XUEDA(000526) 国金证券·2024-12-08 01:43Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [3][5]. Core Insights - The company is a leader in the domestic K12 personalized education sector, with over 100 learning centers across the country. Its teaching model features one-on-one and small class instruction, and it has expanded into vocational education and cultural space sectors, aiming to transform into a comprehensive education group [3][4]. - The education industry is seeing a marginal improvement in policies, with clearer regulatory boundaries and effective rectification of industry chaos. The reduction of offline training institutions by 96.7% as of November 2024 is expected to benefit leading companies like this one [4][13]. - The company has a strong brand recognition and reputation, having served over 2 million students in its 20+ years of operation. The increase in class sizes has significantly improved profitability, with a gross margin of 36.5% at the end of 2023, up from 28% in 2022 [4][17]. Summary by Sections Company Overview - The company has been deeply involved in personalized education for over 20 years, initially starting with a home tutoring platform and expanding to physical learning centers. It has undergone several transformations, including a significant acquisition in 2016 that allowed it to return to the A-share market [83][85]. Industry Analysis - The education sector is primarily driven by policy changes, with a focus on reducing burdens on students and regulating the tutoring market. The "double reduction" policy has led to a significant decrease in the number of training institutions, which is expected to benefit established players [111][113]. - The high school subject training market is projected to recover, with estimated market sizes of 1,364 billion, 1,481 billion, and 1,602 billion yuan for 2024, 2025, and 2026 respectively, reflecting a CAGR of 8.5% [134][146]. Core Competitiveness - The company has pioneered a personalized "one-on-one" tutoring system, which has become its brand identity. It has a robust network of learning centers and a strong teaching staff, which positions it well in the competitive landscape [162][164]. - The company is increasing the proportion of class-based instruction, which is expected to enhance profitability. The gross margin is projected to remain stable or increase due to this shift [181][182]. Profit Forecast, Valuation, and Rating - The company is expected to achieve net profits of 2.02 billion, 2.52 billion, and 3.05 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding EPS of 1.64, 2.05, and 2.48 yuan [5][208]. - The current stock price corresponds to a PE ratio of 27.73, 22.23, and 18.35 for the years 2024, 2025, and 2026, respectively. A target price of 51.13 yuan is set for 2025, reflecting a 25X PE valuation [5][218].