Core Viewpoint - China Oriental Education reported a slight beat on market expectations for adjusted net profit in 1H2025, driven by effective cost and expense management [1][2] Financial Performance - Revenue for 1H2025 reached 2.19 billion yuan, a year-on-year increase of 10.2%, in line with market expectations [1] - Adjusted net profit grew by 49.5% year-on-year to 416 million yuan, slightly above market expectations [1] - Overall gross margin improved to 57.3%, up 4.3 percentage points year-on-year, with all five business segments showing improvement [2] - Adjusted net profit margin reached 19.0%, an increase of 5.0 percentage points year-on-year, attributed to effective cost control [2] Enrollment Trends - New student enrollment increased by 7.1% year-on-year in 1H2025, with average training sessions up by 5.5% [1] - The number of schools increased by one compared to the end of the previous year [1] - Specific segment performance included: - Culinary Arts: Revenue up 11.4%, new enrollment up 5.2% - Western Pastry and Cuisine: Revenue up 14.3%, new enrollment up 0.7% - Information Technology: Revenue down 3.0%, new enrollment up 6.4% - Automotive Services: Revenue up 9.6%, new enrollment up 9.3% - Fashion Beauty: Revenue up 90.2%, new enrollment up 34.1% [1] Strategic Outlook - The company plans to increase the number of beauty industry schools to 13 by the end of 2026, targeting over 50% revenue growth [1] - Management expects a 10% revenue growth and over 20% net profit growth for 2026 [1] Profitability Forecast and Valuation - Revenue forecasts for 2025 and 2026 have been raised by 2.4% and 6.4% to 4.5 billion yuan and 5 billion yuan, respectively [2] - Adjusted net profit forecasts for 2025 and 2026 have been increased by 16.8% and 28.0% to 756 million yuan and 974 million yuan, respectively [2] - The target price has been raised by 58% to 9.5 HKD, based on a 9.8x 2025e adjusted EV/EBITDA [2]
中国东方教育(00667.HK)：维持新招生人数恢复正常节奏 课程结构优化显效