The 2023 annual forecast of Lianhua**A-shares has been released one after another, and the "report card" of education listed companies in the past whole year has surfaced. Judging from the data, the overall performance has been steadily restored, but the track is significantly differentiated, and the company's operation is mixed.
According to incomplete statistics from interface education, among the 18 listed companies with education as their main business or including education business, the number of profits and losses accounted for half, of which four turned from profit to loss, and four achieved profit growth.
2023 Education A-share performance forecast data.
The "seasonality" of public examination training
The subdivision of vocational education is extremely fragmented, and the operating performance of companies in the track varies due to the economic environment of different industries. In particular, vocational education companies whose main business is public examination training are also affected by seasonal factors.
Generally speaking, November and December are neither the peak period for the release of various recruitment announcements, nor the peak season for recruiting new students throughout the year. "Huatu Shanding (300492SZ) in an explanation of the pre-loss in performance. In November 2023, the company launched non-academic training business through its wholly-owned subsidiary, Huatu Education.
Zhonggong Education (002607.)SZ) and Huatu Shanding are expected to lose 17.5 billion - 22.5 billion yuan, 58 million to 100 million yuan, the former significantly reduced the loss by 84 compared with last year12%-79.58%, the latter turned from profit to loss, with a profit of 10.93 million yuan in the same period last year.
In addition to the national examination training, the provincial examination training is the highlight of various public examination education and training enterprises. However, the written test of the provincial examination in 2024 has been postponed compared with 2023, and some enrollment and teaching activities that were originally to be carried out in the fourth quarter have been postponed.
Both companies mentioned that some course orders had not been delivered in the fourth quarter and had not met the conditions for revenue recognition, and the corresponding advance receipts were reflected in the balance of contract liabilities at the end of the year. On the other hand, the cost of delivery is recognized according to the actual occurrence, and the time point of cost recognition is generally earlier than the time point of revenue recognition.
As of December 31, 2023, Huatu's contract liabilities exceeded 200 million yuan, and it is expected that those that meet the conditions for revenue recognition will gradually be converted into revenue with the completion of course delivery in the future.
In addition, one-time influencing factors such as asset impairment losses and reversal of deferred income tax assets are also the main reasons for the 2023 annual performance loss.
In order to boost employee confidence, Zhonggong Education recently disclosed the first incentive plan for the first time, and 260 core backbone personnel will receive a total of 40 million shares, accounting for about 065%, and the performance assessment target is to achieve annual revenue of 4 billion yuan and 4.6 billion yuan respectively.
Haitong ** said that from the perspective of the industry, the number of recruits and applicants for the 2024 national examination, as well as the number of applicants for the postgraduate entrance examination, will hit a record high, and it is expected that the demand for related training industries will remain strong in the context of the increase in the popularity of the national examination.
Chuanzhi Education (003032., which is also located in the vocational education trackSZ), Kede Education (300192SZ) are profitable, and the former is mainly engaged in vocational training for IT digital talents, with an estimated annual profit of 11.5 million to 16.5 million yuan, a year-on-year decrease of more than 90%. The latter divested the K12 business Longmen Education and focused on secondary vocational education, and is expected to have a net profit of 1 last year200 million-1500 million yuan, a year-on-year increase of 6199%-102.49%。
In April 2023, Kede Education invested 1300 million yuan to participate in the artificial intelligence company Zhonghao Xinying, Zhonghao is responsible for the research and development of training content, revision and development of interface applications for users to use, such as ChatGPT prompt engineers and large model development course training, Kede is responsible for training planning, landing, marketing and promotion.
Oriental Fashion (603377., a vocational education company in three vertical fieldsSH), China Hi-Tech (600730SH), Kaiyuan Education (300338.)SZ) is mainly engaged in driving test training, medical vocational education, and financial vocational training, and is expected to have a net loss of 28.1 billion - 34.4 billion, 2.88 million to 1.92 million, 70 million to 98 million yuan.
In the first quarter, the enrollment and training were not as good as in previous years, and the growth rate of Oriental Fashion's main business income did not meet expectations, and the loss increased by 550 year-on-year71%-696.6%。China Hi-Tech also attributed the loss to the impairment loss of its subsidiary Inther Education, which is initially estimated to be about 10 million yuan.
While Kaiyuan Education's revenue in 2023 will decline sharply, there will be two major expenses - equity incentive expenses of 33.5 million yuan and income tax expenses of 33 million yuan, resulting in a profit of 33.77 million yuan in 2022.
The "polarization" of the K12 transformation
After the "double reduction", the performance of education companies that have successively divested K9 subject training is significantly differentiated, and some of them have a good transformation trend to maintain profitability; Some are not doing well or are facing delisting.
Xueda Education (000526.)SZ) handed over a performance forecast with the highest net profit in recent years, even exceeding the level before the "double reduction", and is expected to make a profit of 1300 million-16.5 billion yuan, a significant increase of 1093 year-on-year88%-1415.3%。
One-on-one training was the label of Xueda Education in the past, and now its transformation direction is diversified, in addition to traditional education and training, it is also involved in cultural reading, medical education and health integration and other subdivisions that leading education companies rarely set foot in.
Among them, the full-time training business for college entrance examination repeaters, art candidates and other groups is the earliest transformation direction of Xueda Education after the "double reduction", and it is expected to become the second growth curve after a certain development cycle.
"Academic qualification" secondary vocational education opens up the imagination space for mid-line growth. At present, Xueda Education's secondary vocational colleges include Datongcai Secondary Vocational and Technical School, Datongcai Computer Vocational School, Shenyang International Business School and Dongguan Dingwen Vocational and Technical School, which are 80% owned by the organizers.
In the secondary market, the share price of Xueda Education has been rising, doubling its share price throughout last year, hitting a new high of the year on December 14, once touching 57 yuan shares. As of midday on February 2 this year, Xueda reported 4651 yuan shares, up more than 7% in a single day.
In contrast, Onlly Education (600661SH) is relatively difficult, with a loss of 15.3 billion - 22.7 billion yuan, with a net profit of 1 in 20226.8 billion yuan, a year-on-year change from profit to loss.
In the process of transforming quality education, Onlly Education said that "the investment in the early stage of business development is large", and the related costs and expenses have increased due to the new opening of campuses and new employees, resulting in losses.
In addition, the amortization of share expenses paid to employees was about 46.8 million yuan, and the fair value change loss of about 25.16 million yuan was provided for the holding of Jiaoda Onlly**. In 2023, due to **15.96 million shares of Jiaoda Onlly shares, there will be an investment loss of about 5.81 million yuan on profits.
In the past year, the life of quality education enterprises has not been easy, and the quality education and training institutions represented by Orange Tree Art, Swan Lakeside, and Kinetic Sports have fallen one after another. "Pianos are abandoned by middle-class families" remarks spread from time to time, two listed companies with piano sales and art training as their main business - Hailun Piano (300329SZ), Pearl River Piano (002678SZ) also did not do well.
The economic situation of the domestic and foreign markets is sluggish, and the piano consumer market has shrunk significantly. Helen Piano expects to earn 2900 million-3100 million yuan, a year-on-year decrease of 1825%-23.52%；The estimated loss is 60 million to 80 million yuan, a year-on-year change from profit to loss. Pearl River Piano is expected to make a profit of 3.85 million to 5 million yuan in 2023, which is 1 percent higher than the profit in 20222.3 billion yuan, a year-on-year decrease of more than ninety.
In addition, after the state introduced the "double reduction" policy, local education departments have also introduced corresponding after-school care classes, delayed school and other policies, resulting in a shorter time for students' art training, and the training business of these quality education enterprises has also been seriously affected.
Doushen Education (300010.)SZ), Meijim (002621SZ) also has its own worries, the former transformation has not improved, and the risk of being "ST" has not been lifted so far; The latter has closed offline centers in many places, and is deeply involved in the ** dispute over student refunds.
Doushen and Meijim are expected to lose 3 in 2023200 million-3800 million, 6700 million-9300 million yuan, the former reduced its loss by 45%-53% year-on-year, and the latter increased its loss by 52%-111% year-on-year.
In the past year, Meijim has been under a lot of pressure, on the one hand, facing changes in the operation of commercial complexes, financial pressure on franchisees, and personnel loss; On the other hand, the declining birth rate and the decrease in the number of newborns have also affected the expansion of the early education center market.
As of December 31, 2023, the number of early education centers contracted by Meijim and Little Jim decreased by 198 compared with the end of the previous year.
Under the pressure of rent and salary payment, the cash flow of Meijim centers across the country has become tighter than that of previous years, and provision for bad debts has been made1800 million to 200 million yuan, and the impairment of Tianjin Meijiem's goodwill was 7200 million-10800 million yuan, and the overdue interest is about 76.65 million yuan.
If the audited year-end net assets in 2023 are negative, MGM may face the same fate as Doushen Education - being named ST and at risk of delisting.
The informatization of education is eye-catching.
The education informatization company that takes the "east wind" of the new education infrastructure, and the "report card" is relatively bright.
Two leading enterprises in China for educational interactive large screens - CVTE (002841SZ), Hitevision Technology (002955SZ) is expected to make a profit of 14700 million, 3200 million-3300 million yuan, down %-18% year-on-year.
Affected by factors such as industry competition, CVTE said that its revenue fell by 8 percent year-on-year77%, but the revenue of software and hardware products such as educational PCs, recording and broadcasting, and Xiwo Rubik's Cube digital base has achieved rapid growth. According to the report of a third-party consulting agency, the market share of Xiwo interactive intelligent tablet is the first in the industry.
iFLYTEK (002230.)SZ) accounted for more than 30% of the annual revenue in 2023. Among them, the G-end (**-end) education business is affected by the economic environment and fiscal expenditure, resulting in a shortage of funds, and the proportion will drop from 40% in 2022 to 31%; The sales of hardware products such as AI learning machines, and software such as YiListening and Speaking, and Spark Companion will increase from 30% in 2022 to 41% in 2023.
Jayfat Education (300559.)SZ), Jingyeda (003005SZ) are all profitable, and the net profit in 2023 is expected to be 13.5 billion - 15.5 billion yuan, 8 million to 11.5 million yuan, the former increased by 95 percent year-on-year79%-124.8%, the latter decreased by 78%-85% year-on-year.
Jayfa Education attributed the significant profit to the growth of orders in both the Smart Test and Smart Education businesses. In October last year, the company also released the "Lingqi Education Model" and AI series products, trying to use artificial intelligence in teaching, learning, testing, evaluation, practice, examination, management and other links.
In the past years, the growth rate of the education informatization market has been slightly higher than the growth rate of nominal GDP, which is in line with the trend of China's first investment in education spending. In the research report, the League of Nations pointed out that with the advocacy of the industry and the support of all localities, the industry is still expected to maintain growth that matches the growth rate of the total economy in the next few years.
According to the Huajing Industry Research Institute**, the market size of education informatization has reached 500 billion in 2021. The current hot large-model AI technology is also expected to help C-end equipment services improve their product strength, the industry penetration rate is expected to increase rapidly, and the competitive landscape may face reshaping.
However, the education informatization market is "big but slow", and the product iteration is rapid and homogeneous. Morgan Stanley also mentioned that it is not easy for educational information products to penetrate schools, and doing business with public schools requires establishing a good relationship with local **, and cross-regional expansion is challenging.