Core Viewpoint - The competitive ratio for the 2025 national civil service examination is approximately 65:1, highlighting the intense competition in the public sector job market, which has driven significant growth in non-degree training services provided by Huatu Shanding [1][5]. Company Performance - In 2024, Huatu Shanding achieved revenue of 2.833 billion yuan, a year-on-year increase of 1046.34%, with non-degree training contributing 98.54% of total revenue [1][3]. - For Q1 2024, the company reported revenue of 827 million yuan, a nearly 20% increase year-on-year, and a net profit of 121 million yuan, up nearly 70% [4]. - The company’s non-degree training business had a gross margin of 54.46% in 2024, slightly lower than its competitors, Zhonggong Education and Fenbi [9]. Industry Trends - The number of candidates for the national civil service examination has surged, with 258.6 million applicants for 39,700 positions in 2025, indicating a growing demand for public service exam training [5]. - The market for examination training is projected to reach 50.5 billion yuan by 2026, with significant growth rates expected in civil service, public institutions, and teacher qualification training sectors [6]. - The trend of increasing college graduate numbers, expected to reach 12.22 million in 2025, is likely to sustain the demand for public service examination training [5]. Competitive Landscape - The public examination training market is characterized by oligopolistic competition, with Huatu Shanding, Zhonggong Education, and Fenbi holding significant market shares [8]. - Huatu Shanding has established a robust teacher training system, which is a core competitive advantage in the public examination training sector [9]. Research and Development - Huatu Shanding increased its R&D expenditure to 199 million yuan in 2024, with a significant rise of 511.6% in Q1 2024, reflecting a focus on AI development [10]. - The company has expanded its R&D team, reaching 864 personnel by the end of 2024, and has launched multiple AI products [10].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has entered a profit realization phase, with significant revenue and profit growth reported for 2024 and Q1 2025. The revenue for 2024 reached 2.83 billion yuan, a year-on-year increase of 1,046%, while the net profit attributable to shareholders was 0.53 billion yuan, up 158% year-on-year [8] - The company has launched an employee stock ownership plan, allowing 275 core employees, including 13 executives, to acquire shares at a price of 45.91 yuan per share, with a total investment cap of 1.25 billion yuan [8] - The company is expected to continue to release profits as it stabilizes operations post-employee stock plan implementation, with revised net profit forecasts for 2025-2027 being 3.7 billion, 4.5 billion, and 4.9 billion yuan respectively [8] Financial Performance Summary - For 2024, total revenue is projected at 28.33 billion yuan, with a year-on-year growth of 1,046% and a net profit of 0.53 billion yuan, reflecting a 158% increase [8] - The first quarter of 2025 shows revenue of 8.27 billion yuan, a 19% increase year-on-year, and a net profit of 1.21 billion yuan, up 67% year-on-year [8] - The non-academic training business has seen substantial growth, with revenue reaching 2.79 billion yuan in 2024, a year-on-year increase of 1,309% [8] Valuation Metrics - The company’s earnings per share (EPS) for 2024 is projected at 0.38 yuan, increasing to 2.62 yuan in 2025, and further to 3.22 yuan in 2026 [1] - The price-to-earnings (P/E) ratio is expected to be 34.78 for 2025, 28.32 for 2026, and 26.27 for 2027, indicating a relatively reasonable valuation within the public examination training industry [8]