国泰君安:供给出清、转型推进 教培龙头开启修复

Guotai Junan: Clear supply, promote transformation, lead education and training, and start restoration

Zhitong Finance ·  Feb 21 21:36

The Zhitong Finance App learned that Guotai Junan released a research report saying that the education and training sector is steadily returning to standardized development, focusing on the release of performance and boosting valuation. With the gradual introduction of rules at the executive level, clarification of penalty rules and supervisory subjects, and gradual entry into normalized classification and supervision; the education industry is stabilizing and trending upward. Currently, it has strong and scarce operational resilience, and sector valuations are expected to be boosted.

▍ Guotai Junan's main views are as follows:

Clear supervision, offline recovery, and literacy transformation are three factors driving the steady improvement of the training market.

After the “double reduction” policy in 2021, the education and training industry entered a period of regulatory adjustment, and compliance is a major trend. Benefits: ① Clarify penalty rules and supervisors at the policy implementation level, enter normalized classification and supervision, and return to standardized development; ② offline teaching scenarios have been restored, and existing high school businesses have been optimized and the competitive pattern has been optimized and steadily restored; ③ literacy transformation and the steady growth of new license licensing businesses. Three factors have driven the steady increase in the size of the education and training market.

Education and training are in high demand and are resilient, and have the ability to withstand cycles.

Judging from the review of the overseas development history of Britain and the US, at a stage where the economic impact is obvious, the education industry often shows a more prominent countercyclical nature. Demand for education is still strong, covering the age group 0 to 22 years old and covering a wide range of people. The market needs of all school age groups are strong and the penetration rate is high. According to Frost & Sullivan's pre-“ double reduction” forecast data, the K12 subject training market is expected to be 601 billion dollars in 2022; after considering the impact of the “double reduction”, the corresponding market size is estimated to shrink to 66.4 billion yuan; the quality education demand will increase in penetration rate. According to the forecast data of the Multi-Whale Education Research Institute, the quality education market is expected to reach 478.7 billion yuan in 2023, and the market will expand rapidly.

Benefiting from the clear supply of the industry and the results of transformation, leading performance has been steadily restored.

The supply side was drastically cleared, and subject training institutions were reduced by 90%; various education and training companies shut down and divested the K9 subject training business. Leading companies that operate in legal compliance have plenty of cash in hand, have excellent management quality, and are actively transforming in the direction of vocational education, quality education, hardware, and live streaming delivery. The new high school and literacy training business has benefited from the improvement in the competitive pattern brought about by the sharp clearance of supply in the industry, the return of outlets to orderly growth, and the release of store operating leverage to drive performance recovery beyond expectations.

Risk warning:

Risks such as stricter policies and increased competition in the industry.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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