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Zhonggong Education (002607) Company Comment: Public Institutions with Performance in Accordance with Expectations

Zhonggong Education (002607) Company Comment: Public Institutions with Performance in Accordance with Expectations

Event: The company released three quarterly reports and achieved revenue 61 in the first three quarters.

5.9 billion, an increase of 47.

67%, net profit attributable to mother 9.

5.9 billion, an increase of 77.

15%; Q3 achieved revenue of 25 in a single quarter.

2.2 billion, an increase of 46.

08%; net profit attributable to mother 4.

6.6 billion, an increase of 41.


Opinions: Teachers, IT, postgraduate entrance examinations have a high growth rate, and public institutions are picking up.

The company gradually realized revenue in the first three quarters of 61.

5.9 billion, an increase of 47.

67%, of which Q1-3 achieved revenue of 13 respectively.

12, 23.

25, 25.

2.2 billion, the annual growth rate is 61%, 42%, 46%.

Judging from the sequence, it is expected that teachers, postgraduate entrance examinations, and IT sequences will maintain a high-speed growth of more than 50%; the sequence of public institutions will fade due to the short-term impact of classification reform, and Q3 is expected to pick up.

Accounts received in advance as of September 39.

180,000 yuan, the basis for subsequent quarterly revenue growth.

Under the effect of scale, the gross profit margin increased slightly, and the expense ratio decreased slightly during the period.

The gross profit margin in the first three quarters reached 57.

61% (+1.

1pc), the rate of the period is 40.

37% (-2.

51pct), with a sales expense ratio of 17.

55% (-1.

54 points), management expense ratio 13.

45% (-2.

84 points), R & D expense ratio 8.

31% (+0.

72 points), financial expense ratio 1.

06% (+1.

15 pct), showing that scale effects are continuously released and management energy efficiency is improved.

Net profit attributable to mothers increased by 77%, and it is estimated that there is not much problem in fulfilling performance commitments each year.

The first three quarters gradually realized net profit attributable to mothers.

5.9 billion, an increase of 77.

15%, net interest rate 15.

57% (+2.59 points).

Among them, Q1-3 achieves net return to mother, respectively.

06, 3.

87, 4.

6.6 billion, the previous growth rates were turning losses, 47%, 42%.

Initially, it is expected that the performance of 1.3 billion bets will be small (18Q4 net profit 6).

1.2 billion, even more than 19Q4 without growth, the expected performance is also more than 1.3 billion).

The positive test industry is expected to be reflected in performance next year.

The short-term impact of institutional reforms has subsided.

40,000, an increase of 66%, and the number of people who passed the qualification examination reached 143.

70,000, with an increase of 4.


The industry is expected to feedback on performance indicators next year (this year’s national examination written test time is 苏州夜网论坛 November 24th, the written test results will be announced in January next year, and the interview time is February next year).

Investment suggestion: The growth rate of performance is in line with expectations, and the number of enrolled students in the 20-year national examinations has further rebounded. As an absolute leader in the public examination industry, CCP can continue to benefit.

Maintain 19/20/21 net profit attributable to mother 17.



9.6 billion, with a budget benefit of zero.



57 yuan / share profit forecast.

The current market value is expected to be 114.7 billion, and the corresponding 20/21 estimate is 46x / 33x.

Risk Warning: The number of trainees in the civil service and public institutions failed to meet expectations; the new track expansion did not meet expectations.