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China Education Group Holdings Limited (HK:0839)
:0839
Hong Kong Market

China Education Group Holdings Limited (0839) AI Stock Analysis

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HK

China Education Group Holdings Limited

(0839)

Rating:71Outperform
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 (0839) vs. iShares MSCI Hong Kong ETF (EWH)

China Education Group Holdings Limited Business Overview & Revenue Model

Company DescriptionChina 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 MoneyChina 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
85
Very Positive
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
78
Positive
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
72
Positive
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 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
6.58B5.62B4.76B3.68B2.68B
Gross Profit
3.64B3.16B2.75B2.18B1.60B
EBIT
2.85B2.21B2.29B1.63B899.13M
EBITDA
1.84B2.87B2.92B2.09B1.14B
Net Income Common Stockholders
418.00M1.38B1.84B1.44B633.20M
Balance SheetCash, Cash Equivalents and Short-Term Investments
6.53B5.75B5.01B4.95B4.27B
Total Assets
38.82B35.75B33.58B26.75B17.97B
Total Debt
10.37B8.68B8.98B8.44B5.22B
Net Debt
4.13B3.50B4.19B5.11B1.78B
Total Liabilities
20.29B17.45B17.00B14.99B9.07B
Stockholders Equity
15.85B15.57B14.01B10.92B8.57B
Cash FlowFree Cash Flow
81.00M1.03B582.00M-434.09M-89.99M
Operating Cash Flow
4.51B3.85B2.75B2.53B910.94M
Investing Cash Flow
-4.18B-2.70B-1.74B-4.95B-2.59B
Financing Cash Flow
729.00M-764.00M459.00M2.36B1.63B

China Education Group Holdings Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.72
Price Trends
50DMA
2.46
Positive
100DMA
2.64
Positive
200DMA
3.35
Negative
Market Momentum
MACD
0.07
Negative
RSI
64.48
Neutral
STOCH
76.75
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

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
HK$7.62B21.831.91%30.86%12.33%-80.20%
65
Neutral
$8.92B15.034.68%6.11%3.59%-2.49%
HK$744.39M10.867.33%13.28%
HK$1.81B2.1218.95%0.55%
75
Outperform
HK$2.16B2.767.75%1.32%-20.13%
72
Outperform
HK$949.06M2.659.21%10.71%-1.33%4.95%
57
Neutral
HK$238.31M2.1916.80%50.00%-41.24%-36.17%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0839
China Education Group Holdings Limited
2.76
-1.83
-39.87%
HK:1565
Virscend Education Company Limited
0.24
0.06
33.33%
HK:2001
China New Higher Education Group Ltd
0.92
-0.78
-45.88%
HK:2779
China Xinhua Education Group Limited
0.59
-0.09
-13.24%
HK:6068
Wisdom Education International Holdings Co. Ltd.
0.11
-0.08
-42.11%
HK:6169
China Yuhua Education Corp. Ltd.
0.50
0.06
13.64%

China Education Group Holdings Limited Corporate Events

China Education Group Reports Revenue Growth Amid Profit Decline
Apr 30, 2025

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
Apr 28, 2025

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
Apr 16, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.