient financial resources to continue operating in the foreseeable future based on its cash flow and available funding sources[84]. Regulatory Environment and Compliance - The implementation of the 2021 Regulations on the Promotion of Private Education provides tax benefits for private schools, with non-profit institutions enjoying the same tax benefits as public schools[55]. - The company is monitoring any updates related to the Foreign Investment Law to ensure compliance with all relevant laws and regulations in China[64]. - The company’s operations have not yet been affected by the 2021 implementation regulations[61]. Shareholder Relations and Market Expansion - The board of directors has resolved not to declare interim dividends for the six-month period ending February 28, 2025[67]. - The company reported a profit of RMB 469,287,000 for the six months ending February 28, 2025, representing an increase of 8.3% compared to RMB 431,986,000 in the same period of 2024[80]. - A school operation cooperation agreement was signed on April 14, 2025, to establish a higher education institution in Hainan Free Trade Port, indicating future market expansion[75]. - The company is actively exploring potential mergers and acquisitions to strengthen its market position[121].

Investment and Development - The Group cumulatively invested RMB1.25 billion in the 2024 financial year to support major projects, including upgrading vocational schools to undergraduate universities and obtaining master's degree-granting rights[17]. - The Group plans to accelerate the application for master's programs at Yunnan and Northeast schools, and upgrade Luoyang and Guangxi schools to degree-granting institutions, laying a solid foundation for future high-quality development[49]. - The Group's capital expenditures for the year ended 31 August 2024 were RMB920.8 million, mainly for upgrading school facilities in Guizhou and constructing new buildings[146]. Student Enrollment and Satisfaction - The total number of students in the Group's schools for the 2024/2025 academic year was approximately 139,000, with the proportion of undergraduate students increasing by 1 percentage point[21]. - Student satisfaction rose to 86.4% due to significant improvements in the educational environment and student activities[18]. - The total number of students in the Group's schools for the 2024/2025 academic year is approximately 139,000, with an increase of 4 percentage points in the proportion of new undergraduate students and a 1 percentage point increase in the overall proportion of undergraduate students[68]. Employment Outcomes - The employment rate for the 2023 graduates reached 96.97%, maintaining a high level for four consecutive years, while the initial employment rate for the 2024 graduates improved by 4.4 percentage points to 95.09%[34]. - The Group engaged over 1,900 employers from renowned enterprises, providing more than 27,000 internships, with over 7,000 graduates from the class of 2024 employed by these enterprises[62]. - The Group's schools have been recognized for high-quality employment rates, with continuous improvement in employment outcomes[1]. Financial Performance - The Group achieved a 13.8% year-on-year increase in revenue from principal business to RMB 2.41 billion for the year ended 31 August 2024, and a 6.1% year-on-year increase in adjusted net profit to RMB 0.77 billion[53]. - The Group's total revenue for the year ended 31 August 2024 was RMB2,835.2 million, representing a 12.2% increase from RMB2,526.9 million in the previous year[100]. - The Group's net profit for the year ended August 31, 2024, was RMB 756.0 million, representing a 7.5% increase from RMB 703.3 million in the previous year[78]. Teaching Quality and Recognition - The investment in teachers increased by 12.1%, with 273 high-level experts and 15 renowned scholars introduced, and "Double-high" teachers increased by 73%[18]. - The "Excellent Course, Excellent Reward" incentive mechanism covers all 8 schools, with 40% of teachers receiving this reward, leading to a nearly 170% increase in awards won by teachers in provincial competitions[28]. - The number of awards won by teachers in provincial teaching competitions and skills competitions increased by nearly 170%, marking a historical breakthrough for the Group[60]. Strategic Focus and Future Outlook - The Group's strategic focus on enhancing financial performance and expanding market presence is evident in the reported figures and future outlook[124]. - The Group aims to create a student-centered university and cultivate high-quality applied and technical talents to meet local economic and social development needs[74]. - The Group plans to continue investing in high-quality development and enhancing teaching quality, supported by national policies[97]. Regulatory Environment and Compliance - The Group's existing private schools are currently undergoing classified registration as per provincial authorities' guidance, specifically in Northeast, Guangxi, Yunnan, and Guizhou provinces[191]. - The Group must clarify ownership of assets and settle finances if it opts for for-profit registration, as per the Implemental Rules on Private School Classified Registration[186]. - The Group will continue to monitor developments related to the application of regulatory requirements affecting its private schools[191]. Dividend Policy - The Group maintains its dividend policy for the fiscal year 2023/2024, suggesting that all dividends be distributed in the form of new shares instead of cash, aiming to retain cash for business development and avoid increasing the capital debt ratio[23]. - The Board has resolved to recommend a final dividend of RMB0.233 per Share for the year ended 31 August 2024, compared to RMB0.096 per Share for the year ended 31 August 2023[199]. - The proposed final dividend will be payable wholly in the form of Scrip Shares, allowing the Group to conserve cash for business development and operational needs[199].

Investment Rating - The report maintains a "Buy" rating for New Higher Education Group [6][15]. Core Views - New Higher Education Group reported FY24 revenue of RMB 2.4 billion, a year-on-year increase of 13.8%, with an adjusted net profit attributable to shareholders of RMB 770 million, up 6.1% year-on-year. The company distributed final dividends in shares, with a payout ratio of 50% [6][12]. - The company continues to optimize its student structure, with a slight decrease in total enrollment to 139,000 from 140,000 in FY23. However, the proportion of new undergraduate students increased by 4 percentage points year-on-year, and the proportion of undergraduate students rose by 1 percentage point year-on-year, leading to a 13.2% increase in tuition revenue despite the slight decline in total enrollment [6][13]. - The company has increased its investment in educational facilities, resulting in a 19.1% rise in accommodation fees, contributing to the overall revenue growth [6][13]. Financial Data and Profit Forecast - For FY24, the company's revenue cost was RMB 1.54 billion, a year-on-year increase of 16.9%. Teaching-related costs rose by 31.3%, and teacher salaries increased by 12.1% [7][14]. - The report indicates that the company will maintain capital expenditures at approximately RMB 600 million to RMB 800 million annually over the next two years due to ongoing evaluations of two undergraduate schools [7][15]. - Profit forecasts for FY25 and FY26 have been downgraded to RMB 800 million and RMB 830 million, respectively, with a new profit forecast of RMB 880 million for FY27. The target price has been adjusted to HKD 2.99 from HKD 3.46 [7][15]. Revenue and Profit Projections - The projected revenue and profit figures for the upcoming years are as follows: - FY24 Revenue: RMB 2,412 million (10% growth) - FY25 Revenue: RMB 2,617 million (estimated) - FY26 Revenue: RMB 2,844 million (estimated) - FY27 Revenue: RMB 3,119 million (estimated) - FY24 Net Profit: RMB 756 million (estimated) - FY25 Net Profit: RMB 801 million (estimated) - FY26 Net Profit: RMB 831 million (estimated) - FY27 Net Profit: RMB 881 million (estimated) [9][17].

Financial Performance - The group reported a revenue increase of 13.8% year-on-year to RMB 2.41 billion for the fiscal year ending August 31, 2024[5]. - Adjusted net profit grew by 6.1% year-on-year to RMB 770 million for the same period[5]. - Total revenue for the year ended August 31, 2024, was RMB 2,835.2 million, an increase of 12.2% compared to RMB 2,526.9 million for the same period last year[34]. - The group's income reached RMB 2,411.7 million, up 13.8% from RMB 2,119.1 million year-on-year, driven by the advantages of group-based education and steady growth in tuition and accommodation fees[36]. - Gross profit amounted to RMB 876.1 million, a rise of 8.7% from RMB 806.0 million, with a gross margin of 36.3%, down 1.7 percentage points from 38.0% due to increased investments in teaching quality[38]. - Profit before tax was RMB 913.0 million, reflecting a 7.9% increase from RMB 845.9 million in the previous year[45]. - Net profit for the year was RMB 756.0 million, up 7.5% from RMB 703.3 million year-on-year[47]. - Other income and gains were RMB 423.5 million, an increase of 3.8% from RMB 407.8 million, driven by growth in vocational training services and rental income[39]. - Basic and diluted earnings per share rose to RMB 0.49, up from RMB 0.45 in the previous year[114]. Employment and Student Outcomes - The employment rate for the 2023 graduating class reached 96.97%, maintaining a rate above 95% for four consecutive years[3]. - The initial employment rate for the 2024 graduating class improved by 4.4 percentage points year-on-year to 95.09%[3]. - The proportion of high-quality employment among graduates reached 33.21%, with a 62% increase in employment at prestigious companies[3]. - The group organized 22 employment training sessions in the past year, covering workplace etiquette, resume enhancement, and interview skills[19]. - The group has received multiple employment-related awards, totaling 444 in the past three years, indicating strong performance in job placement[19]. - The group has increased its employment funding and support for frontline staff, enhancing the quality of employment services provided[19]. Educational Quality and Development - The group plans to continue its investment in educational quality and infrastructure, particularly in Guizhou province, where a new university is being established[5]. - The number of high-level teachers (dual-high) increased by 73% year-on-year, enhancing the quality of education[10]. - The group introduced 29 provincial first-class undergraduate courses, with 7 courses rated as national first-class[15]. - The group aims to enhance its competitive edge by focusing on high-quality development and improving student outcomes and experiences[9]. - The group aims to create a student-centered university and enhance educational quality, aligning with national policies for high-quality development[30]. Financial Position and Capital Management - Total cash and cash equivalents as of August 31, 2024, amounted to RMB 2,321.7 million, an increase of 102.5% from RMB 1,148.6 million in 2023[51]. - Interest-bearing bank loans and other borrowings increased to RMB 3,504.8 million as of August 31, 2024, compared to RMB 2,718.3 million in 2023, reflecting a rise of 28.9%[52]. - The ratio of interest-bearing debt to total assets rose from 29.4% in 2023 to 31.8% in 2024, indicating increased leverage[52]. - Capital expenditures for the year ended August 31, 2024, were RMB 920.8 million, primarily for upgrading school facilities in Guizhou and other infrastructure projects[55]. - The total capital commitments as of August 31, 2024, were RMB 567.9 million, up from RMB 318.0 million in 2023, showing a significant increase of 78.5%[56]. - The leverage ratio increased from 76.9% in 2023 to 85.2% in 2024, primarily due to the rise in interest-bearing debt[53]. Regulatory Environment and Strategic Plans - The company plans to continue benefiting from favorable policies in vocational education, which are expected to enhance its operational environment[66]. - The new Vocational Education Law, effective from May 1, 2022, emphasizes the equal importance of vocational education and general education, encouraging social participation and enterprise involvement in vocational training[68]. - The government work report in March 2023 highlighted significant improvements in vocational education adaptability and continuous enhancement of vocational school conditions[71]. - The implementation plan for 2023-2025 focuses on coordinating education and industry development, creating platforms for industry-education integration, and improving incentive policies[71]. - The Ministry of Education's notification in July 2023 outlines 11 key tasks to accelerate the construction of a modern vocational education system, promoting high-quality development[72]. Corporate Governance and Shareholder Relations - The company has committed to improving corporate governance practices to enhance transparency and accountability to shareholders[100]. - The proposed final dividend for the year ending August 31, 2024, is RMB 0.233 per share, an increase from RMB 0.096 for the year ending August 31, 2023[92]. - The company will implement a scrip dividend scheme, pending approval from shareholders at the annual general meeting on February 13, 2025[94]. - The final dividend shares are expected to be distributed to eligible shareholders around April 17, 2025[95]. - The company has maintained good labor relations without any significant labor disputes during the reporting period[99]. Company Structure and Operations - The company operates multiple educational institutions, including Northeast School and Luoyang School, which are integral to its business model[195][191]. - The company has a comprehensive network of affiliated entities, including Yunnan School, Guizhou School, and others, under its operational structure[199]. - The company is advised on Chinese law by Tongshang Law Firm, ensuring compliance with local regulations[198]. - The company is focused on expanding its educational offerings and enhancing its operational capabilities across various regions in China[197]. - The company’s founder, Mr. Li, serves as the chairman and executive director, playing a crucial role in strategic decision-making[194].

Financial Performance - For the six months ended February 29, 2024, the Group achieved a 13.8% year-on-year increase in revenue from its principal business[10]. - Total revenue for the six months ended February 29, 2024, was RMB 1,482.3 million, an increase of 12.2% from RMB 1,321.3 million for the same period in 2023[55]. - Revenue increased to RMB 1,310.8 million, up 13.8% from RMB 1,152.2 million year-on-year, driven by the group's continuous high-quality development and steady growth in tuition and accommodation fees[56]. - Gross profit for the period was RMB 521.2 million, representing a 15.1% increase from RMB 452.7 million in the previous year, with a gross margin of 39.8% compared to 39.3% in the prior year[58]. - Adjusted net profit attributable to owners of the parent for the six months ended February 29, 2024, was RMB 426.1 million, a 7.6% increase from RMB 396.0 million for the same period in 2023[55]. - Profit before tax increased to RMB 530.0 million, representing a 14.7% increase from RMB 462.1 million year-on-year[68]. - Net profit increased by 10.6% to RMB 432.0 million, compared to RMB 390.5 million for the same period last year[68]. - Basic and diluted earnings per share for the period were RMB 0.28, compared to RMB 0.25 for the same period last year, indicating a 12% increase[172]. - Total comprehensive income for the period was RMB 424,950,000, up from RMB 386,838,000, marking a 9.8% increase year-over-year[174]. Employment and Talent Development - The employment rate of the Group's schools is among the highest in each province and region, with continuous improvement in high-quality employment rates[6]. - The overall employment rate of the Group's 2023 graduates is 96.97%, with high-quality employment proportion reaching 27.76%, an increase of 5.8 percentage points year-on-year[16]. - The number of graduates employed in Fortune Global 500, China's Top 100, and A-share listed companies increased by 88.06%[17]. - The Group has cumulatively cultivated over 400,000 high-quality technical talents for society as of February 29, 2024[6]. - The Group has established strategic partnerships with 1,156 well-known companies and built 54 modern industrial colleges[12]. - The number of students reaching the score line in the postgraduate entrance examination increased by 31.5% compared to last year[14]. - The Group has added 7 undergraduate majors urgently needed for national strategic and local regional development, including a dentistry program, with only five institutions nationwide approved to offer it[12]. Educational Quality and Initiatives - The Group focuses on building a student-oriented university and adheres to the philosophy of "teaching students in accordance with their aptitude" to enhance educational quality[10]. - The Group has been dedicated to higher vocational education for over 25 years, emphasizing practical application in its educational approach[10]. - The "Wonderful Classroom" competition has been successfully held for 15 consecutive years, promoting quality improvement in teaching[12]. - The proportion of students with high satisfaction reached 84%, an increase of 12 percentage points compared to the previous year[19]. - Complaints on the student and teacher opinion management platform have dropped by 39%, while praise opinions increased from 3% to 16%[19]. - The Group aims to create high-quality teaching, employment, experience, and campus environments for students[22]. Financial Management and Investments - The Group has invested RMB 281 million to enhance the educational environment, including upgrading teaching facilities and beautifying the campus[18]. - Investment in teachers increased by 10.5% year-on-year, with the number of "dual-qualified" teachers and "double-high" teachers rising by 19% and 25%, respectively[12]. - The group’s administrative expenses rose to RMB 53.3 million, an increase of 18.7% from RMB 44.9 million in the previous year[55]. - The cost of sales increased to RMB 789.6 million, up 12.9% from RMB 699.5 million year-on-year, primarily due to campus upgrades and increased personnel costs[57]. - Capital expenditures during the reporting period were RMB 397.3 million, mainly for the construction of school buildings and facilities, land acquisition, and purchase of furniture and equipment[78]. Corporate Governance and Compliance - The Group has complied with all applicable code provisions set out in the Corporate Governance Code during the reporting period[92]. - The Board will continue to review and improve corporate governance practices to optimize returns for shareholders[92]. - The Group emphasizes effective corporate governance as essential for creating shareholder value[92]. - The Group is committed to integrating ESG principles into its operations, focusing on stable performance growth and sustainable development[55]. - The Group has been awarded the "Best ESG Information Disclosure Award" in the 8th Zhitong Finance Listed Company Selection in 2023[21]. Shareholder Information and Dividends - The Group will maintain a dividend payout ratio of 50% for this financial year[10]. - The Group has resolved not to declare an interim dividend for the six months ended 29 February 2024, planning to pay dividends once a year instead[92]. - The company has a dividend policy aiming to recommend an annual dividend of not less than 30% of the profits available for distribution earned in each financial year[163]. - The board will continue to review the dividend policy but there is no assurance that dividends will be paid in any specific amount or at all[163]. Regulatory Environment - The provision of higher education in the PRC falls within the "restricted" category according to the Negative List, requiring foreign investors to cooperate with PRC educational institutions[127]. - The foreign portion of total investment in a Sino-Foreign Joint Venture Private School must be below 50% as per the Implementation Opinions[127]. - The establishment of these schools requires approval from provincial or national education authorities[130]. - The company is still awaiting approval from the BPPE to establish a new school in California[131]. - The Group's operations have not been affected by the 2021 Implementation Rules as of the report date[138].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 4.85 [4][9]. Core Insights - The company reported a robust performance with a 13.8% year-on-year increase in revenue to RMB 1.31 billion for the first half of FY2024, driven primarily by tuition fee growth [2]. - The gross profit margin remained stable at 39.8%, reflecting a slight increase of 0.5 percentage points year-on-year, supported by an optimized cost structure [2][3]. - The company has strengthened its educational offerings by adding new undergraduate programs and enhancing partnerships with over 1,156 well-known enterprises [2]. Financial Performance Summary - Revenue for FY2024 is projected to reach RMB 2.366 billion, representing a growth rate of 11.6% [5]. - Net profit is expected to increase by 16.6% to RMB 819 million, with a net profit margin of 34.6% [4][5]. - The company has effectively controlled operational costs, with selling expenses at RMB 22 million and administrative expenses rising to RMB 53 million due to external consultancy fees [3]. Valuation Metrics - The current valuation stands at approximately 3.7x and 3.3x FY24E and FY25E P/E ratios, respectively, with a dividend yield of around 15.0% [4]. - The report highlights a projected dividend payout ratio of 50%, despite a change in the dividend policy to only pay a final dividend [4]. Future Outlook - The company is expected to continue its growth trajectory with a focus on improving educational quality and employment rates for graduates, while maintaining stable revenue streams [4]. - The financial forecasts indicate a steady increase in earnings per share, projected to reach RMB 0.526 in FY2024, with continued growth in subsequent years [5].