Huatai Securities Sticks to Their Buy Rating for China New Higher Education Group Ltd (2001)

Huatai Securities analyst maintained a Buy rating on China New Higher Education Group Ltd with a price target of HK$1.81. The analyst consensus is Moderate Buy with the same price target.

NEW HIGHER EDU reported a net profit of 829 million RMB for the year, an increase of 9.7%, with no dividend distribution

NEW HIGHER EDU announced its financial results for the fiscal year ending in August, with total revenue of RMB 3.071 billion, an increase of 8.1% year-on-year. It recorded a net profit of RMB 829 million, a growth of 9.7%, with earnings per share of 49 cents. No final dividend will be distributed

Understanding the Market | Education stocks lead the gains, profitability options expected to restart, institutions say the profitability of higher education companies is promising

Education stocks are among the top gainers. As of the time of publication, China East Education rose 5.2% to HKD 6.88; China Edu Group increased by 4.39% to HKD 3.09; Yuhua Edu climbed 3.7% to HKD 0.56; and New Higher Edu Group gained 2.46% to HKD 1.25. Recently, the news that Hunan International Economics University, a subsidiary of Yuhua Edu, is transitioning to a for-profit model has attracted significant attention in the education sector. Shenwan Hongyuan released a research report suggesting to pay attention to Hong Kong-listed higher education companies. The for-profit model is expected to restart, with increased certainty in the distribution of operating income for private colleges, and a recovery in expansion momentum is anticipated. At the same time, a slowdown in educational investment combined with peak capital expenditures is expected to enhance the profitability of higher education companies. Guoyuan International previously published a research report stating that for-profit schools benefit listed companies' dividends, and the distribution of profits alleviates debt. Although the registration for profit-making requires the completion of asset transfers such as land and real estate and the payment of back taxes, which increases short-term costs, it will achieve a long-term market revaluation of assets. Currently, only Yuhua has been approved among listed companies, which will help with sentiment and valuation recovery in the short term. If other listed companies advance in the future, it may lead to a long-term revaluation of the sector

Hong Kong education stocks surged, with Thinking Education once soaring over 22% during the session, leading significantly. CH GENERAL EDU rose over 10%, New Oriental EDU & Tech increased over 6%, CH XINHUA EDU gained 5.6%, and China Science Education Industry rose 4%. Excellence Education Group, NEW HIGHER EDU, Dasha Education, and Jianqiao Education also followed suit

Understanding the Market | Education Stocks Rise Collectively, YUHUA EDU's Colleges Approved for Profit Transition, Institutions Say It Will Boost Sentiment in the Private Education Sector in the Short Term

Education stocks collectively rose, with China East Education up 6.64%, New Higher Edu Group up 5.98%, YUHUA EDU up 3.28%, and CHINA EDU GROUP up 1.88%. YUHUA EDU's Hunan University of Foreign Economics and Trade received approval to transition to a for-profit model. Guoyuan International pointed out that this move has a short-term uplifting effect on the sentiment of the private education sector and may encourage other schools to consider transitioning. For-profit schools help listed companies with dividends; although short-term costs increase, long-term market revaluation of assets will be achieved