Investment Rating - The investment rating for the company is "Buy" with a current price of 5.86 HKD and a target value of 6.23 HKD [1]. Core Insights - The company reported a strong performance in the first half of 2024, achieving revenue of 400 million RMB, a year-on-year increase of 58.8%. The gross margin was 44.4%, and net profit reached 82.65 million RMB, up 92.5% year-on-year. Adjusted net profit was 93.54 million RMB, reflecting a 101.1% increase, exceeding market expectations [2]. - The significant growth in student enrollment supported the impressive revenue performance, with contract liabilities showing strong results, providing solid support for the full-year performance. The non-academic quality courses generated revenue of 370 million RMB, a year-on-year increase of 57.8%, while tutoring courses achieved revenue of 32.58 million RMB, up 70.6%. The number of enrolled students reached 184,000, a 58.2% increase year-on-year, with total class hours at 4.564 million, also up 58.1%. Contract liabilities at the end of the first half of 2024 were 250 million RMB, a 93.2% increase year-on-year, laying a strong foundation for revenue in the second half and future renewals [2]. - The improvement in operational efficiency has led to enhanced profitability, with a gross margin of 44.38%, an increase of 3.0 percentage points year-on-year. The sales and management expense ratios were 1.6% and 16.7%, respectively, down 0.4 and 6.8 percentage points year-on-year, benefiting from an optimized competitive landscape and improved operational efficiency. The adjusted net profit margin was 23.4%, up 4.9 percentage points year-on-year [2]. - The company is pursuing long-term development through diversification in non-academic areas, having launched educational tourism and international courses since July 2023. The company aims to strengthen its "LeXue" brand, which includes art, sports, painting, performance, calligraphy, scientific literacy, traditional culture, logical thinking training, and international literacy, to promote comprehensive diversification in the future [2]. - Based on the strong performance in the first half of 2024, the profit forecast has been adjusted upwards. The expected adjusted net profits for 2024-2026 are 170 million RMB, 240 million RMB, and 310 million RMB, respectively. The company is given a 22x PE valuation for 2024, resulting in a target value of 6.23 HKD per share [2]. Financial Summary - The company's main revenue for 2024 is projected to be 852 million RMB, with a growth rate of 49.3%. The adjusted net profit is expected to be 174 million RMB, reflecting a growth rate of 60.9% [3]. - The gross margin is expected to remain strong, with a projected rate of 44.0% in 2024, and the adjusted net profit margin is expected to be 20.4% [9]. - The company's return on equity (ROE) is projected to be 28.2% in 2024, indicating strong profitability [9].
思考乐教育：业绩表现超预期，高增长有望延续