Kaiwen Education(SZ:002659) ZHONGTAI SECURITIES·2024-05-05 03:30Investment Rating - The report initiates coverage with a "Buy" rating for Kevin Education [51] Core Viewpoints - Kevin Education is a diversified education group with a state-owned background, focusing on K12 education and vocational education [13][14] - The company has undergone significant changes in its business model, particularly after the implementation of the Private Education Promotion Law in 2021, which has impacted its operations and revenue structure [14][21] - The company's revenue base is relatively low, with total education business revenue remaining under 300 million yuan since 2018 [16][19] Business Overview - The main business segments include K12 school operations, integration of industry and education, and training services [13][14] - K12 school operations involve two international bilingual schools in Beijing, which have been operational since 2016 and 2017, respectively [19] - The integration of industry and education focuses on light-asset cooperation projects in vocational education [13] - Training services include non-academic training and the operation of the Xishan Ski Resort in Beijing [23] Financial Performance and Forecast - The company has shown a trend of reducing losses, with a net profit of -20 million yuan in the first half of 2023, an improvement of 15 million yuan compared to the same period in 2021 [45] - Revenue forecasts for 2024, 2025, and 2026 are projected to be 307 million, 385 million, and 492 million yuan, respectively, with year-on-year growth rates of 20.85%, 25.64%, and 27.56% [47][33] - The K12 school operations are expected to contribute significantly to total revenue, although their share is projected to decline from 80.20% in 2022 to 50.32% by 2026 [30] Business Model Characteristics - Kevin Education's business model is characterized by a strong annual system and high customer retention [25] - The shift to a light-asset operation model allows the company to focus on service provision without bearing the costs associated with being a school operator [25][34]