DJ EQS-News: Highest Target Price Reached HK$8.40 Stable Growth with Promising Prospect, China New Higher Education Group Favored by the Market
EQS-News / 31/12/2020 / 09:44 UTC+8
Immediate release 31 December 2020
(Stock Code: 2001.HK) [1]
Highest Target Price Reached HK$8.40
Stable Growth with Promising Prospect, China New Higher Education Group
Favored by the Market
(31 December 2020 - Hong Kong) China New Higher Education Group Co., Ltd.
("China New Higher Education Group", together with its subsidiaries,
collectively referred to as the "Group", stock code: 2001. HK) recently
announced its annual results for the year ended 31 August 2020. The good
performance has attracted the attention of many domestic and foreign
securities companies, including Citigroup, Morgan Stanley, DBS, CICC,
Shenwan Hongyuan, China Galaxy International, Zhongtai International, China
Merchants Securities International, First Shanghai, Industrial Securities,
Guosheng Securities, Guosen Securities (HK) and other institutions which
have reiterated the "buy" rating. Amony them, Guosen Securities (HK) raised
the target price of the Group to HK$8.4 which is the highest target price in
the market, believing that the Group's logic of two-wheel driven development
strategy of organic growth and value investment in the future will be
sustainable.
According to the financial report of the Group in the new fiscal year, the
total revenue of China New Higher Education Group in the 2019/2020 academic
year was RMB1.46 billion, with a year-on-year increase of 69.6%; the net
profit was RMB 480million, with a year-on-year increase of 124.3%; the net
profit attributable to the parent was RMB 430million, with a year-on-year
increase of 127.3%. In the 2020/2021 academic year, the total number of
enrolled students is more than 125,600, with a year-on-year increase of
nearly 11%. The organic growth continues to be robust, and the growth rate
stays ahead in China.
Guosen Securities (HK) raised its target price from HK$6.77 to HK$8.4, and
reiterated its "buy" rating, stating that the financial performance of China
New Higher Education Group in the 2020 fiscal year is outstanding and in
line with expectations. Beyond the strong main business, other income and
gains of the Group also increases steadily. Meanwhile, the Group is
relatively stable in mergers and acquisitions with abundant cash in hand.
Guosen Securities (Hong Kong) believed that the logic of two-wheel driven
development strategy of organic growth and value investment in the future
will be sustainable.
Citigroup, which reiterated its "buy" rating and gave a target price of
HK$7.9, stating that China New Higher Education Group's strong profit growth
in the 2020 fiscal year was mainly due to strong organic growth with solid
margin expansion and newly consolidated schools. Citigroup believes that
China New Higher Education Group has abundant capital reserves at present.
Looking forward to the future, the Group will steadily promote self-founding
and M&A. With decent student enrollment growth and tuition fee hike in the
2021 fiscal year, Citigroup expects the growth momentum of China New Higher
Education Group to sustain.
Shenwan Hongyuan, which once again reiterated the "buy" rating and
maintained the target price of HK$7.91, believes that considering the firm
commitment to high-quality development of China New Higher Education Group
and the relaxation of tuition fee control policy, the overall tuition fee
level of the Group will be further increased in the future. The great
post-investment management of China New Higher Education Group can help
improving the profit margin. Based on the sound post-investment management
of the newly acquired schools, the gross profit margin and net profit margin
of China New Higher Education Group have been effectively enhanced; With
strict control of sales and management costs, it is expected that the
Group's net profit and net profit margin will be further improved in the
future.
CICC stated that in the 2020 fiscal year, China New Higher Education Group
completed three mergers and acquisition projects with high-quality
consideration. Looking forward, the Group is expected to focus on
Beijing-Tianjin-Hebei, Guangdong-Hong Kong-Macao Greater Bay Area and other
regions, and adopt the mode of "M&A + self-founding" for the layout; in
terms of organic growth, CICC expects the revenue of China New Higher
Education Group to maintain a high growth rate in the 2021 fiscal year,
mainly benefiting from Higher Vocational enrollment expansion, steady growth
in students enrollment, and large room for growth in the average tuition
fees. CICC reiterated the China New Higher Education Group's "outperforming
" rating, with a target price of HK$7.4.
China Merchants Securities International raised its target price to HK$7.20
and reiterated its "buy" rating, stating that the Group's performance in the
2020 fiscal year increased steadily with abundant cash in hand, making it
well prepared for future development, expansion and potential acquisition.
China Merchants Securities believes the PEG of China New Higher Education
Group is more attractive than its peers.
DBS Group stated in its research report that the market has under-estimated
China New Higher Education Group's organic growth potential. DBS expected
the average tuition fee of the Group to have around 10% y-o-y CAGR growth
considering that the Group adopts the strategy of improving pricing power by
providing premium quality teaching services. Besides, the Group is also
proactively seeking suitable acquisition targets on top of its organic
growth. Given that the Group is now trading at 10x FY21F P/E, with
relatively high upside potential, DBS reiterated the "buy" rating with
target price of HK$7.
- End -
About China New Higher Education Group Limited:
China New Higher Education Group Limited is a leading private higher
education group in China with nearly 21 years of education industry
experience, specializing in providing higher education. The Group endeavors
to help each student maximize their potential and live their life to the
fullest. Since 2009, the Group has been operating schools in different
provinces and regions, and its current school network covers 7 provinces in
China, including Yunnan, Heilongjiang, Hubei, Gansu, Guizhou, Henan, and
Guangxi.
The Group provides high-quality higher education in a wide selection of
fields in applied sciences. Its courses are designed to equip students with
practical and readily applicable skills, helping to prepare them for the job
market. As a leader in high-quality employment, the Group won the title of
the Top 50 National Employment of the MOE, with an average employment rate
of above 97%. The Group became a constituent stock of the Hang Seng
Composite Small Cap Index and the Hang Seng Consumer Goods & Services Index
in the Hang Seng Composite Index Series in August 2017, and was included as
a constituent stock of the MSCI China Small Cap Index in November 2017 and
included as a constituent stock of Shenzhen and Hong Kong Stock Connect in
March 2018.
This press release is distributed by Wonderful Sky Financial Group Limited
on behalf of China New Higher Education Group Limited.
For further information, please contact:
Wonderful Sky Financial Group Limited
Aileen Wang / Sandy Bai
Tel: (852) 3970 2226/ (852) 3970 2221
Email: newhigheredu@wsfg.hk
File: Highest Target Price Reached HK$8.40 Stable Growth with Promising
Prospect, China New Higher Education Group Favored by the Market [2]
31/12/2020 Dissemination of a Marketing Press Release, transmitted by EQS
Group.
The issuer is solely responsible for the content of this announcement.
Media archive at www.todayir.com
1: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=a2ab9b8b2b489278862468e756167a33&application_id=1157989&site_id=vwd&application_name=news
2: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=c119e246bb338cb40aa9c29dbbe953b7&application_id=1157989&site_id=vwd&application_name=news
(END) Dow Jones Newswires
December 30, 2020 20:44 ET (01:44 GMT)
© 2020 Dow Jones News
