OFFCN EDU(SZ:002607) Soochow Securities·2024-05-05 01:30Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a significant improvement in profits for Q1 2024, with a net profit increase of 240.7% year-on-year to 82.79 million yuan, despite a revenue decline of 14.1% to 760 million yuan [2] - The company has implemented measures such as shutting down underperforming branches and restructuring to improve operational efficiency, resulting in a 50.8% decrease in total operating costs in 2023 [2][3] - The demand for talent recruitment and training remains strong due to ongoing employment pressures, with the number of college graduates in 2023 reaching 11.58 million, an increase of 820,000 from the previous year [2] Financial Performance Summary - Total revenue for 2023 was 3.086 billion yuan, a decrease of 36.0% year-on-year, while the net profit attributable to shareholders was -209.43 million yuan, an improvement from -1.1 billion yuan in 2022 [2] - The company’s revenue projections for 2024 and 2025 are 3.493 billion yuan and 3.969 billion yuan, respectively, with expected net profits of 373.90 million yuan and 440.05 million yuan [2][3] - The company’s operating costs and expenses have been significantly reduced, with sales expenses down by 48.5% and management expenses down by 47.3% in 2023 [2] Stock Performance and Valuation - The current stock price is 2.66 yuan, with a market capitalization of approximately 16.41 billion yuan [5] - The price-to-earnings (P/E) ratio for 2024 is projected at 43.88, decreasing to 33.08 by 2026 [3][9] - The report indicates that the company’s long-term scale advantages are expected to support its market position despite short-term challenges [3]