Core Viewpoint - The company, recognized as the "first stock in higher education" in the A-share market, has demonstrated steady growth and accelerated performance release in its core higher education business, driven by an increase in student enrollment [1] Financial Performance - For the period of January to September 2025, the company achieved operating revenue of 224 million yuan, a year-on-year increase of 6.01%, and a net profit attributable to shareholders of 29 million yuan, up 25.63% year-on-year [1] - Earnings per share (EPS) for the same period was 0.46 yuan, reflecting a year-on-year growth of 25.64% [1] - The operating revenue for the years 2023 to 2025 (January to September) was 263 million yuan, 287 million yuan, and 224 million yuan, with respective year-on-year growth rates of 10.71%, 9.15%, and 6.01% [1] - The net profit attributable to shareholders for the same years was 41 million yuan, 46 million yuan, and 29 million yuan, with year-on-year growth rates of 5.69%, 15.68%, and 25.63% [1] Profitability and Cost Control - The company's gross profit margin for January to September 2025 was 53.13%, an increase of 2 percentage points year-on-year, and a quarter-on-quarter increase of 1.27 percentage points [2] - The net profit margin was 12.85%, up 2.01 percentage points year-on-year and 1.41 percentage points quarter-on-quarter [2] - The company effectively controlled expenses, with a total expense ratio of 35.26%, down 1.31 percentage points year-on-year and 0.71 percentage points quarter-on-quarter [2] - Management expenses (including R&D) accounted for 33.16% of revenue, decreasing by 1.09 percentage points year-on-year and 0.51 percentage points quarter-on-quarter [2] Project Development and Financial Position - The company is actively advancing the construction of its second phase project for the urban college, with construction in progress increasing significantly [2] - As of September 2025, the balance of construction in progress was 461 million yuan, a year-on-year increase of 61.78% [2] - Long-term borrowings increased significantly to 141 million yuan, a year-on-year increase of 225.66%, leading to a notable rise in the company's debt-to-asset ratio [2] - The debt-to-asset ratio as of September 2025 was 67.42%, up 3.36 percentage points year-on-year and 3.48 percentage points quarter-on-quarter [2] Cash Flow and Future Growth - The company's cash flow remains strong, supported by a prepayment system in its core higher education business [3] - The cash collection ratio for January to September 2025 was 113.61%, a decrease of 5.15 percentage points year-on-year but an increase of 10.68 percentage points quarter-on-quarter [3] - Contract liabilities grew steadily, reaching 223 million yuan as of September 2025, a year-on-year increase of 0.45% and a quarter-on-quarter increase of 16.75%, enhancing the certainty of future performance [3] Investment Outlook - Revenue projections for 2025 to 2027 are estimated at 313 million yuan, 338 million yuan, and 361 million yuan, with EPS expected to be 0.54 yuan, 0.63 yuan, and 0.69 yuan, respectively [3] - The company is well-positioned for future growth, leveraging its strategic partnership with Xi'an Jiaotong University and the rapid progress of its urban college phase two project [3]

Investment Rating - The report maintains a "Cautious Recommendation" rating for the company [7]. Core Views - The company has shown steady growth in its core higher education business, with significant performance acceleration in recent quarters. For the first nine months of 2025, the company achieved revenue of 224 million yuan, a year-on-year increase of 6.01%, and a net profit of 29 million yuan, up 25.63% year-on-year [1][4]. - The company's profitability has improved significantly, with a gross margin of 53.13%, up 2 percentage points year-on-year, and a net profit margin of 12.85%, an increase of 2.01 percentage points year-on-year [2]. - The second phase of the urban college project is progressing rapidly, with construction in progress increasing by 61.78% year-on-year, leading to a significant rise in the company's debt levels [3]. - The company's cash flow remains strong, supported by a prepayment system in its higher education business, with a cash collection ratio of 113.61% for the first nine months of 2025 [4]. Summary by Sections Financial Performance - For the first nine months of 2025, the company reported revenues of 224 million yuan, with a year-on-year growth of 6.01%. The net profit was 29 million yuan, reflecting a 25.63% increase year-on-year. The earnings per share (EPS) reached 0.46 yuan, up 25.64% [1]. - The gross margin improved to 53.13%, and the net profit margin reached 12.85%, indicating better cost control and profitability [2]. Project Development - The second phase of the urban college project is advancing quickly, with construction in progress valued at 461 million yuan, a 61.78% increase year-on-year. Long-term borrowings have surged by 225.66% to 141 million yuan due to project financing needs [3]. Cash Flow and Liabilities - The company maintains a healthy cash flow, with a cash collection ratio of 113.61%. Contract liabilities have also grown, reaching 223 million yuan, which enhances future revenue certainty [4]. Future Outlook - Revenue projections for 2025-2027 are estimated at 313 million yuan, 338 million yuan, and 361 million yuan, respectively, with EPS expected to grow to 0.54 yuan, 0.63 yuan, and 0.69 yuan. The dynamic price-to-earnings (PE) ratios are forecasted to be 52, 45, and 40 [6][4].