Investment Rating - The report gives a "Buy" rating for China Oriental Education with a target price of HKD 10.05, indicating a potential upside of 51.3% from the current price of HKD 6.64 [3][6]. Core Insights - China Oriental Education, established in 1988, is the largest vocational skills education provider in China, focusing on five main areas: culinary arts, Western pastry and cuisine, information and internet technology, automotive services, and fashion beauty [4][15]. - The company has shown a compound annual growth rate (CAGR) of 20.89% in revenue from 2015 to 2019, driven primarily by the number of training participants. However, revenue growth slowed from 2020 to 2022 due to external factors such as restrictions on in-person classes and competition from general high school policies [4][27]. - The company has adapted its business strategy in response to changing market conditions, leading to a recovery in performance starting in 2024, with revenue and net profit showing significant year-on-year growth [4][6]. Company Overview - China Oriental Education operates under several brands, including New Oriental Culinary Education, Xinhua Computer, and Wan Tong Automotive, among others. As of June 2025, the company has 234 schools across various provinces and regions [15][17]. - The company’s revenue for the first half of 2025 was HKD 21.9 billion, representing a year-on-year increase of 10.2%, with net profit reaching HKD 4.0 billion, up 48.4% [4][44]. Industry Analysis - The vocational education market in China is projected to grow significantly, with the total market size expected to increase from RMB 516.7 billion in 2016 to RMB 1.1 trillion by 2026, reflecting a CAGR of 7.8% [74]. - The demand for vocational education remains strong despite the increasing number of general high school graduates, as many young individuals face higher unemployment rates and seek vocational training to enhance their employability [67][68]. - The report highlights a shift in the education landscape, where institutions with strong teaching capabilities and research strengths are better positioned to capture market share amid increasing competition [61][62].
中国东方教育（00667）：职教龙头战略转型，穿越周期重拾增长