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Leading the education and informationization, the new college entrance examination promotes new growth

Westdollar.com November 09, 2018 00:00 Changjiang Securities Ma Xianwen, Liu Huihui View original PDF

Jiafa Education (300559)

Report highlights

Education test informationization: upgrade + extension, vertical and horizontal open new growth

Jiafa Education is the leading information-based education test. The audio collection equipment covers more than 8,000 high school schools across the country. The market share is about 60% and the market distribution in the country is relatively balanced, reflecting the comprehensive competitiveness of the company's products. We believe that in recent years, the company's education examination information business has developed in both vertical and horizontal directions: Vertically, policy requirements should be set up to build examination and examination platforms at all levels, with the first generation of online inspection system upgrades, emergency command, identity certification, and cheating prevention and control. The incremental construction of the system is the main one, and the conservative calculation will bring about 5 billion yuan market. The company is expected to receive an income increase of 2.5 billion yuan in the next 3 to 5 years; horizontally, it will focus on the construction of standardized test sites for high school level examinations (estimated to produce about 25 Incremental market of 100 million yuan, superimposed informatization needs such as the senior high school entrance examination, the human society examination, and the junior high school level examination. As a leading enterprise in the education and informationization of the education, the company is expected to enhance the Matthew effect and achieve rapid replication and expansion of products.

Wisdom education: The new college entrance examination opened the information blue ocean, and the cloud products series expanded rapidly. In September 2014, the college entrance examination reform was opened. Nearly half of the provinces and municipalities have started the new college entrance examination. After the implementation of the education reform, the student college entrance examination has become “extra-lingual +3 (choice)”, and there are usually 20 combinations of courses. During the period, students are involved in the selection and training process, which brings many problems and challenges to the school, teachers, students, parents and managers. The randomness of course selection leads to the need to fully consider the objective conditions of the education curriculum plan, teacher strength and teaching venue to ensure the efficiency of the teaching management process. The original "manual pull excel method" or traditional course scheduling software is difficult to meet the complex and diverse needs, and the shift scheduling system has basically become "incremental just needed." In addition to strong demand products such as academic career planning and comprehensive quality evaluation, the incremental market brought by the new college entrance examination policy is expected to reach 2.79 billion yuan/year in 2022, and the total market space in five years is about 10 billion.

At present, the incremental informationization market brought by the new college entrance examination is in the initial stage, the pattern is relatively scattered, and the regionalization characteristics are more obvious. Considering the limited technical barriers to the basic needs of shifting classes, channel capabilities, product capabilities, and service capabilities will be important factors in determining future market share, which is the advantage of Jiafa Education. In the future, with the new college entrance examination reform in the schools of various provinces, combined with the company's multi-dimensional promotion strategy, and with the "walking class scheduling" module card position, follow-up schools will increase home-school interaction, academic career planning, comprehensive quality evaluation Wait for more rich types of modules to achieve the company's product price and price. The company plans to cover 300, 1,300, and 5,000 schools in 2018-2020. If this goal is successfully completed, it will effectively boost the rapid growth of performance.

Earnings Forecast and Valuation: It is estimated that the company will realize net profit of RMB 140 million, RMB 208 million and RMB 307 million respectively from 2018 to 2020, corresponding to EPS of RMB 1, RMB 1.49 and RMB 2.2 respectively, corresponding to PE of 39 times. , 26x, 18x, giving a “Buy” rating.

Risk warning: 1. Risk of increased market competition;

2. The progress of the implementation of the new college entrance examination reform is less than expected.

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Jiafa Education Fundamental Data
  • Total share capital 140 million shares
  • Circulating shares of 0.76 billion shares
  • Earnings per share 0.55 yuan
  • Undistributed profit per share 2.20 yuan
  • Net assets per share 5.16 yuan
  • Return on equity 10.95%
  • Net profit of 7713.28 million
  • Net profit growth rate of 94.55%
Jiafa Education Investment Rating
Overall rating in January
Overall rating in March
Statistical period Buy Overweight neutral Reduction Sell total
Within one month200002
Within three months210003
Within six months310004
Within a year310004
Jiafa Education Profit Forecast
                                index 2017A 2018E 2019E 2020E
Earnings per share (yuan) 0.52 1.01 1.44 2.00
Net profit (100 million yuan) 0.73 1.41 2.02 2.81
name Quote change Number of research reports Institutional investment rating (nearly six months)
Buy Overweight neutral Reduction Sell
Advanced data communication 10.03% 0 0 0 0 0 0
Zhengyuan wisdom 10.01% 0 0 0 0 0 0
Longxin Technology 10.01% 0 0 0 0 0 0
Yuxin Technology 9.99% 0 0 0 0 0 0
Zhongfu Information 7.53% 3 3 0 0 0 0
Nantian Information 5.98% 1 0 1 0 0 0
Huali Chuangtong 5.80% 9 4 4 1 0 0
Zhao Yi Innovation 5.63% 14 7 6 1 0 0
Hengtai Shida 4.78% 2 1 1 0 0 0
Jiadu Technology 4.62% 5 2 3 0 0 0
Information development 4.29% 0 0 0 0 0 0
Tuowei Information 4.18% 0 0 0 0 0 0
Nanwei Software 4.10% 3 2 1 0 0 0
Yinjiang shares 3.96% 0 0 0 0 0 0
*ST rich control 3.92% 0 0 0 0 0 0
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