Investment Rating - The report assigns a rating of "Buy" for the company [3][11]. Core Views - The company's revenue has been slightly disturbed due to exam schedule changes and intensified industry competition, leading to a performance forecast that is slightly below expectations for H1 2024. However, the small class operations continue to show strong performance, and there is potential for OMO (Online-Merge-Offline) collaborative growth [3]. - The adjusted net profit for FY2024-2026 is projected to be 5.46 billion, 6.26 billion, and 7.15 billion RMB respectively, with a target price set at 3.85 HKD based on a 15x PE for FY2024 [3]. - The company anticipates H1 2024 revenue of no less than 16.10 billion RMB, representing a year-on-year decline of no more than 4.3%, while net profit is expected to be no less than 2.55 billion RMB, showing a year-on-year increase of at least 212.9% [3]. Summary by Sections Performance Overview - The company has released a semi-annual performance forecast indicating that H1 2024 revenue will be no less than 16.10 billion RMB, with a year-on-year decline of up to 4.3%. The net profit is expected to be no less than 2.55 billion RMB, reflecting a year-on-year growth of at least 212.9% [3]. - The adjusted net profit, excluding share-based payments and fair value losses, is projected to be no less than 3.27 billion RMB, with a year-on-year growth of no less than 13.5% [3]. Revenue and Profit Drivers - The growth in profit is attributed to several factors: 1. Continuous investment in technology and the leading application of AI in teaching and course products, enhancing teacher utilization efficiency and income contribution per teacher. 2. Improved operational efficiency through technology, leading to optimized employee costs and expected increases in gross and net profit margins for H1 2024. 3. A significant reduction in share-based payments recognized in H1 2024 [3]. Challenges and Opportunities - Revenue has been impacted by the early scheduling of civil service exams and increased price competition within the industry, alongside a weakening consumer environment affecting payment capabilities [3]. - The company is focusing on small class operations, leveraging strong product development capabilities and a large user base. The strategy includes enhancing the product matrix to meet diverse learning needs and driving growth in paid user numbers [3]. - The OMO strategy aims to improve teaching efficiency and experience through deep integration of online and offline services, supported by a strong reputation and low-cost conversion advantages [3]. Financial Projections - The financial summary indicates that the company expects adjusted net profits to grow steadily over the next few years, with specific figures for FY2024, FY2025, and FY2026 being 5.46 billion, 6.26 billion, and 7.15 billion RMB respectively [6].
粉笔2024H1业绩预告点评：考试错期扰动收入，小班运营持续发力