Investment Rating - The report assigns an "Outperform" rating for the company, indicating a positive outlook compared to the market [4]. Core Insights - The company achieved revenue of 1.983 billion RMB in H1 2024, a year-on-year increase of 1.6%, and a net profit attributable to shareholders of 272 million RMB, up 33.2% year-on-year [4]. - The company has optimized its school structure, closing down long-term loss-making institutions, resulting in a total of 234 schools as of H1 2024, a decrease of 11 from the end of 2023 [4]. - The focus on high-value-added programs has improved profitability, with a gross margin of 53% in H1 2024, an increase of 1.9 percentage points year-on-year [4]. - The report forecasts revenues for 2024-2026 to be 4.174 billion RMB, 4.606 billion RMB, and 5.050 billion RMB respectively, with adjusted net profits of 427 million RMB, 525 million RMB, and 625 million RMB, corresponding to PE ratios of 11X, 9X, and 8X [4][5]. Summary by Sections Financial Performance - In H1 2024, the company reported a revenue of 1.983 billion RMB, with a year-on-year growth of 1.6% and an adjusted net profit of 278 million RMB, reflecting a significant increase of 57.9% [4]. - The company’s gross margin improved to 53% in H1 2024, up from the previous year [4]. School Structure and Cost Management - The company has reduced the number of schools to 234, optimizing its brand structure and significantly improving cost efficiency, with sales and management expense ratios decreasing to 23.4% and 12.9% respectively [4]. - The focus on high-value programs has led to a shift in enrollment, with a notable increase in long-term course registrations [4]. Market Segments - The culinary segment remains the most significant, contributing approximately 54% of total revenue, while the beauty industry is showing strong growth [4]. - The internet training segment is under pressure due to increased competition, with a decline in both revenue and new enrollments [4]. Profitability Forecast - The report projects a steady increase in revenue and adjusted net profit over the next three years, with a significant improvement in profitability metrics [5][6].
中国东方教育：降本增效显著，招生结构优化、盈利能力改善