银河证券研报 | 华立大学集团重申「增持」评级

Results missed because of lower margins

Huali reported 1H FY21 revenue of Rmb445m, up 13.1% yoy, driven by 10.9%, 13.2% and 22.7% yoy revenue growth for Huali College, Huali Vocational College and Huali Technician College, respectively, basically in line with our expectations. Its 1H FY21 gross margin was down by 3.6% pts yoy to 53.7%, lower than we expected, primarily because of an increase in staff costs, joint tuition support fees, school consumables, and property management and maintenance fees related to the expansion of Yunfu Campus. The selling expenses ratio was up by 1.5% pts yoy to 4.5%, as Huali Vocational College and Huali Technician College employed innovative marketing campaign approaches, such as using TikTok and WeChat and organizing school tours, to recruit new students. The average recruitment expenses per new student increased from < Rmb1,000 of last year to Rmb1,200–1,300 this year. Thus, the OP margin declined by 3.6% pts yoy to 37.7%. 1H FY21 net profit was Rmb139.6m, up 1.1% yoy, below our expectations. 

Mild new student quota increase expected

In 1H FY21, Huali saw overall student enrolment growth of 10.6% yoy. The enrolment increase for Huali College, Vocational College and Technician College was 3.1%, 13.2% and 22.3% yoy, respectively. For the 21/22 school year, Huali expects its new student intake quota to be over 5,000 for Huali College and 10,800 for Huali Vocational College, compared with 4,300 and 9,000, respectively, for the 20/21 school year. New student intake for Huali Technician College was 4,800 in the 20/21 school year and is expected to increase by 10% in 21/22 school year. In our view, the new student intake quota increase is rather mild. Management plans to increase tuition fees by 10% and 5% every two years for Huali University and Huali Vocational College, respectively. 

Campus expansion may hurt short-term margins

Currently, the campus utilization rate for the Zengcheng and Yunfu campus is 93.8% and 66.7%, respectively, up from 93.0% and 24.5%, respectively, from last year. Huali College’s new Jiangmen Binhai campus and Technician College’s new Jiangmen Yamen campus are expected to start operation in Sep 2021 with capacity of 4,000 and 8,100 students, respectively. Huali University’s conversion from an independent college to a private university is progressing on schedule, and management expects the process to be completed in Jun 2021 with a separation fee of about Rmb160m. The conversion is expected to enhance Huali’s net profit by 6%. Management plans to achieve one to two acquisitions in each financial year. We expect the campus expansion to continue to put pressure on margins and its GM to be 55%, 55.3% and 56% in FY8/21–23F, respectively.

Reiterate Add rating

We cut our earnings forecast for FY21–23F by 11.0%, 13.3% and 15.1%, respectively, to reflect a mild new student intake quota increase and weaker margins because of campus expansion. The key catalysts are 1) stronger student enrolment growth, 2) better margin expansion, and 3) the conversion of Huali College. The key risks include any delay in capacity expansion and more severe competition.

华立大学集团（1756.HK）作为华南领先的大型民办高等教育及职业教育集团，提供以应用学科为重点、实践为导向的专业课程。我们的学校为学生提供多个应用学科领域的民办高等教育及民办职业教育，旨在使学生既有适应市场变化的广博知识基础，又能获取发展事业必要的专业技能和职业认证。我们针对华南地区，特别是粤港澳大湾区潜在雇主需求的各类专业，设计了强调面向工作的前沿性实用性课程，并且重视培养学生自主创新创业的能力。

华立大学集团旗下运营三所学校：广东工业大学华立学院，颁发本科文凭及拥有学士学位授予权；广州华立科技职业学院，颁发大专文凭；广东省华立技师学院，颁发技师文凭。三所学校形成了多层次多类型的教育体系。本集团目前拥有四个校区（增城校区、云浮校区、本科江门校区[新建]、技师江门校区[新建]），随着新校区投入使用，未来本集团将保持强劲的内生增长势头。