CICC lowered China Oriental Education (00667)'s 2024 revenue/adjusted net profit of 9%/51% to 43.4/369 million yuan.
The Zhitong Finance App learned that CICC released a research report stating that it maintained the China Oriental Education (00667) “outperforming the industry” rating and lowered 2024 revenue/adjusted net profit 9%/51% to 43.4/369 million yuan; introduced a 2025 revenue/adjusted net profit forecast of 46.3/389 million yuan, and lowered the target price by 13% to HK$3.5 million, taking into account enrollment uncertainty and rigid cost expenses under macro headwinds. The company's 2023 revenue and adjusted net profit fell short of the market's agreed expectations. We announced a dividend payout of HK$0.2 per share (total HK$436 million) at the end of 2023, corresponding to a dividend yield of 145% and a dividend yield of 8%.
According to the report, by the end of 2023, the company had 255 schools and centers (+1 year on year), and the number of new students enrolled increased 13.8% year on year (average number of trainees increased 2.9% year on year). In 2023, see by section: 1) Cooking: New Oriental cooking income/number of new students -1%/+14% year over year, Omic income/number of new students enrolled +12%/+23% year over year. The bank expects the restaurant chain rate to increase or increase the degree of dependence of enterprises on school-trained chefs; 2) Automobile: Wantong Auto's revenue/number of new students enrolled is +17.8%/+18.5%; according to management, the company's automotive specialty has expanded from a single sector to general fields such as transportation, large machinery and electronics, and intelligent manufacturing, and the number of relevant students accounts for 40% of the automotive sector.
3) IT: Xinhua computer revenue/number of new students enrolled was -5%/+1.5%, and its performance was weaker than other sectors due to a decrease in general IT demand under macro headwinds; 4) Beauty industry: Ormandi's revenue/number of new students enrolled +43/ +21% year over year; management said that enrollment in related majors is very popular, and Chengdu Art School has already achieved profit in 2023. In the future, it is planned to establish 3-4 new beauty schools every year. Management's performance will be shared. The late Spring Festival in 2024 led to a sharp year-on-year reduction in the spring recruitment cycle. Up to now, the company's lunar spring recruitment has driven a 10% year-on-year increase in revenue; the 2024 revenue is expected to increase 10% year-on-year.