China Education Group Holdings Limited (0839) AI Stock Analysis

• Market Cap: HK$9.24B
• Dividend Yield: 9.64%
• Average Volume (3M): 38.78M
• Price to Earnings (P/E): 26.2
• Beta (1Y): 1.16
• Revenue Growth: 12.33%
• EPS Growth: -80.20%
• Country: HK
• Employees: 19,149
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 0.42
• Shares Outstanding: 2,800,312,700
• 10 Day Avg. Volume: 95,372,398
• 30 Day Avg. Volume: 38,776,256
• 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$3.50
• Price Target Upside: 8.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 76 Outperform
• Price Target: HK$4.00 ▲(23.84% Upside)

The overall stock score of 76 reflects strong technical momentum and robust financial performance, despite concerns about valuation and cash flow. The stock's upward trend and attractive dividend yield are significant positives, but the high P/E ratio and reduced free cash flow warrant caution.

China Education Group Holdings Limited Business Overview & Revenue Model

Company Description

China Education Group Holdings Limited, an investment holding company, operates private higher and vocational education institutions in the People's Republic of China, Australia, and internationally. As of August 31, 2021, the company offers 14 master's degree programs, 285 bachelor's degree programs, 109 junior college diploma programs, 169 vocational education programs, and 184 continuing education programs. It also provides educational consultancy services; and vocational education services. The company operates higher education institutions under the Jiangxi University of Technology, Guangdong Baiyun University, Haikou University of Economics, Guangzhou Songtian University, Shandong Quancheng University, and Songtian Polytechnic College names; three vocational education institutions under the Xi'an Railway College, Zhengzhou Transit School, and Baiyun Technician College names in Jiangxi, Guangdong, Henan, Shaanxi, Shandong, and Chongqing; and a higher education institute under the King's Own Institute name in Sydney, Australia. China Education Group Holdings Limited was founded in 1989 and is based in Wan Chai, Hong Kong.

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: Positive
• Last Price: 3.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0839, the sentiment is Positive. The current price of 3.23 is above the 20-day moving average (MA) of 3.15, above the 50-day MA of 3.00, and above the 200-day MA of 2.83, indicating a bullish trend. The MACD of 0.13 indicates Positive momentum. The RSI at 52.10 is Neutral, neither overbought nor oversold. The STOCH value of 26.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
2001	81 Outperform	2.39B	2.79	18.39%	7.12%	9.07%	5.93%
0839	76 Outperform	HK$9.24B	26.16	1.91%	9.64%	12.33%	-80.20%
1969	74 Outperform	5.26B	6.08	20.04%	4.61%	7.87%	7.13%
1851	73 Outperform	760.00M	4.80	16.33%	―	1.40%	-15.24%
6169	72 Outperform	2.75B	3.48	5.32%	―	1.32%	-20.13%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

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.