Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [4]. Core Insights - The company achieved a revenue of 1.102 billion, representing a year-on-year increase of 125.2%, and a net profit of 192 million, up 114%, indicating strong performance in its core business and significant results from its quality transformation [1]. - In 2024, the company made a historic breakthrough in the quality education sector, generating 710 million in revenue, which accounted for 64.7% of total revenue and showed a remarkable growth of 411.7% year-on-year [1]. - The company is advancing its "All in AI" strategy, enhancing its educational systems with AI technology to improve teaching efficiency and personalize learning paths for students [2][3]. Financial Performance - The company reported a gross profit margin of 46.3% and a bank deposit balance of 1.12 billion, which is a 124% increase year-on-year. Contract liabilities reached 600 million, up 184% year-on-year, reflecting strong demand for quality education services [1]. - The adjusted profit forecasts for 2025-2027 are 3.14 billion, 3.97 billion, and 5.06 billion respectively, with earnings per share (EPS) projected at 0.37, 0.47, and 0.6 [4].

Financial Performance - Total revenue for the year ended December 31, 2024, reached RMB 1,102,001 thousand, representing a 125.2% increase compared to RMB 489,314 thousand in 2023[3] - Gross profit for the same period was RMB 510,118 thousand, up 121.9% from RMB 229,858 thousand in 2023[3] - Net profit increased to RMB 192,339 thousand, a growth of 114.0% from RMB 89,880 thousand in the previous year[3] - Adjusted net profit for 2024 was RMB 192,787 thousand, reflecting a 116.1% increase from RMB 89,225 thousand in 2023[3] - Basic earnings per share for 2024 were RMB 25.61 cents, compared to RMB 12.12 cents in 2023[5] - The company reported a net profit of RMB 192,451,000 for the year ending December 31, 2024, compared to RMB 91,246,000 for the previous year, representing an increase of 111.1%[44] - Basic earnings per share for 2024 were RMB 0.2561, up from RMB 0.1212 in 2023, reflecting a growth of 111.6%[44] - Adjusted net profit increased by 116.1% from approximately RMB 89.2 million in 2023 to approximately RMB 192.8 million in the reporting period[100] Assets and Liabilities - Non-current assets totaled RMB 956,696 thousand as of December 31, 2024, compared to RMB 534,264 thousand in 2023[6] - Current assets increased to RMB 880,712 thousand in 2024, up from RMB 512,112 thousand in 2023[6] - Total liabilities for 2024 were RMB 968,752 thousand, significantly higher than RMB 410,948 thousand in 2023[8] - Net assets rose to RMB 653,709 thousand in 2024, compared to RMB 496,435 thousand in the previous year[8] - The company reported a significant increase in cash and cash equivalents, reaching RMB 512,011 thousand in 2024, up from RMB 281,928 thousand in 2023[6] - As of December 31, 2024, the group recorded net current liabilities of RMB 88,040,000, compared to net current assets of RMB 101,164,000 in 2023[11] - The current ratio decreased to approximately 0.91 from 1.25 in 2023, primarily due to an increase in contract liabilities[106] - The leverage ratio increased to 0.64 from 0.53 in 2023[106] Revenue Breakdown - Revenue from quality education surged to RMB 713,434 thousand in 2024, compared to RMB 139,412 thousand in 2023, marking an increase of about 411.5%[32] - The revenue from tutoring projects increased to RMB 181,443 thousand in 2024, up from RMB 144,918 thousand in 2023, reflecting a growth of approximately 25.1%[32] - The revenue recognition for services transferred over time amounted to RMB 1,101,638 thousand for the year ending December 31, 2024, demonstrating the company's effective service delivery model[23] - The company reported that 99% of its total revenue is generated from subsidiaries located in mainland China, indicating a strong regional focus[33] Expenses and Costs - The total employee costs for the year were RMB 519,625,000, significantly higher than RMB 177,150,000 in 2023, indicating a growth of 194.4%[41] - Selling expenses rose to approximately RMB 76.0 million, a 191.4% increase from RMB 26.1 million in 2023, mainly due to higher recruitment costs associated with business expansion[89] - Administrative expenses increased to approximately RMB 140.3 million, up 142.3% from RMB 57.9 million in 2023, driven by higher salaries and office costs due to business growth[90] - The company recognized impairment losses of RMB 7,411,000 for the year 2024, compared to RMB 5,526,000 in 2023, marking an increase of 34.2%[36] - The deferred tax expense for 2024 was RMB 4,372,000, compared to RMB 663,000 in 2023, showing a significant increase[36] - The company’s income tax expense for 2024 was RMB 56,134,000, compared to RMB 22,881,000 in 2023, representing an increase of 145.5%[36] Corporate Governance and Compliance - The company has adopted the corporate governance code and has complied with the relevant provisions during the reporting period, except for the separation of the roles of Chairman and CEO[124] - Following the appointment of Mr. Shen Haipeng as an independent non-executive director on October 16, 2024, the company has regained compliance with the listing rules regarding the composition of the board[127] - The audit committee, which includes Mr. Gan Jun as chairman, has reviewed the consolidated financial statements and confirmed compliance with applicable accounting standards and requirements[132] Shareholder and Dividend Information - The company plans to distribute a dividend of RMB 0.114 per share for the fiscal years 2024, 2025, and 2026, totaling RMB 96,226,000, subject to shareholder approval[42] - The board has proposed a final dividend of HKD 12.3 cents per share for the year ending December 31, 2024, representing 50.0% of the annual profit and total comprehensive income, totaling approximately RMB 96.2 million[119] - The company announced a final dividend of HKD 0.035 per share for the year ending December 31, 2023, which was approved by shareholders[71] Strategic Initiatives and Market Position - The company has maintained a strong market position in the education technology sector, recognized for its "Excellent Education" brand and various awards in 2024, enhancing its reputation and attracting more students[55] - The company has embraced technology and artificial intelligence to improve product quality and service delivery, aiming for a transformation towards high-quality development[53] - The company is actively implementing an RSU plan for core management and technical personnel to align long-term development with employee interests, aiming to boost operational efficiency and profitability[69] - The company is focusing on AI applications in education, planning to launch personalized recommendations based on AI data analysis and capability modeling[76] - The company has successfully transformed multiple products under the guidance of education authorities, achieving recognition for its compliance and quality in education services[72] - The company has engaged in various community support activities, including donations to schools and mental health services, demonstrating its commitment to social responsibility[74] Employee and Internal Relations - The total number of employees increased to 3,072 as of December 31, 2024, up from 846 in 2023[118] - The company has established multiple communication mechanisms to enhance employee engagement and promote a harmonious internal environment[68] - The company has been recognized for its outstanding employer brand, receiving several accolades for its talent strategy and AI application[69] - The company is committed to continuous improvement in teaching quality through competitions and training programs for its educators[68] Future Outlook and Compliance with IFRS - The group has adopted revised International Financial Reporting Standards (IFRS) effective from January 1, 2024, which include clarifications on classifying liabilities as current or non-current[14] - The application of the revised IFRS did not have a significant impact on the group's financial position or performance for the current and prior years[14] - The company is currently evaluating the detailed impact of the new International Financial Reporting Standards (IFRS) on its consolidated financial statements, which are expected to affect the presentation of the income statement and future disclosures[21] - The company anticipates that the application of the new IFRS will influence the presentation of the income statement and future financial statement disclosures starting from January 1, 2027[21]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [5]. Core Insights - The company is expected to achieve a revenue of 1.05 to 1.15 billion RMB in 2024, representing a year-on-year growth of 114.5% to 135%. The net profit is projected to be between 180 to 200 million RMB, indicating a growth of 100.3% to 122.5% [1]. - The company has successfully transformed its educational offerings, focusing on quality and the integration of AI technology to enhance both product and service quality [2][3]. - The introduction of various innovative educational programs has significantly increased enrollment and class hours compared to the previous year, reflecting strong market acceptance [1][3]. Financial Projections - The adjusted revenue forecasts for 2024 to 2026 are 1.1 billion RMB, 2 billion RMB, and 2.55 billion RMB respectively, with previous estimates being lower [4]. - The net profit estimates for the same period are revised to 190 million RMB, 320 million RMB, and 430 million RMB, also higher than previous projections [4]. - The earnings per share (EPS) are expected to be 0.23 RMB, 0.38 RMB, and 0.51 RMB for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings (PE) ratios of 14x, 8x, and 6x [4].

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [5] Core Insights - The company is expected to achieve a revenue of 1.05 to 1.15 billion RMB in 2024, representing a year-on-year growth of 114.5% to 135% [1] - Net profit is projected to be between 180 to 200 million RMB, indicating a year-on-year increase of 100.3% to 122.5% [1] - The company has successfully transformed its educational offerings, focusing on quality and the integration of AI technology to enhance both product and service quality [1][2] Summary by Sections Financial Performance - The company has adjusted its revenue forecasts for 2024 to 1.1 billion RMB, with subsequent years projected at 2 billion RMB for 2025 and 2.55 billion RMB for 2026 [4] - Adjusted net profit estimates are 190 million RMB for 2024, 320 million RMB for 2025, and 430 million RMB for 2026 [4] - Earnings per share (EPS) are forecasted at 0.23 RMB, 0.38 RMB, and 0.51 RMB for 2024, 2025, and 2026 respectively [4] Educational Transformation - The company has launched nine core competency products, which have been recognized by educational authorities in Guangdong Province [3] - The "Six Forces Model" has been introduced to enhance student development, focusing on learning, critical thinking, aesthetic appreciation, creativity, communication, and health [3] - The "Kunpeng Youth Growth Camp" project employs advanced teaching methods to engage students and has received positive feedback from the community [3] AI Integration - The company is exploring AI applications in education, enhancing teaching quality and operational efficiency through tools like the upgraded "Qingjiao Assistant" [2] - The integration of AI is aimed at improving management processes across various operational areas, including human resources and financial management [2]

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The upgraded "Qingjiao Assistant" application integrates Deepseek R1, significantly enhancing lesson preparation efficiency and teaching quality, allowing teachers to focus more on students' emotional and developmental needs [1][2] - The company is committed to exploring AI applications in education, leveraging offline education's unique advantages to improve service quality and operational efficiency [3] - The introduction of AI tools is expected to create a competitive advantage for leading institutions while posing challenges for smaller entities, potentially reshaping the educational landscape [3] Financial Projections - Revenue forecasts for 2024, 2025, and 2026 are projected at 880 million RMB, 1.53 billion RMB, and 1.83 billion RMB respectively, with adjusted net profits of 180 million RMB, 280 million RMB, and 340 million RMB [4] - Earnings per share (EPS) are expected to be 0.21 RMB, 0.33 RMB, and 0.40 RMB for the same years, corresponding to price-to-earnings (PE) ratios of 17x, 11x, and 9x [4] - The current stock price is 3.53 HKD, with a total market capitalization of approximately 2.99 billion HKD [4]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [7]. Core Insights - The company has announced a dividend plan to gradually increase the payout ratio to 50%, 60%, and 70% of the net profit attributable to shareholders over the next three fiscal years [1]. - The board believes that the dividend plan aligns with the best interests of the company and its shareholders, responding to market demands and protecting investor rights while maintaining financial health for sustainable development [1]. - The company plans to buy back 103,000 shares as part of its restricted stock unit plan, indicating confidence in its business outlook and addressing undervaluation concerns [2]. - The expected increase in dividends is anticipated to enhance investor benefits and boost confidence, especially given the attractive dividend yield in a low valuation environment [3]. - The company has launched a new youth programming education brand, i01, aimed at aligning with new educational standards and fostering talent in technology and innovation [4]. Financial Projections - The company forecasts revenues of 800 million RMB, 1.53 billion RMB, and 1.83 billion RMB for the fiscal years 2024 to 2026, respectively [5]. - Adjusted net profits are projected to be 180 million RMB, 280 million RMB, and 340 million RMB for the same periods [5]. - Earnings per share (EPS) are expected to be 0.21 RMB, 0.33 RMB, and 0.40 RMB for 2024, 2025, and 2026, respectively, with price-to-earnings (PE) ratios of 17x, 11x, and 9x [5].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 5.60, indicating a potential upside of 94.4% from the current price of HKD 2.88 [1]. Core Insights - The company has shown strong revenue growth driven by quality education services, with total revenue for FY24H1 reaching HKD 3.17 billion, a year-on-year increase of 68.1% [1]. - The adjusted net profit for FY24H1 was HKD 0.54 billion, reflecting a significant increase of 168.9% year-on-year [1]. - The company's contract liabilities have increased by 183.8% year-on-year, providing a solid foundation for future financial performance [1]. - The quality education segment has become the main growth engine, contributing HKD 1.23 billion in revenue, a growth of 31.9% year-on-year [1]. - The company has doubled its employee count to 1,785, supporting its rapid growth [1]. Financial Performance Overview - For FY24H1, the company reported a gross profit margin of 44.96%, an increase of 8.0 percentage points year-on-year [1]. - The operating profit margin improved significantly, with net profit margin rising to 23.4% from 17.2% year-on-year [1]. - The company expects revenue to reach HKD 10.91 billion in FY24, with a year-on-year growth of 123% [1]. - Forecasted net profit for FY24 is projected at HKD 185.2 million, with continued growth expected in subsequent years [2]. Business Strategy and Development - The company is actively optimizing its quality education courses and has successfully obtained non-profit school operation licenses in Guangzhou [1]. - New non-academic products have been launched, including "Fun Little Reporter" and "Literary Aesthetics," aligning with educational policies [1]. - The company is focused on compliance and transformation in response to regulatory changes, aiming to return to normal operational development [1]. Market Position and Outlook - The company is positioned as a leader in the education and training industry in South China, with expectations of continued market share growth [1]. - The report anticipates that the company will gradually return to a normal growth trajectory, supported by its strategic initiatives and market demand [1].

Financial Performance - Revenue for the first half of 2024 reached RMB 317.4 million, representing a 68.1% increase compared to RMB 188.9 million in the same period of 2023[7] - Gross profit for the first half of 2024 was RMB 142.7 million, up 104.5% from RMB 69.8 million in the first half of 2023[7] - Net profit for the first half of 2024 increased to RMB 54.4 million, a significant rise of 170.0% from RMB 20.2 million in the same period last year[7] - Adjusted net profit for the first half of 2024 was RMB 54.4 million, reflecting a 168.9% increase compared to RMB 20.2 million in the first half of 2023[7] - Total revenue increased by 68.1% from approximately RMB 188.9 million in the first half of 2023 to approximately RMB 317.4 million in the reporting period, primarily driven by the growth in quality education services[24] - Gross profit rose by 104.5% from approximately RMB 69.8 million in the first half of 2023 to approximately RMB 142.7 million, with gross margin increasing from 36.9% to 45.0%[26] - Profit for the reporting period increased by 170.0% from approximately RMB 20.2 million in the first half of 2023 to approximately RMB 54.4 million[34] - Basic earnings per share increased to RMB 7.25 from RMB 2.78, reflecting a significant growth in profitability[72] Contract Liabilities and Assets - The company achieved a contract liability of approximately RMB 458.4 million, which is a 116.5% increase year-on-year[8] - Contract liabilities increased by 116.5% to approximately RMB 458.4 million as of June 30, 2024, compared to RMB 211.8 million on December 31, 2023, primarily due to business growth[38] - The group held financial assets including debt investments of approximately RMB 70.9 million and equity investments of approximately RMB 33.3 million as of June 30, 2024[41] - The total carrying value of the group's interests in joint ventures was RMB 8,886,000, slightly up from RMB 8,871,000[108] - The total assets were RMB 137,914,000, up from RMB 115,753,000, reflecting a growth of approximately 19.1%[115] Employee and Management Initiatives - The company implemented employee incentives through equity incentives to boost staff motivation and engagement[8] - The proportion of employees from prestigious universities significantly increased due to the company's recruitment efforts, including a mentorship program for new hires[15] - The company granted restricted stock units to several employees on April 30, 2024, enhancing employee loyalty and motivation, promoting shared growth and long-term development[15] - Total employee costs for the period amounted to RMB 131,738,000, up from RMB 95,219,000, indicating a rise of 38.3%[92] - The total compensation for directors and key management personnel for the six months ended June 30, 2024, was RMB 5,438,000, compared to RMB 4,025,000 for the same period in 2023, representing an increase of approximately 35.2%[133] Compliance and Governance - The company maintained compliance with regulatory requirements while achieving significant growth in the first half of 2024[8] - The audit committee has reviewed the interim financial information and confirmed compliance with applicable accounting standards[55] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules[51] - The company is committed to compliance and will optimize course content to meet national education policies while ensuring high-quality teaching resources[17] Strategic Initiatives and Market Focus - The launch of the "Kunpeng Youth Growth Camp Project" marked a successful transition to quality education, gaining recognition from parents and students[8] - The company actively embraced AI technology to enhance organizational efficiency for students, teachers, and management teams[8] - The company aims to deepen quality education by developing diverse and interactive courses that align with national expectations and enhance students' core competencies[18] - The company plans to focus on the Greater Bay Area, particularly Shenzhen and Foshan, to meet the growing demand for quality education services driven by economic development and rising parental investment[19] Financial Position and Cash Flow - Cash and cash equivalents as of June 30, 2024, amounted to approximately RMB 495.7 million[37] - Current ratio decreased to approximately 1.09 as of June 30, 2024, down from 1.25 on December 31, 2023[39] - The company’s cash and cash equivalents significantly increased to RMB 495,735 thousand from RMB 281,928 thousand, reflecting a growth of approximately 75.9%[73] - The net cash generated from operating activities for the six months ended June 30, 2024, was RMB 328,545 thousand, compared to RMB 84,059 thousand for the same period in 2023, reflecting a significant increase of approximately 290.5%[76] Shareholder Information - As of June 30, 2024, the company has a total of 847,221,000 shares issued[60] - Major shareholders include JTC Trustees (BVI) Limited holding 53.93% of the issued shares, and Elite Education Investment Co. Ltd. with 20.20%[62] - The company has retained 27,292,396 existing shares under the restricted share unit plan, with an additional 43,540,000 shares to be issued[64] - The company has no controlling shareholder or ultimate controller as of June 30, 2024, due to the absence of shareholders with majority voting rights[78] Investment and Acquisitions - The company is actively pursuing a license for non-subject profit-making education in Guangzhou, enhancing business sustainability[9] - The group has developed a complete learning system for programming education, covering hardware and software from robotics to Python and C++[12] - The company has entered into a series of agreements to change the registered shareholders of its subsidiary, enhancing internal control and operational efficiency[66] Impairment and Losses - The group recorded a fair value loss of approximately RMB 84.9 million related to financial assets due to ongoing litigation with Minsheng Trust[45] - The group confirmed a net impairment loss of approximately RMB 35.6 million related to overdue investments with Zhongcheng Construction Group[46] - The company recognized a net impairment loss of RMB (530,000) under the expected credit loss model, a decrease from RMB 5,580,000 in the previous year[72] Fair Value Measurements - The fair value of financial assets measured at fair value through profit or loss as of June 30, 2024, totaled RMB 71,866,000, with RMB 25,892,000 from listed equity investments and RMB 45,974,000 from debt instruments[136] - The company closely collaborates with qualified external valuers to establish applicable valuation techniques and input data for fair value assessments[134]

Investment Rating - The report initiates coverage with an "Accumulate" rating for the company [1] Core Views - In the first half of 2024, the company achieved revenue of 317 million RMB, representing a year-on-year growth of 68.1%, and a net profit attributable to shareholders of 55 million RMB, up 160.7% year-on-year [1] - The company has made significant progress in its transformation towards quality education, with contract liabilities increasing by 116.5% year-on-year to 458 million RMB, indicating strong revenue conversion potential for the full year [1] - The company is enhancing organizational efficiency through AI investments, resulting in a management expense ratio of 12.9%, a decrease of 2.26 percentage points year-on-year [1] - A stock incentive plan was implemented, granting 58 million restricted shares to 552 employees, which is expected to boost employee engagement and long-term company growth [1] - Revenue forecasts for 2024-2026 are projected at 1.01 billion RMB, 1.80 billion RMB, and 2.50 billion RMB, with net profits of 176 million RMB, 278 million RMB, and 374 million RMB respectively, indicating a strong growth trajectory [1] Financial Summary - For 2024E, total revenue is expected to reach 1,015 million RMB, with a growth rate of 107.4% compared to 2023A [4] - The net profit attributable to shareholders is projected to be 176 million RMB in 2024E, reflecting a growth rate of 92.5% [4] - The company's total assets are forecasted to increase from 1,046 million RMB in 2023A to 1,259 million RMB in 2024E [5]

股 票 研 究 证 券 研 究 报 告 利润端超预期，关注旺季数据兑现 卓越教育集团(3978) [Table_Industry] 教育产业 [Table_Invest] 评级： 增持 ——卓越教育集团 24H1 业绩点评 | --- | --- | --- | |----------|-------------------------------------|------------------------------| | | | | | | [table_Authors] 刘越男 ( 分析师 ) | 庄子童 ( 分析师 ) | | | 021-38677706 | 021-38032683 | | | liuyuenan@gtjas.com | zhuangzitong026312@gtjas.com | | 登记编号 | S0880516030003 | S0880524070002 | 本报告导读： 收入端符合预期，利润端超预期，竞争格局改善下龙头仍有望受益，合同负债高速 增长为 24H2 业绩提供保障，关注旺季业绩兑现情况。 投资要点： [Table_Summary] 投资建议：考虑到竞争格局改善 ...