Investment Rating - The report maintains an "Outperform" rating for the social services sector, indicating expected performance above the market index by more than 10% [3][46]. Core Insights - The education sector has shown significant stock performance differentiation since early 2025, with notable gains in companies such as China Oriental Education (+139%) and Gaotu Group (+74%) [1][11]. - Demand within the education sector is highly variable, with high school education and K9 high-age training showing the strongest demand, while vocational schools and study abroad programs face pressure [1][11]. - The K12 education sector is entering a new phase of competition, emphasizing brand and teaching capabilities as key drivers for growth, with a slowdown in the rapid expansion of physical locations [2][28]. - The recovery pace varies among companies, with some like China Oriental Education and Gaotu Group showing strong performance due to strategic focus on K12 education [2][33]. Summary by Sections Demand Differentiation - Demand for educational services is closely tied to their effectiveness in enhancing employment and academic opportunities, with high school education being the most in-demand segment [1][11]. - The report highlights that nearly half of families allocate extra funds for children's education, indicating a robust market for educational services [11][27]. Competitive Landscape - The K12 education sector is witnessing a shift from rapid expansion to focusing on existing locations, with a notable decrease in the growth rate of K9 non-academic training institutions [2][28]. - The number of registered high school academic training institutions remains stable, suggesting a consolidation phase in the market [2][28]. Recovery Trends - Since the implementation of new regulations in May 2022, the K12 education sector has begun to recover, with companies like Zhuoyue Education focusing on compliant high school-related businesses [2][33]. - Companies such as Yuhua Education and Xijiao International Holdings are addressing financial restructuring, indicating a gradual recovery in market sentiment [2][33]. Investment Recommendations - The report suggests a focus on companies like Tongcheng Travel, Ctrip Group, and Meituan, which are expected to benefit from favorable policies aimed at boosting domestic demand [3][46].

Investment Rating - The report maintains an "Outperform the Market" rating for the social services sector [3][46]. Core Insights - The education sector has shown significant stock performance differentiation since early 2025, with notable gains from companies like China Oriental Education (+139%) and Gaotu Group (+74%) [1][11]. - Demand differentiation in education services is driven by the effectiveness in enhancing employment and academic opportunities, with high school education showing the most rigid demand [1][11]. - The K12 education sector is entering a new phase of competition, emphasizing brand and teaching capabilities as key drivers for growth [2][28]. - The recovery pace varies among companies, with some like China Oriental Education and Gaotu Group showing strong performance due to strategic focus on K12 education [2][33]. Summary by Sections Demand Differentiation - Demand for education services varies significantly based on the perceived value in enhancing academic and employment outcomes, with high school education and K9 high-age training showing the strongest demand [1][11]. - The consumer willingness to invest in children's education remains high, with nearly half of families allocating extra funds for this purpose [11][27]. K12 Education Competition - The K12 education sector is experiencing a slowdown in the rapid expansion of physical locations, shifting focus to enhancing existing outlets [2][28]. - The number of new K9 profit-oriented non-academic training institutions has decreased significantly in early 2025 compared to the previous year [2][28]. Recovery Trends - Since the implementation of the "Double Reduction" policy in May 2022, the K12 education sector has gradually recovered, with companies like Zhuoyue Education focusing on compliant high school-related businesses [2][33]. - Companies like China Oriental Education are expected to see a gradual easing of pandemic-related impacts as they adapt to new market conditions [2][33]. Investment Recommendations - The report suggests a focus on companies such as Tongcheng Travel, Ctrip Group, and Meituan, among others, as potential investment opportunities in the current economic environment [3][46].