Guangfa Securities released a research report forecasting that CHINA EAST EDU (00667) will achieve adjusted net profits of 0.8/1.02/1.26 billion yuan for the years 2025-2027. Considering the company's position as a high-quality industry leader currently on a trajectory of growth and profit recovery, and referencing comparable company valuations, the report assigns the company a 2026 P/E ratio of 20x. This corresponds to a fair value of HK$10.16 per share (using an exchange rate of HKD/RMB 0.90), leading to a maintained "Buy" rating.
Established in 1988 starting with culinary training, this vocational education leader has深耕 the industry for over 30 years. It now operates seven major brands across four key vocational skill training segments: culinary arts, information technology, automotive services, and beauty. While performance was pressured during the pandemic due to internal and external factors, the company has progressively entered a phase of operational and profitability improvement since 2024. For 2024/H1 2025, it achieved revenues of 4.12/2.19 billion yuan, representing year-on-year increases of +3.5%/+10.2%, and realized adjusted net profits of 0.53/0.40 billion yuan, surging by +86.6%/+48.4% year-on-year.
Vocational skill training is a vital segment of non-academic vocational education, driven by a strong employment-oriented demand logic and supported by a vast potential student population. The company's focus is primarily on cultivating blue-collar talent for the service industry, which maintains highly favorable employment prospects. The industry features a fragmented competitive landscape, where leading players in various sub-sectors possess distinct competitive advantages.
The company has established a virtuous cycle integrating teaching and research, employment services, and operational recruitment. It delivers high-quality educational products through continuous curriculum iteration, strongly practice-oriented teaching methods, and diverse program durations. Furthermore, by deeply integrating industry and education, it has built a solid reputation, maintaining employment recommendation rates above 90% across its programs.
Future growth drivers include the positive development of all brands and the anticipated contribution from regional centers. Following operational optimizations since 2024, brands like New Oriental and Xinhua are showing signs of bottoming out and improving, alongside optimization of their program structures. Meanwhile, Oumandi Meiyé is in an expansion phase with individual schools scaling up rapidly. In terms of student demographics, high school graduates are expected to become a significant growth source; in H1 2025, new student enrollments in 1-2 year programs reached 11,000, a substantial increase of +85.4% year-on-year, supporting an optimized enrollment structure. Additionally, regional centers established since 2022 are gradually becoming operational, which is expected to further enhance the company's overall educational capacity and profitability.
Potential risks include a sluggish service consumption market, student enrollment falling short of expectations, and fluctuations in industry policies.
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