China Education Group Holdings Limited (0839) AI Stock Analysis

• Market Cap: HK$7.78B
• Dividend Yield: 11.52%
• Average Volume (3M): 12.19M
• Price to Earnings (P/E): 22.3
• Beta (1Y): 1.05
• Revenue Growth: 12.33%
• EPS Growth: -80.20%
• Country: HK
• Employees: 19,149
• Sector: Consumer Defensive
• Sector Strength: 52
• Industry: Education & Training Services
• EPS (TTM): 0.42
• Shares Outstanding: 2,800,312,700
• 10 Day Avg. Volume: 11,376,083
• 30 Day Avg. Volume: 12,194,163
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$4.30
• Price Target Upside: 55.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 76 Outperform
• Price Target: HK$3.50 ▲(26.35% Upside)

The overall stock score is driven by strong valuation metrics, particularly the high dividend yield, and supported by solid financial performance. The technical analysis indicates some positive short- to medium-term trends but highlights longer-term challenges. Financial stability is solid, though improvements in profitability and leverage management are necessary.

China Education Group Holdings Limited Business Overview & Revenue Model

Company Description

China Education Group Holdings Limited (0839) is a leading educational services provider in China, specializing in offering a diverse range of educational programs. The company primarily focuses on higher and vocational education, operating several universities and colleges across the country. Its core services include the provision of undergraduate and junior college education, as well as continuing education programs.

How the Company Makes Money

China Education Group Holdings Limited generates revenue primarily through tuition and educational fees collected from students enrolled in its institutions. The company owns and operates a network of universities and vocational colleges, where it offers a variety of educational programs. Additional revenue streams include ancillary services such as student accommodation and educational materials. The company's expansion strategy includes acquiring new educational institutions to broaden its service offerings and increase student enrollment. This growth strategy is complemented by strategic partnerships with other educational entities to enhance its educational programs and market reach.

China Education Group Holdings Limited Financial Statement Overview

Summary

China Education Group Holdings Limited exhibits strong revenue growth and efficient cost management, as indicated by a stable gross profit margin. However, the decrease in net income and increased leverage present potential risks. The decline in free cash flow could impact future investments, despite a healthy operating cash flow ratio. The company is financially stable but should focus on improving profitability and managing debt effectively.

Income Statement

The company has shown a robust revenue growth rate of approximately 17.1% year-over-year from 2023 to 2024, which is a positive indicator of business expansion in the education sector. However, there is a notable decline in net income, leading to a reduced net profit margin of 6.4% in 2024 from 24.6% in 2023. The gross profit margin remains strong at 55.4%, showcasing efficient cost management. The absence of EBIT in 2024 is unusual, possibly affecting operational analysis.

Balance Sheet

The debt-to-equity ratio has increased to 0.65 from 0.56, indicating a rise in leverage, which could pose a risk if not managed well. The equity ratio is stable at 40.8%, reflecting a solid equity base. Return on equity stands at 2.6%, a decrease from the previous year, suggesting lower profitability relative to shareholder equity.

Cash Flow

The free cash flow has significantly decreased by 92.1% from the previous year, which raises concerns about cash generation capabilities. However, the operating cash flow to net income ratio is high at 10.8, indicating strong cash earnings relative to reported profits. The company shows a cautious approach towards capital expenditure, aligning with its strategic investment in growth.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	6.58B	5.62B	4.76B	3.68B	2.68B
Gross Profit	3.64B	3.16B	2.75B	2.18B	1.60B
EBITDA	1.84B	2.87B	2.92B	2.09B	1.14B
Net Income	418.00M	1.38B	1.84B	1.44B	633.20M
Balance Sheet
Total Assets	38.82B	35.75B	33.58B	26.75B	17.97B
Cash, Cash Equivalents and Short-Term Investments	6.53B	5.75B	5.01B	4.95B	4.27B
Total Debt	10.37B	8.68B	8.98B	8.44B	5.22B
Total Liabilities	20.29B	17.45B	17.00B	14.99B	9.07B
Stockholders Equity	15.85B	15.57B	14.01B	10.92B	8.57B
Cash Flow
Free Cash Flow	81.00M	1.03B	582.00M	-434.09M	-89.99M
Operating Cash Flow	4.51B	3.85B	2.75B	2.53B	910.94M
Investing Cash Flow	-4.18B	-2.70B	-1.74B	-4.95B	-2.59B
Financing Cash Flow	729.00M	-764.00M	459.00M	2.36B	1.63B

China Education Group Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.77
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0839, the sentiment is Negative. The current price of 2.77 is below the 20-day moving average (MA) of 2.91, above the 50-day MA of 2.76, and below the 200-day MA of 3.07, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 40.96 is Neutral, neither overbought nor oversold. The STOCH value of 14.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0839.

China Education Group Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1851	81 Outperform	HK$850.00M	5.12	17.84%	―	2.89%	1.19%
1969	79 Outperform	HK$5.30B	6.13	20.65%	4.39%	7.87%	7.13%
0839	76 Outperform	HK$7.78B	22.31	1.91%	11.52%	12.33%	-80.20%
2001	75 Outperform	HK$2.15B	2.51	18.95%	7.99%	9.07%	5.93%
6169	72 Outperform	HK$2.28B	2.99	7.75%	―	1.32%	-20.13%
Sector *	62 Neutral	HK$21.21B	10.43	4.01%	5.10%	0.02%	-36.83%

China Education Group Holdings Limited Corporate Events

China Education Group Forms Nomination Committee to Enhance Governance

China Education Group Holdings Limited has established a nomination committee to identify and recommend suitable candidates for the board of directors, oversee board performance evaluations, and develop nomination guidelines in compliance with laws and regulations. The committee will consist of a majority of independent non-executive directors, ensuring diversity and adherence to listing standards, which may impact the company’s governance and stakeholder confidence.

The most recent analyst rating on (HK:0839) stock is a Buy with a HK$4.30 price target. To see the full list of analyst forecasts on China Education Group Holdings Limited stock, see the HK:0839 Stock Forecast page.