Investment Rating - The report recommends focusing on the vocational education company China Oriental Education (00667.HK) due to its strong growth prospects and operational adjustments [12]. Core Insights - The vocational training sector is experiencing an upward trend, driven by an increase in the number of high school graduates who are not entering university, leading to a growing demand for vocational skills training [2][7]. - China Oriental Education has forecasted a significant increase in adjusted net profit for 2025, with a growth rate between 46% and 51%, translating to a profit range of 767 million to 793 million RMB [6][12]. - The company is implementing refined management strategies to enhance operational efficiency, which is expected to result in a gross margin increase of 5.2 percentage points to 56.5% in 2025 [8]. Summary by Sections Market Overview - The education index fell by 3.2% in the week of February 6-12, underperforming the Hang Seng Index by 4.1 percentage points, but has shown a year-to-date increase of 12.86% [5]. Company Updates - China Oriental Education's new training participants are expected to grow by 6% in 2025, contributing to a revenue increase of 12% to 4.61 billion RMB [6][12]. - The company is targeting high school graduates who did not enter university, with a significant increase in the number of such graduates from 119,000 in 2021 to 386,000 in 2024 [7]. Operational Efficiency - The company is focusing on optimizing marketing expenditures and improving school capacity utilization, which is projected to lower the marketing expense ratio by 2.5 percentage points to 21.2% in 2025 [8]. - Management efficiency is also expected to improve, with a projected management expense ratio of 11.2%, down by 1.1 percentage points [8]. Capital Expenditure and Dividends - Capital expenditures are anticipated to decrease by 33.6% to approximately 660 million RMB in 2025, with a high dividend payout ratio expected to yield a dividend yield of 5.6% [9][10]. Investment Recommendations - The report suggests a focus on vocational education companies, particularly China Oriental Education, due to its strong performance forecasts and strategic adjustments to meet the growing demand for vocational training [12].

Investment Rating - The report maintains a "Buy" rating on the overseas education sector, specifically highlighting China Oriental Education as a key investment target [1]. Core Insights - The report indicates a positive outlook for vocational education training, with operational efficiency continuously improving. China Oriental Education is expected to achieve a net profit growth of 46% to 51% in 2025, with adjusted net profit projected between 767 million to 793 million RMB [1][7]. - The vocational training market is anticipated to benefit from an increase in high school graduates who do not enter university, leading to a significant rise in demand for vocational skills training [2][8]. - The company is implementing refined management strategies to enhance operational efficiency, expecting a gross margin increase of 5.2 percentage points to 56.5% in 2025 [3][9]. - Capital expenditures are projected to decline, with a forecast of approximately 660 million RMB in 2025, a decrease of 33.6% year-on-year, while maintaining a high dividend payout ratio [4][10]. Summary by Sections Market Overview - The education index fell by 3.2% in the week of February 6-12, underperforming the Hang Seng Index by 4.1 percentage points. Year-to-date, the education index has risen by 12.86%, outperforming the Hang Seng Index by 9.93 percentage points [6]. Company Updates - China Oriental Education has released a positive profit forecast for 2025, with an expected net profit growth of 46% to 51%, translating to an adjusted net profit of 767 million to 793 million RMB. The company anticipates a 6% increase in new training participants, driving revenue growth to between 12% and 46.1 billion RMB [7][8]. Vocational Training Demand - The vocational training sector is set to experience growth due to a mismatch in university enrollment rates and an increase in high school graduates. The number of high school graduates has risen by 2.6 million from 2021 to 2024, while university enrollment has only increased by 320,000 during the same period [2][8]. Operational Efficiency - The company is expected to continue its lean management approach from 2024, coordinating recruitment across schools to improve capacity utilization. The marketing expense ratio is projected to decrease by 2.5 percentage points to 21.2% in 2025, contributing to a net profit margin increase of 4.4 percentage points to 17.2% [3][9]. Capital Expenditure and Dividends - The company has initiated a vocational education center construction plan, with five out of six centers expected to be completed between 2023 and 2025. The capital expenditure for 2025 is estimated at 660 million RMB, with a high dividend payout ratio suggesting a dividend yield of 5.6% [4][10]. Investment Recommendations - The report recommends focusing on Hong Kong-listed vocational education companies, particularly China Oriental Education, due to its strong growth prospects and operational adjustments aimed at capturing the vocational training demand from high school graduates [13].

Group 1 - China Oriental Education (00667.HK) experienced a stock price increase of over 5%, specifically rising by 5.41% to reach HKD 6.43 [2] - The trading volume for China Oriental Education was reported at HKD 12.4977 million [2]

Core Viewpoint - China Oriental Education (00667) has seen a significant stock price increase of 6.39%, currently trading at HKD 6.49, with a trading volume of HKD 19.758 million. The company anticipates a substantial rise in net profit and adjusted net profit for the fiscal year ending December 31, 2025, with an expected increase of no less than 46% and no more than 51% compared to the fiscal year ending December 31, 2024 [1][5]. Financial Projections - The company expects net profit and adjusted net profit for the fiscal year ending December 31, 2025, to be approximately RMB 5.13 billion and RMB 5.25 billion, respectively, reflecting a growth of at least 46% but not exceeding 51% compared to the previous year [1][5]. - Guosen Securities projects that the company will achieve net profit attributable to shareholders of RMB 7.9 billion, 11.0 billion, and 13.8 billion for the years 2025, 2026, and 2027, respectively, with corresponding growth rates of 53%, 39%, and 26% [1][5]. Business Strategy - The company is focusing on the continuous recovery of its mature professional recruitment and profitability, which is seen as having strong certainty. Additionally, the steady development of emerging programs is expected to replicate successful experiences, creating new growth momentum [1][5].

Core Viewpoint - China Oriental Education (00667) has seen a stock price increase of over 5%, currently at HKD 6.43, with a trading volume of HKD 12.4977 million. The company anticipates a significant increase in net profit and adjusted net profit for the fiscal year ending December 31, 2025, with expected growth of at least 46% but not exceeding 51% compared to the fiscal year ending December 31, 2024 [1] Group 1 - The company expects net profit to increase by approximately RMB 513 million and adjusted net profit to increase by approximately RMB 525 million for the fiscal year ending December 31, 2025 [1] - Guosen Securities believes that the company's mature professional enrollment and profitability recovery have strong certainty, while emerging programs are steadily being developed, which may replicate successful experiences to create new growth momentum [1] - The firm projects that the company will achieve net profit attributable to shareholders of RMB 790 million, 1.1 billion, and 1.38 billion for the years 2025-2027, with growth rates of 53%, 39%, and 26% respectively [1]

Group 1 - The core viewpoint of the article is that China Oriental Education (00667) has seen a significant increase in its stock price, rising over 5% to HKD 6.43, with a trading volume of HKD 12.4977 million [1] - The company anticipates that its net profit and adjusted net profit for the fiscal year ending December 31, 2025, will increase by no less than 46% but not more than 51% compared to the net profit of approximately RMB 513 million and adjusted net profit of approximately RMB 525 million for the fiscal year ending December 31, 2024 [1] - Guosen Securities believes that the company's mature professional enrollment and profitability are showing strong recovery certainty, while its emerging programs are steadily being developed, which may replicate successful experiences to create new growth momentum [1] Group 2 - The firm projects that the company will achieve a net profit attributable to shareholders of RMB 790 million, 1.1 billion, and 1.38 billion for the years 2025-2027, with corresponding growth rates of 53%, 39%, and 26% [1] - The adjustments in profit forecasts are primarily due to the later timing of the 2026 Spring Festival, which has led to an earlier layout for the 2025 Spring recruitment [1]

Core Viewpoint - China Oriental Education has released a positive profit forecast for 2025, expecting adjusted net profit to grow by no less than 46% and no more than 51%, amounting to between 767 million and 793 million yuan [1] Group 1: Financial Performance - The company anticipates a 6% increase in new training participants in 2025, driving revenue growth to between 12% and 46.1 billion yuan [1] - The adjusted net profit margin is expected to rise by 4.4 percentage points to 17.2% in 2025, with an adjusted net profit forecast of 793 million yuan [3] Group 2: Market Trends - The vocational skills training market is expected to see continued growth due to an increase in high school graduates not entering university, with the number of such graduates rising from 119,000 in 2021 to 386,000 in 2024 [2] - The company has launched long-term courses of approximately 15 months, resulting in new enrollment numbers increasing by over 81.1% year-on-year, contributing to a total new enrollment growth rate of 6% [2] Group 3: Operational Efficiency - The company is focusing on refined management practices to enhance operational efficiency, including optimizing marketing expenditure and improving school capacity utilization [3] - Marketing expense ratio is projected to decrease by 2.5 percentage points to 21.2% in 2025, continuing the downward trend from the previous year [3] Group 4: Capital Expenditure and Dividends - Capital expenditure is expected to decline by 33.6% to approximately 660 million yuan in 2025, as the company completes its vocational education center construction [4] - With a high dividend payout ratio, the expected dividend yield could reach 5.6% if the company maintains its 2024 payout ratio [4] Group 5: Revenue and Profit Forecast - The revenue forecast for 2025-2027 has been revised upwards to 46.1 billion, 52.4 billion, and 60.1 billion yuan respectively, along with adjusted net profit estimates of 793 million, 1 billion, and 1.24 billion yuan [4]

Summary of Conference Call Notes Company Overview - **Company**: China Oriental Education - **Industry**: Education Key Points Revenue Performance - For the full year 2025, the number of new students is expected to increase by 6% year-on-year, with revenue projected to grow by 12% to 4.63 billion yuan, exceeding the expected growth rate of 10% [1] - In the second half of 2025, revenue is anticipated to reach 2.444 billion yuan, representing a year-on-year increase of 14.6% [1] - The revenue outperformance is primarily attributed to a rapid increase in the proportion of high-priced classes lasting 15 months, which has elevated the average transaction value [1] Profitability Expectations - The company forecasts a full-year net profit and adjusted net profit growth of 46%-51%, translating to a net profit range of approximately 749 million to 774 million yuan, with a median net profit margin of 16.45% [1] - The adjusted net profit is expected to be in the range of 766 million to 793 million yuan, with a median adjusted net profit margin of 16.83% [1] - For the second half of 2025, the net profit is projected to be 359 million yuan, reflecting a year-on-year growth of 48.7% and a net profit margin of 14.7%, an increase of 3.37 percentage points year-on-year [1] Seasonal Impact - There is an acknowledgment of seasonal effects, with higher sales expenses and operating costs in the second half of the year compared to the first half [2] Strategic Initiatives - The spring recruitment is expected to accelerate growth, with overall spring recruitment fees increasing by approximately 20% year-on-year [3] - The company is diversifying its brand portfolio into beauty, pet care, and caregiving sectors, aligning with career development trends that are less likely to be replaced by AI and are experiencing robust growth [3] - A net profit target of 1 billion yuan is projected for 2026, corresponding to a price-to-earnings (PE) ratio of 12.2 times, with an assumed dividend payout of 80%, resulting in a dividend yield of approximately 6.4% [3]

社会服务 上 市 公 司 2026 年 02 月 10 日 中国东方教育 (00667) —— 职教培训景气上行，运营效率持续提升 报告原因：强调原有的投资评级 买入（维持） | 市场数据： | 2026 年 02 月 09 日 | | --- | --- | | 收盘价（港币） | 6.21 | | 恒生中国企业指数 | 9168.33 | | 52 周最高/最低（港币） | 9.15/2.61 | | H 股市值（亿港币） | 137.71 | | 流通 H 股（百万股） | 2,217.53 | | 汇率（港币/人民币） | 0.8897 | 一年内股价与基准指数对比走势： -9% 91% 191% 291% 02/10 03/10 04/10 05/10 06/10 07/10 08/10 09/10 10/10 11/10 12/10 01/10 HSCEI 中国东方教育 资料来源：Bloomberg 相关研究 - 职业技能培训景气提升，公司招生增长提速：大学低速扩招错配高中快速扩招，我们预计受高 考落榜生数量持续增加，高中毕业生职业技能培训市场将迎来持续景气提升。受 21 至 24 年 高中持续扩 ...

Group 1: Company Overview - China Oriental Education (00667) has a strong recovery in mature professional enrollment and profitability, with emerging programs steadily being developed to create new growth momentum [1] - The company is a leading vocational education group in China, with well-known brands such as New Oriental Cooking, Xinhua Computer, and Wantong Automotive Repair, covering four mature fields: culinary arts, western cuisine, information technology, and automotive services [1] Group 2: Financial Projections - The company is expected to achieve a net profit attributable to shareholders of 790 million, 1.1 billion, and 1.38 billion yuan for the years 2025-2027, reflecting growth rates of 53%, 39%, and 26% respectively [1] - The reasonable valuation for the company is estimated to be between 6.89 and 7.95 HKD per share, maintaining an "outperform" rating [1] Group 3: Industry Trends - The vocational education industry in China is in a golden expansion phase, with a projected compound annual growth rate of 17% from 2025 to 2029, potentially exceeding 2 trillion yuan by 2029 [2] - The adjustment in the secondary vocational education sector has seen a decline in high school enrollment from 51% to 34% from 2010 to 2024, but there is a potential for a new balance as skilled talent demand remains strong [2] Group 4: Mature Programs - The company's proactive adjustments since 2024, including shutting down inefficient campuses and enhancing course structures, have led to a net profit margin of 19.0% in the first half of 2025, an increase of 5.0 percentage points [3] - The recovery in mature program enrollment has resulted in a 7% year-on-year increase in new training participants, with expectations of maintaining a 7-8% growth rate in new enrollments for 2026-2027 [3] Group 5: Emerging Programs - The beauty industry is projected to reach a market size of 380 billion yuan by 2025, with characteristics similar to the culinary sector, indicating potential for replicating past successes [4] - The company’s beauty brand achieved an average of 6,000 training participants in the first half of 2025, surpassing the total for 2024, with expectations for beauty revenue to reach 700 million yuan by 2027 [4] - The pet and wellness sectors are also identified as high-potential areas for long-term growth, with pilot programs already underway in the pet education field [4]