Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 5.38 [7][13]. Core Views - The company's fundamentals are improving, with expectations of turning profitable for the full year 2025, supported by steady growth in its core business and operational efficiency improvements [1][5]. - The K12 school operations are showing robust growth, while vocational education is expanding through partnerships with leading companies [2][5]. - The company has optimized its operational efficiency, leading to an upward trend in profit margins [3][5]. - The change in major shareholder to Haiguotou is expected to facilitate asset structure optimization and enhance decision-making processes [4][5]. Summary by Sections Financial Performance - In 2024, the company achieved revenue of RMB 320 million, a year-on-year increase of 25.92%, and a net profit loss of RMB 37 million, reducing losses by 25.66% [1]. - For Q1 2025, the company reported revenue of RMB 90.67 million, a year-on-year increase of 17.68%, and a net profit of RMB 468,400, marking a return to profitability [1]. Business Segments - Revenue from education services, training services, and housing leasing for 2024 was RMB 260 million, RMB 55 million, and RMB 5 million respectively, with year-on-year changes of +41.86%, -16.90%, and +10.13% [2]. - The K12 school segment is experiencing steady growth in student enrollment, while vocational education is expanding through collaborations with major companies [2]. Operational Efficiency - The company has effectively controlled sales, management, and financial expenses, with reductions of 18%, 4%, and 14% respectively [3]. - The gross profit margins for Q1 2024 to Q1 2025 showed an upward trend, indicating improved profitability [3]. Shareholder Changes - Haiguotou has become the largest shareholder after acquiring 14.84% of the shares, which is expected to streamline decision-making and support the company's long-term development [4]. Profit Forecast and Valuation - The company is projected to achieve net profits of RMB 25.16 million, RMB 46.65 million, and RMB 56.32 million for the years 2025, 2026, and 2027 respectively [5][6]. - The target price of RMB 5.38 is based on a DCF valuation, with an updated WACC of 9.36% and a perpetual growth rate of 2% [5][13].

Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 5.38 [7][13]. Core Views - The company's fundamentals are improving, with expectations of turning profitable for the full year 2025, supported by steady growth in its core business and operational efficiency improvements [1][5]. - The K12 school operations are showing robust growth, while vocational education is expanding through partnerships with leading companies [2][5]. - The company has optimized its operational efficiency, leading to an upward trend in profit margins [3][5]. - The change in major shareholders, with Haiguotou becoming the largest shareholder, is expected to facilitate better decision-making and resource allocation [4][5]. Summary by Sections Financial Performance - In 2024, the company achieved revenue of RMB 320 million, a year-on-year increase of 25.92%, and a net profit loss of RMB 37 million, reducing losses by 25.66% [1][6]. - For Q1 2025, the company reported revenue of RMB 90.67 million, a year-on-year increase of 17.68%, and a net profit of RMB 468,400, marking a return to profitability [1][6]. Business Segments - Revenue from education services, training services, and housing leasing in 2024 was RMB 260 million, RMB 55 million, and RMB 5 million, respectively, with year-on-year changes of +41.86%, -16.90%, and +10.13% [2][5]. - The K12 school segment is experiencing steady growth in student enrollment, while vocational education is expanding through collaborations with major companies [2][5]. Operational Efficiency - The company has successfully reduced sales, management, and financial expenses by 18%, 4%, and 14%, respectively, leading to improved cost control [3][5]. - The gross profit margin for Q1 2025 was reported at 32%, indicating a steady increase in profitability [3][5]. Shareholder Changes - Haiguotou's acquisition of 14.84% of shares from the previous major shareholder has increased its stake to 16%, positioning it as the largest shareholder [4][5]. Profit Forecast and Valuation - The company is projected to achieve net profits of RMB 25.16 million, RMB 46.65 million, and RMB 56.32 million for the years 2025, 2026, and 2027, respectively [5][6]. - The target price of RMB 5.38 is based on a DCF valuation, with an updated WACC of 9.36% and a perpetual growth rate of 2% [5][13].

Financial Performance - In Q1 2025, the company achieved revenue of 91 million, representing a year-on-year growth of 17.68%, and net profit turned positive for the first time [2] - The company reported significant improvement in its financial performance compared to previous periods [2] Business Segments - The company's operations are divided into three main segments: K12 school operations, quality education, and vocational education [2] - K12 school operations have expanded, achieving record high admission results and continuously developing the K12 curriculum [2] - In quality education, the company leverages its resources in arts, music, and sports to offer various camp and research activities for students [2] - In vocational education, the company has established a platform through Haike Vocational Education (Beijing) Technology Co., Ltd., and has opened a branch in Shandong, collaborating with multiple institutions to create industry colleges [2] Future Plans - The company plans to seize market opportunities by expanding into new educational sectors, including partnerships to build industry colleges and focusing on digital economy and AI-related programs [3] - The company aims to enhance the variety of educational services and improve asset returns through light asset operation models to increase business scale and profitability [3]