Core Viewpoint - The Hong Kong education sector is experiencing a stark contrast in market activity, with some segments thriving while the education sector remains stagnant, characterized by low trading volumes and declining valuations [1] Group 1: Market Performance - The average daily trading volume for the Hong Kong education sector is around 500 million HKD, significantly lower than that of popular cyclical stocks [1] - The leading company, Zhongjiao Holdings (00839), has seen its market value shrink by over 70% from its peak [1] - The education sector has declined nearly 70% from 2020 to 2024, with a modest recovery expected in 2025 as negative impacts diminish [1][2] Group 2: Policy and Growth Potential - The education sector is highly sensitive to policy changes, with recent developments in vocational education raising market expectations [1] - The market is expected to focus on high school and above education levels due to declining birth rates and a projected peak in middle and high school enrollments around 2029 and 2032, respectively [2] - Vocational education is anticipated to have a 10-year growth cycle supported by ongoing policy backing [2] Group 3: Financial Performance - Despite the overall market decline, many vocational education companies have maintained double-digit revenue growth over the past three fiscal years [4] - Zhongjiao Holdings reported a compound annual growth rate of 17.6% in revenue from 2022 to 2024, with a growth of 11.85% in the first half of 2025 [4] - The average price-to-earnings (PE) ratio for vocational education stocks is below 5, indicating low valuations despite stable earnings [5] Group 4: Investment Opportunities - The vocational education sector is seen as having a solid bottoming out, with companies beginning to seek expansion and maintain high dividend yields [5] - Many vocational education stocks have dividend yields exceeding 5%, with some surpassing 10%, such as Zhonghui Group (11.48%) and Xinhigh Education Group (16.8%) [5] - The sector is attracting investor attention through capital market activities, including stock buybacks and management share purchases [7] Group 5: Future Outlook - The education sector is expected to see a gradual recovery as market sentiment improves, supported by ongoing earnings growth and the potential for value discovery in undervalued stocks [9] - Companies like Zhongjiao are focusing on optimizing their business models and addressing past challenges related to goodwill impairment, which is expected to stabilize future earnings [9]
捡漏职业教育板块：遍地“白菜价”，业绩支撑右侧机遇或在酝酿