China Education Group Holdings Limited (0839) AI Stock Analysis

• Market Cap: HK$7.62B
• Dividend Yield: 30.86%
• Average Volume (3M): 12.58M
• Price to Earnings (P/E): 21.8
• Beta (1Y): 1.10
• Revenue Growth: 12.33%
• EPS Growth: -80.20%
• Country: HK
• Employees: 19,149
• Sector: Consumer Defensive
• Sector Strength: 63
• Industry: Education & Training Services
• EPS (TTM): 0.12
• Shares Outstanding: 2,800,312,700
• 10 Day Avg. Volume: 18,341,017
• 30 Day Avg. Volume: 12,584,176
• PEG Ratio: -0.34
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 125.98
• 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: 58.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 71 Outperform
• Price Target: HK$3.00 ▲(10.29%Upside)

China Education Group Holdings Limited demonstrates strong financial stability and revenue growth, bolstered by efficient cost management. However, the decline in net income and increased leverage present risks. The stock's technical indicators show short-term bullish momentum but also potential overbought conditions. Valuation poses concerns due to a high P/E ratio, although the strong dividend yield is a positive factor. Investors should weigh these elements carefully, considering both the opportunities and risks involved.

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 fees collected from students enrolled in its educational institutions. The company operates several universities and colleges across China, where it offers undergraduate, graduate, and vocational training programs. These programs cover various disciplines, including business, engineering, arts, and social sciences. Additionally, the company may earn income from auxiliary services such as dormitory fees, canteen sales, and other on-campus services. The group's financial performance is further bolstered by strategic partnerships with international educational institutions, which help enhance its educational offerings and attract a diverse student body.

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
	EBIT
2.85B	2.21B	2.29B	1.63B	899.13M
	EBITDA
1.84B	2.87B	2.92B	2.09B	1.14B
	Net Income Common Stockholders
418.00M	1.38B	1.84B	1.44B	633.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.53B	5.75B	5.01B	4.95B	4.27B
	Total Assets
38.82B	35.75B	33.58B	26.75B	17.97B
	Total Debt
10.37B	8.68B	8.98B	8.44B	5.22B
	Net Debt
4.13B	3.50B	4.19B	5.11B	1.78B
	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: 2.72
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• 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 2.72 is above the 20-day moving average (MA) of 2.60, above the 50-day MA of 2.46, and below the 200-day MA of 3.35, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 64.48 is Neutral, neither overbought nor oversold. The STOCH value of 76.75 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
0839	71 Outperform	HK$7.62B	21.83	1.91%	30.86%	12.33%	-80.20%
Sector *	65 Neutral	$8.92B	15.03	4.68%	6.11%	3.59%	-2.49%
1565		HK$744.39M	10.86	7.33%	13.28%	―	―
2001		HK$1.81B	2.12	18.95%	0.55%	―	―
6169	75 Outperform	HK$2.16B	2.76	7.75%	―	1.32%	-20.13%
2779	72 Outperform	HK$949.06M	2.65	9.21%	10.71%	-1.33%	4.95%
6068	57 Neutral	HK$238.31M	2.19	16.80%	50.00%	-41.24%	-36.17%

China Education Group Holdings Limited Corporate Events

China Education Group Reports Revenue Growth Amid Profit Decline

China Education Group Holdings Limited announced its interim results for the six months ending February 28, 2025, reporting a revenue increase of 11.8% to RMB 3,673 million compared to the previous year. Despite the revenue growth, the company experienced a decline in net profit by 8.2% to RMB 1,091 million, attributed to increased costs and expenses, impacting its financial performance.

China Education Group Adapts to Evolving Market Conditions

China Education Group Holdings Limited has announced updates on market conditions and corporate developments, highlighting the impact of demographic shifts, consumer behavior changes, and funding landscapes on the education sector in China. The company is adapting to these changes by focusing on vocational education and maintaining financial resilience, positioning itself to thrive amid increased competition and evolving regulatory environments.

China Education Group Schedules Board Meeting for Interim Results

China Education Group Holdings Limited has announced a board meeting scheduled for April 30, 2025, to approve and publish the interim results for the six months ending February 28, 2025, and to consider an interim dividend payment. This meeting is significant as it will provide insights into the company’s financial performance and potential returns for stakeholders, impacting its market positioning and investor confidence.