The Zhitong Finance App learned that CaiTong Securities released a research report saying that the public service examination and training industry is expected to maintain a high boom for a long time, and the recruitment volume for public jobs is expected to rise steadily from 1.5 million in 2024; the number of fresh graduates applying for the exam will reach 11.79 million in 2024, and is expected to remain at 110-12 million in the future. In the short term, the joint provincial examination and the written examination for public institutions ended in March. The written test results will be released one after another after mid-April. The interview course training will usher in a peak in enrollment. It is expected that major companies will have a high degree of certainty in Q2 performance. Benefiting from the expansion of supply and the release of application demand, leading public service candidates are expected to benefit. It is recommended to focus on Huatushanding (300492.SZ), chalk (02469), and Chinese public education (002607.SZ).
The views of CaiTong Securities are as follows:
The size of public officials in the broad sense: An estimate of 50 to 60 million public officials in the general sense of the word in China (2022).
At the end of 2022, the composition was as follows: ① The number of people employed in public administration and social organizations in urban non-private units in China reached 1985.78 million, including over 7 million civil servants and 1.35 million community social workers; ② The number of people employed in education, health, science and technology, and culture was 1950.62, 1114.50, 455.81, and 1.465 million, respectively, for a total of 36.6744 million people.
Number of people recruited for public service positions: It is estimated that the number of people recruited for public service positions in China exceeds 1.5 million (2024).
The number of civil servants (national examination/provincial examination channel), public institutions, community social workers, and military civilians recruited in 2024 is around 1.4 million. Considering other channels, the total number of people recruited is expected to exceed 1.5 million. The number of people recruited for public service positions is expected to rise steadily in the future. The main reasons are: ① The population aged 55 and above is nearing retirement; in 2022, the population aged 55 to 59 will account for 8.14%, and there is a high demand for job changes; ② the supply of public sector jobs will be expanded in many places to guarantee employment; in 2024, target cities will add more than 12 million new jobs, and various regions have begun to expand policy jobs after the 14th Five-Year Plan.
Number of applicants for public service positions & market size: It is conservatively estimated that the number of applicants for public service positions in China is 6-7 million (2024).
In 2024, it is estimated that there will be 3 million applicants for the civil service national examination, 5.7 million for the joint provincial examination, 720,000 for the military civil service examination, 720,000 for the military civil service examination, joint examination/unified examination/independent examination, etc. However, due to similar examination subjects, the number of applicants overlaps, so it is conservatively estimated that the total number of applicants will be 6-7 million per year. It is estimated that the offline penetration rate of public service examinations and training is 20%-30%. Online apps have achieved full coverage. China's recruitment and training market size is about 40 billion yuan (2024), of which the civil service, public institutions, and other recruitment and training markets are 270/100/3-4 billion yuan respectively.
Short-term factors:
1) Catalyzed for the peak Q1/Q2 exam season: The written examination for the provincial joint examination and the joint examination of public institutions will end in March. The written test results will be released one after another after mid-April. The interview course training will usher in a peak enrollment. It is expected that the Q2 performance of major companies will be highly certain.
2) Increase in the participation rate of fresh graduates: In 2024, the number of fresh graduates will reach 11.79 million, an increase of 210,000 over the previous year. Competition for social positions will increase, students will focus on opportunities to edit public examinations, and participate more in training to enhance their competitiveness.
Medium- to long-term factors:
1) The market share of the leading companies has clearly rebounded within 2-3 years: the three leading companies have reduced personnel in the past two years, leading to more small and medium-sized institutions. Small and medium-sized institutions have limited capital, teaching and research capabilities, there are obvious shortcomings in long-term product development, and there is a disadvantage in competition with large institutions. The proportion of fresh graduates participating in public examinations has increased, and there is relatively plenty of time to participate in the training of long-cycle products. Leading institutions are increasing base class construction and developing long-term products to meet the needs of candidate groups.
2) Overall participation rate increase: In recent years, many provincial public service examinations have relaxed restrictions on the status of corresponding graduates, attracting reference from students who have graduated 1-2 years ago. The number of applicants who have graduated has expanded, and there is an upward trend in registration ratios. Competition for jobs will increase, and the candidate participation rate is expected to increase.
3) Increased customer unit prices: Leading institutions have launched long-term products one after another. At the same time, in the past two years, the industry adjusted products in response to agreement classes, and the actual revenue share has increased markedly, all of which are conducive to increasing customer unit prices and improving profitability.
Risk warning: Increased market competition, stricter industry regulations, fluctuating recruitment and training demand.