HUATU CENDES(SZ:300492) Haitong Securities International·2026-01-06 09:12Investment Rating - The report assigns an "Outperform" rating to the company, with a target price of 89.2 yuan based on a 40x PE valuation for 2026 [4][7]. Core Insights - The company is leveraging AI technology and a strategic focus on local markets to enhance its market share in the public examination sector, supported by a partnership with Fenbi [1][4]. - The projected net profits for the company are expected to be 312 million yuan, 438 million yuan, and 543 million yuan for the years 2025 to 2027, respectively, with corresponding EPS of 1.58 yuan, 2.23 yuan, and 2.76 yuan [4][7]. - The non-degree training business is anticipated to be the main revenue driver, with significant growth expected in the coming years [4][45]. Financial Summary - Total revenue is projected to grow from 247 million yuan in 2023 to 5,159 million yuan in 2027, reflecting a compound annual growth rate (CAGR) of approximately 131.3% in 2024 [3][4]. - The net profit attributable to the parent company is expected to turn from a loss of 92 million yuan in 2023 to a profit of 543 million yuan by 2027 [3][4]. - The gross margin is expected to improve from 53.48% in 2024 to 57.16% in 2027, driven by enhanced operational efficiency and brand strength [12][9]. Company Development - The company transitioned from a traditional architectural design firm to a player in the vocational education sector, leveraging resources from its controlling shareholder, Huatu Hongyang [15][16]. - The establishment of Huatu Education Technology Co., Ltd. in 2023 marks a significant step in the company's focus on examination training and vocational skills [16][15]. Industry Analysis - The number of college graduates in China is projected to exceed 12 million by 2025, creating a sustained demand for public examination training [25][40]. - The public examination training market is expected to reach approximately 151 billion yuan in 2025, with a potential growth to 237 billion yuan by 2030 [40][43]. - The overall vocational education training market is forecasted to grow from 781 billion yuan in 2021 to 1,102 billion yuan by 2026, indicating a robust industry outlook [40][43]. Operational Analysis - The non-degree training segment accounted for 99% of the company's revenue in the first half of 2025, highlighting its dominance in the business model [45][56]. - The company has established a comprehensive network across 31 provinces, covering over 1,000 locations, which enhances its market presence and operational efficiency [57][45].