Zhonggong Education (002607) 2019 First Quarterly Report Review: Operating Profit Margin Continues to Improve
CCP Education released the financial report for the first quarter of 2019, with actual income13.
110 thousand yuan, +61 year-on-year.
93%; net profit attributable to mother 1.
06 million yuan, an average of 51.94 million yuan in the same period last year;
08 million yuan, an average of 50.79 million yuan in the same period last year.
The operating profit margin continued to improve, and the effect of scale was reflected.
FY19Q1, the company’s operating cost is YOY + 51.
01% reached 5.
48 ppm, the increase in operating costs due to the expansion of operating scale; selling expenses YOY + 27.
71% reached 2.
89 trillion, management expenses +19.
28% reached 2.
2.2 billion yuan, R & D expenses YOY + 22.
35% reached 1.
The average growth rate of the three expenses is lower than the growth rate of revenue, and the scale effect is reflected.
66% reached 37.72 million, mainly due to the increase in short-term borrowings.
At the core of the report, the company’s operating profit margin reached 10.
01%, only -6 in the same period last year.
41%, continuing the trend of FY18, with obvious improvements many times.
The healthy inflow of operating cash gradually incurred large expenditures on investment activities.
The number of reports shows that CPG’s cash and equivalents decreased by one.
1.7 billion, of which operating cash flow is very healthy, YOY + 17.
95% reached 24.
2.3 billion; and cash flow from investment activities -28.
8.2 billion, mainly due to net payments from investments28.
9.1 billion yuan; cash from financing activities was 16.94 million yuan.
Returning to the balance sheet account, we see that (1) short-term borrowings increased by 3.
6 billion to 19.
(2) The company’s transactional financial assets + bond investments + other current and non-current assets reached 70 in the current period.
9.3 billion, with only other current and non-current assets at the end of last year41.
6.8 billion (adjusted through new financial instruments, so we will combine and compare the subjects involved), investment-related subjects increased significantly.
(3) Overall, as of March 31, 2019, the company’s budget for advance receipt QOQ + 127.
08% reached 43.
6 billion; as advance receipts mainly come from tuition fees that have not yet been confirmed, triple-digit advance receipt growth has some basis for the beautiful performance in 2019.
Continuously consolidate the core resources of the channel, and the policy is favorable to the business sequence of non-public job examinations.
The channel network 苏州夜网论坛 is one of the core resources of Zhonggong Education. The continuous expansion and sinking is an important driving force for the company’s development. In the future, the company will expand the county-level learning center.
As of 2018, the company has 701 direct learning center outlets in 319 prefectures and cities, an increase of 119 from the same period last year.On April 30, 2019, the National People’s Congress of Japan determined measures to use the balance of 100 billion unemployment insurance funds to implement vocational skills improvement actions to improve the quality of workers and employment and entrepreneurship, and support enterprises and social training institutions to conduct skills training;The channel network, the business sequence of the non-public service examinations of China Education may benefit, and also 杭州夜网论坛 help the company optimize its income structure.
[Investment suggestion]Zhonggong Education is a leader in vocational education with teaching outlets all over the country.
As the company’s increased investment leads to changes in the asset structure, we maintain our revenue forecast and raise our profit forecast (mainly due to the increase in investment income). We expect operating income for the year 19/20/21 to be 85.
8.7 billion, net profit attributable to mother 15.
56 trillion, corresponding to a price-earnings ratio of 50.
23 times, maintaining the “overweight” level.
[Risk Tips]The number of students is growing less than expected; tuition fees are growing less than expected; industry policy risks.