Investment Rating - The report assigns a "Buy" rating for China Oriental Education (0667.HK) as part of its initial coverage [2][10]. Core Insights - The company is expected to benefit from product upgrades, optimization of school networks, and recruitment structure, leading to sustained profit growth [2][10]. - In 2024, the company achieved a revenue of 4.12 billion yuan, a year-on-year increase of 3.5%, and a net profit of 510 million yuan, reflecting a significant year-on-year growth of 88% [4][7]. - The report highlights a strong performance relative to the Hang Seng Index, with a 1-month, 3-month, and 12-month performance of 42.4%, 90.0%, and 123.0% respectively [6]. Financial Performance - Revenue and Profit: In 2024, the company reported a revenue of 4.12 billion yuan and a gross profit of 2.12 billion yuan, with a gross margin of 51.4%, up by 3.4 percentage points year-on-year [7][10]. - Dividend: The company plans to distribute a dividend of 0.22 HKD per share in 2024, totaling approximately 479 million HKD, with a payout ratio of 78.2% [7][10]. - Cash Position: As of the end of 2024, the company had cash reserves of 3 billion yuan, representing 31.7% of total assets [7][10]. Business Strategy - The company is focusing on optimizing its product system to adapt to market demand changes and is actively reducing the number of schools to enhance revenue and profit per school [10]. - The average tuition fee has increased by 3.6% due to a higher proportion of 1-2 year courses, despite a 6.2% decline in total enrollment [8][10]. - The company has established vocational education industrial parks in key provinces to improve resource allocation efficiency and reduce rental costs [10]. Forecasts - Revenue projections for 2025-2027 are estimated at 44.2 billion yuan, 47.7 billion yuan, and 51.5 billion yuan respectively, with net profits of 6.3 billion yuan, 7.6 billion yuan, and 9.2 billion yuan [9][10]. - The report anticipates a continuous improvement in profitability, with a projected PE ratio of 15, 13, and 11 for the years 2025, 2026, and 2027 respectively [10][11].
中国东方教育（00667）：产品升级、学校网络和招生结构优化，看好利润持续释放