Investment Rating - Buy (First Coverage) [4] Core Views - Existing school utilization is improving, driving profit growth, while the light-asset model for expansion is expected to drive growth beyond expectations [3] - The market underestimates the company's endogenous growth potential, with the current utilization rate of existing schools at 50%, and the potential to accommodate 160,000 students, driving a CAGR of over 23% in revenue from 2024 to 2027 [3] - The company's high school business is expected to see a 10% improvement in expense ratio from 2024 to 2027, leading to a CAGR of over 28% in adjusted profits [3] - The light-asset model, including托管 (trusteeship) services, is expected to drive rapid expansion, with the potential to contribute an additional revenue of 27 billion yuan in the long term [3] Company Overview - Tianli International Holdings is a leading private education company in China, focusing on K12 education with a strong emphasis on academic performance [22] - The company operates 58 schools across 18 provinces, with a mature school network achieving over 55% first-tier university admission rates and 90% undergraduate admission rates [3] - The company has a stable ownership structure, with the founder holding 43% of the shares, and has been actively repurchasing shares since July 2023, demonstrating confidence in future growth [28] - The company has successfully transitioned its business model post-policy changes, focusing on profitable high schools and expanding into comprehensive素养 (quality education) services,游学研学 (study tours), and托管 (trusteeship) services [38] Industry Analysis - Private education serves as an important supplement to public education, especially in the high school segment, where public财政 (fiscal) resources are limited [49] - The政策 (policy) encourages the expansion of优质 (high-quality) high school education, with民办 (private) high schools playing a significant role in补充 (supplementing) public resources [74] - The民办 high school sector has seen rapid growth, with the number of students in民办 high schools increasing at a CAGR of 10% from 2019 to 2023, and the market share rising from 9% in 2010 to 20% in 2023 [74] - The适龄 (school-age) population for high schools is expected to grow at a CAGR of 1.2% from 2023 to 2030, with the入学率 (enrollment rate) for普通 (regular) high schools expected to increase, providing opportunities for民办 high schools [78] Business Strategy - The company has adopted a "一干多支" (one trunk, multiple branches) strategy, focusing on profitable high schools as the core business while expanding into multiple ancillary services [82] - The high school segment has shown strong growth, with the number of high school students increasing by 47% in the 2024-2025 academic year, driven by excellent academic performance [84] - The company has developed a comprehensive curriculum and teacher training system, ensuring high-quality education delivery and supporting future growth [90] - The company is expanding its多元 (diverse)升学 (college entrance) services, including艺术 (art),国际 (international), and复读 (repeater) programs, to meet the diverse needs of students [108] Financial Performance - The company's revenue and profit have shown strong growth, with FY2024 revenue increasing by 44% and profit by 66% [38] - The company's毛利率 (gross margin) has stabilized at around 34%, with the净利润率 (net profit margin) recovering to 17% in FY2024 [47] - The company's托管 (trusteeship)业务 (business) is expected to become a second growth curve, with the potential to contribute significantly to future revenue [127]
天立国际控股深度报告：现有院校利用率爬坡，外延轻资产模式扩张