KINGSWOOD EDUCATION(SZ:300192) Xinda Securities·2025-10-28 12:06Investment Rating - The report maintains a "Buy" rating for the company, indicating that the stock price is expected to outperform the benchmark by more than 15% [5]. Core Insights - In Q3 2025, the company achieved revenue of 190 million yuan, a year-on-year decrease of 8.1%, and a net profit attributable to the parent company of 39.17 million yuan, down 9.8% year-on-year [2][5]. - The company is expected to benefit from the capital operations of its associate company, Zhonghao Xinying, which has initiated its IPO process [5]. - The report adjusts the net profit forecasts for 2025 to 150 million yuan, 2026 to 172 million yuan, and 2027 to 195 million yuan, with corresponding P/E ratios of 40x, 35x, and 31x [5]. Financial Performance Summary - Total revenue (in million yuan) is projected to be 771 in 2023, 795 in 2024, 800 in 2025, 879 in 2026, and 959 in 2027, with a growth rate of -2.9% in 2023 and expected growth rates of 3.1%, 0.6%, 9.9%, and 9.1% in the following years [4]. - The net profit attributable to the parent company is forecasted to be 139 million yuan in 2023, 145 million yuan in 2024, 150 million yuan in 2025, 172 million yuan in 2026, and 195 million yuan in 2027, with significant growth in 2023 at 83.6% [4]. - The gross margin is expected to remain stable around 33.1% to 34.3% from 2025 to 2027 [4]. Investment and Profitability Metrics - The report indicates an increase in gross margin to 42.7% in Q3 2025, up 3.0 percentage points year-on-year [5]. - The return on equity (ROE) is projected to be 15.6% in 2023, slightly decreasing to 14.8% in 2025, before rising to 16.3% in 2027 [4]. - Earnings per share (EPS) is expected to grow from 0.42 yuan in 2023 to 0.59 yuan in 2027 [4]. Other Relevant Information - The company realized investment income of 2.28 million yuan in Q3 2025, primarily attributed to the profitability of Zhonghao Xinying [5]. - The report highlights the potential impact of macroeconomic conditions on consumer willingness to spend on educational products, which may have contributed to the revenue decline [5].