China Public Education (002607) 2019 Annual Results Preview Comment: Triple Growth Moat Continues to Assist in Performance Growth

China Public Education (002607) 2019 Annual Results Preview Comment: Triple Growth Moat Continues to Assist in Performance Growth

Description of the event Zhong Gong Education released the 2019 annual performance forecast to achieve net profit attributable to mothers.

20,000 yuan?

2 trillion, with an increase of 49.


86%, the growth rate of 53.


In the fourth quarter alone, net profit attributable to mothers was 7.

60,000 yuan?

600 million, an increase of 24.


80%, growth center 32.


Event commentary In terms of traditional main business, recruiting demand rebounded, the company combined teaching and research advantages, national channel layout advantages and efficient management advantages, responded to demand rebounds, achieved revenue, performance growth, and consolidated the industry’s leading scale.

Taking the teacher qualification exam as an example, the number of enrolled students in 2019 is 8.8 million, an increase of 35%. Among them, the number of enrollments in the first half of 2019 is 2.9 million, an increase of 42%, and the number of enrollments in the second half of 2019 is 5.9 million, an increase of 32%.

New business such as postgraduate entrance examination and IT development has progressed smoothly. The company actively invests in development, teacher recruitment and training, and construction of a one-stop learning base to cultivate new performance growth points for the company.

The postgraduate entrance enthusiasm continues, with 3.4 million applicants for postgraduate entrance examinations in 2019, an increase of 17%, and a record high in nearly 10 years.

Since 2019, the company has made larger-scale investments in new track-level strategic categories such as postgraduate research and IT, including research and development and the recruitment of teachers.

In terms of channels, while the directly operated stores are sinking, they are actively exploring the base model.

The Air Force, three quarterly reports show that the Zhonggong Group and its wholly-owned subsidiary Beijing Zhonggong on September 27, 2019 at a total price of 2.

2.8 billion successfully bid for 1,321 acres of land and ground objects in Jiyang County, Jinan City, Shandong Province, of which 1221 acres shot by Beijing Zhonggong will be used for the construction of vocational education comprehensive facilities such as one-stop learning bases, and 100 acres of Zhonggong Group will be used to build ZhonggongBooks intelligent warehouse headquarters.

Looking forward to 2020, the unified recruitment of civil servants and public institutions will grow steadily. In 2020, the number of recruits for the national examination will increase by 66% to 2.

40,000, with 143 reviewers.

70,000, the average competition ratio is 60: 1; the teacher sequence will maintain a rapid growth, and sinking and decentralized examination recruitment 深圳桑拿网 such as grassroots public services will gradually become a force for the development of the recruitment training market.

Zhonggong Education has been deeply cultivating the industry for more than 20 years, grasping the characteristics of decentralized industry needs, practicing internal skills, building a moat for research and development, channels and management, and promoting the sustainable high growth of the company’s performance.

It is estimated that the 2020-2021 results will be 2.5 billion and 3.4 billion, respectively, corresponding to the current expected PE of 43 and 32 times, maintain the buy rating.

Risk Warning: 1.

Major changes have taken place in vocational education and training industry policies; 2.

The business development and the development of the base model fell short of 天津夜网 expectations.