Kevin Education (002659): The sale of real estate assets to revitalize existing assets enrollment smooth performance inflection point is coming
Matter: The company’s subsidiary, Beijing Wenkaixing Education Investment Co., Ltd. (hereinafter referred to as “Wenkaixing”) intends to sell its held building No. 46, No. 46 Baoquan Third Street, Chaoyang District, Beijing by way of non-public agreement transferThe valuation of the underlying asset is about 5.
920,000 yuan, the proceeds from the sale of assets will be used to supplement the company’s working capital, and to develop education business.
The value of investment real estate is high, and the sale of properties helps the company to turn a profit.
Wen Kaixing owns 4 office buildings in No. 46 Baoquan Third Street, Chaoyang District, Beijing, each building has a floor area of about 2.
20,000 square meters, of which Building No. 1, Building No. 2 and Building No. 3 are leased out to the outside, and are included in the investment real estate. As of the end of June 2019, the book balance of investment real estate3.
1.4 billion; Building 4 is for personal use. Houses and buildings are included in fixed assets, and land is included in intangible assets.
The company’s investment real estate reevaluation value is high, the building area of building 1 is about 2.
180,000 square meters, with an evaluation value of 5.
92 million, with an estimated premium of approximately 466%.
If this asset sale is completed within the year, it is expected to increase the company’s non-operating income5.
92 million, which is expected to have a positive impact on the company’s 2019 net profit, and the company is expected to turn losses into profits.
The sale of properties revitalized the existing assets, and the education business continued to increase.
Chaoyang Kaiwen School is a K12 bilingual school built by the company. Among them, only 1.2 billion US dollars of investment funds were raised to form the original fixed asset value13.
91 ppm, original value of intangible assets9.
98 million US dollars and original value of investment real estate3.
At 18 trillion, the average annual depreciation of fixed assets is estimated at 34.79 million yuan, the average annual amortization of intangible assets is 19.96 million yuan, and the average annual depreciation of investment real estate is 7.68 million yuan, which has become a major factor that drags down the school’s profitability in the early stage of school operation.
The sale of properties is conducive to revitalizing existing assets and reducing the impact of depreciation on performance.
At the same time, the company can increase the education business by transferring income, extend the international education industry chain, and cultivate new performance growth points for the education business.
In addition, the company can also repay loans, reduce debt rates and interest expenses, and improve the company’s profitability.
School enrollment is smooth as a whole, and a turning point in performance is about to appear.
The company owns two schools, Haidian Kaiwen School and Chaoyang Kaiwen School. As of the end of 深圳桑拿网 2018, there were 1,221 students in the two schools, and the school occupancy rate was about 22%. In the 2019-2020 school year, about 500 new students are expected in the school.Overall as expected.
At present, the enrollment of students in the two schools is expected to be between 1700-1800, and the school occupancy rate will exceed 30%. If calculated based on the average operating income of 25 million students per person, tuition and miscellaneous fees for the two schools in the 2019-2020 school year are expected to flow 4.
Between 50 trillion, the company’s operating income is expected to exceed 1 trillion in the fourth quarter of 2019, and the company’s education business will achieve a profit probability breakthrough in the fourth quarter.
At present, the two schools have launched the admission plan for the new school year, with about 500 new students expected. The company’s performance is expected to accelerate the release in the next few years.
It is necessary to increase the quality education of the code, and the capital strength is rapidly improved.
In September 2019, the company decided to increase and obtain approval from the Securities Regulatory Commission. It plans to issue approximately 9.71 million shares. Based on the latest issue price, it is estimated that the total raised funds will be approximately 6.
US $ 5.8 billion, all for the construction of the “High-Quality Education Platform for Adolescents”.
The project is market-oriented, with arts, sports, scientific thinking, and quality development as the leading quality education product training and service. It provides young people with one-stop, diversified and interdisciplinary high-quality quality education comprehensive services.Form new points of performance growth.
The fixed increase and asset disposal strengthen the company’s capital strength, and the company’s monetary funds will increase significantly.
At the end of June 2019, the company’s book currency funds3.
4.9 billion US dollars, fixed increase is expected to increase monetary funds of more than 600 million US dollars, by then the company’s monetary funds are expected to reach more than 1 billion US dollars.
Investment suggestion: Considering the sale of the company’s real estate, or the decline in the company’s rental income, and the increase in external operating income, we adjusted the company’s performance forecast, and it is expected that the revenue growth rate for 2019-2021 will be 44.
58% and 35.
00%; the growth rate of net profit attributable to shareholders of the parent company was -157.
79% and 37.57%.
EPS are 0.
11 yuan, 0.
23 yuan and 0.
31 yuan, the corresponding PE is 62.
4 times, 31.
1x and 22.
6 times, PB is 1.
5 and 1.
The company is the only education listed company in the stock market with international schools as its core assets, and the first stock in international schools in the stock market.
At present, the running of the two schools is progressing steadily, and the company’s performance will be released soon. Asset disposal will help turn losses into profitability in 2019. The fixed increase will be completed soon.
Optimistic about the company’s educational resources integration space and the prospects of international school development, maintain the company’s “Buy-A” investment rating, 6-month target price is 11.
Risk Warning: Changes in international education policies, schools are less than expected, tuition fees are growing slowly, and outstanding teachers are lost.