Investment Rating - The report assigns a "Buy" rating for Tianli International Holdings (01773.HK) for the first time [3]. Core Views - Tianli International Holdings is a leading private K12 education group in China, demonstrating strong brand effects and a solid industry position. The company has successfully adjusted its business structure post-2021 Education Promotion Law, maintaining an expansion rate of 3-5 new high schools annually, with a target of operating 40-50 high schools by 2027 [3][31]. - The company is expected to achieve significant revenue growth, with total revenue projected to reach CNY 6.94 billion by FY2027, reflecting a compound annual growth rate (CAGR) of 24.52% from FY2024 [3]. - The net profit attributable to shareholders is forecasted to grow to CNY 1.34 billion by FY2027, with a corresponding price-to-earnings (P/E) ratio decreasing from 12x in FY2025 to 7x in FY2027 [3]. Summary by Sections Company Overview - Tianli International Holdings was established in 2002 and has expanded from a K9 focus to a comprehensive K12 education provider, with 58 schools across 18 provinces as of November 2024, serving over 130,000 students [16][31]. - The company has shown a 30% year-on-year increase in student enrollment, particularly in high school, where the number of students has grown by 46% [3][31]. Industry Analysis - The policy environment for private education is stabilizing, with strong local demand for high-quality private high schools. The government continues to support the development of private education, emphasizing high-quality growth [39][41]. - The competition landscape is stable, with high entry barriers for new players, allowing established firms like Tianli to maintain their leading positions [41]. Financial Performance - For FY2024, Tianli reported a revenue of CNY 3.32 billion, a 44% increase year-on-year, and a net profit of CNY 576 million, reflecting a 73% growth [31][34]. - The company’s gross profit margin remained healthy at 33.7%, with gross profit increasing by 43.7% year-on-year [34]. Competitive Advantages - Tianli's strong academic performance, including high college admission rates, supports its brand reputation and facilitates its expansion into new regions [60]. - The company employs a differentiated teaching approach, including a tiered training system to cater to various student needs, enhancing its educational offerings [62].
天立国际控股：K12民办学校龙头品牌效应价值显现，业务转型轻资产模式开辟第二曲线-20250218