Scholar Education Group (1769) AI Stock Analysis

• Market Cap: HK$1.30B
• Dividend Yield: 3.57%
• Average Volume (3M): 4.10M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 0.93
• Revenue Growth: 23.95%
• EPS Growth: -1.00%
• Country: HK
• Employees: 2,973
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 0.12
• Shares Outstanding: 674,869,100
• 10 Day Avg. Volume: 9,126,000
• 30 Day Avg. Volume: 4,096,866
• PEG Ratio: 0.23
• Price to Book (P/B): 4.21
• Price to Sales (P/S): 3.14
• P/FCF Ratio: 23.28
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: HK$2.50 ▲(27.55% Upside)

The overall stock score reflects a solid financial performance with strong revenue and profit growth, despite some cash flow inconsistencies. Technical analysis indicates a bearish trend, with the stock trading below key moving averages and approaching oversold levels. Valuation metrics suggest the stock is reasonably priced with an attractive dividend yield, making it appealing for income-focused investors.

Positive Factors

Revenue Growth

Consistent revenue growth indicates expanding market reach and effective business strategies, enhancing long-term sustainability.

Profitability

Strong profit margins reflect efficient operations and cost control, supporting long-term financial health and shareholder value.

Balance Sheet Health

A robust equity position provides financial stability and flexibility, enabling the company to invest in growth opportunities.

Negative Factors

Liabilities

High liabilities can strain financial resources and limit the company's ability to invest in future growth, posing long-term risks.

Cash Flow Variability

Inconsistent cash flow can impact the company's ability to fund operations and growth initiatives, affecting long-term viability.

Operational Efficiency

Fluctuating margins indicate potential challenges in maintaining consistent operational performance, which could affect profitability.

Scholar Education Group Business Overview & Revenue Model

Company Description

Scholar Education Group, an investment holding company, provides K-12 after-school education services in the People's Republic of China. The company offers a suite of after-school education services through its academic preparation program and early primary education program. It delivers academic preparation program under the Sheng Xue brand, which offers classes to students in grade one through grade 12 in school academic subjects; and early primary education program under the Le Xue brand that provides childhood education courses and hobby courses, such as languages and performing arts to students from grade one to grade three. As at 31 December 2020, the company operated 152 learning centers across twelve cities in Guangdong, Jiangsu, and Zhejiang Provinces. It also engages in the Internet and software technology development and services. The company was founded in 2012 and is headquartered in Shenzhen, the People's Republic of China.

How the Company Makes Money

Scholar Education Group generates revenue primarily through its tutoring services, which include one-on-one sessions, group classes, and online courses. The company charges fees for its tutoring services, which vary based on the type of program and duration. Additionally, it may earn income from selling educational materials and resources, as well as through partnerships with schools or educational institutions that may provide referrals or bundled services. The company's strategic partnerships with technology providers may also contribute to its earnings by enhancing its online learning capabilities and expanding its market reach.

Scholar Education Group Financial Statement Overview

Summary

Scholar Education Group is demonstrating a robust growth trajectory with strong revenue and profit growth, underpinned by effective cost management. The balance sheet is stable with a healthy equity position, although liabilities require careful monitoring. Cash flow generation remains positive but with recent inconsistencies that need attention. Overall, the company is financially sound with areas to watch.

Income Statement

Scholar Education Group shows a strong revenue growth trend, with a substantial increase from 2022 to 2024. Gross profit margin and net profit margin are solid, indicating effective cost management and profitability. However, there is some volatility in EBIT and EBITDA margins, suggesting fluctuating operational efficiency.

Balance Sheet

The balance sheet reflects a healthy equity position with a strong equity ratio and a manageable debt-to-equity ratio. The company's return on equity has improved significantly in recent years, pointing to effective use of shareholder funds. However, the presence of significant liabilities warrants caution.

Cash Flow

The company's free cash flow has shown variability, although the overall trend is positive. The operating cash flow to net income ratio indicates solid cash generation from operations. However, zero reported cash flow in the latest year raises some concerns about cash flow stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	892.61M	852.33M	570.61M	402.08M	831.73M	749.09M
Gross Profit	306.81M	333.39M	238.55M	138.69M	312.68M	247.09M
EBITDA	161.04M	187.27M	178.82M	56.22M	144.24M	59.87M
Net Income	125.93M	145.65M	85.99M	54.41M	-26.61M	48.94M
Balance Sheet
Total Assets	1.30B	1.33B	1.03B	754.92M	760.57M	1.67B
Cash, Cash Equivalents and Short-Term Investments	490.57M	502.52M	473.63M	416.03M	391.77M	741.53M
Total Debt	301.99M	326.99M	175.09M	116.93M	182.40M	656.81M
Total Liabilities	583.16M	692.58M	579.87M	383.52M	443.02M	1.13B
Stockholders Equity	717.57M	635.11M	454.82M	371.40M	317.95M	538.04M
Cash Flow
Free Cash Flow	99.25M	114.92M	169.14M	117.81M	40.44M	188.95M
Operating Cash Flow	208.14M	216.28M	205.22M	125.75M	92.79M	271.45M
Investing Cash Flow	-91.73M	-17.73M	-186.15M	18.69M	47.11M	132.38M
Financing Cash Flow	-122.64M	-63.87M	-62.09M	-82.07M	-344.63M	-198.04M

Scholar Education Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.96
• 50DMA: Negative
• 100DMA: Negative
• 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:1769, the sentiment is Negative. The current price of 1.96 is below the 20-day moving average (MA) of 2.26, below the 50-day MA of 2.66, and below the 200-day MA of 3.35, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 30.57 is Neutral, neither overbought nor oversold. The STOCH value of 17.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1769.

Scholar Education Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2001	81 Outperform	HK$2.03B	1.94	18.04%	10.44%	7.71%	11.65%
0382	78 Outperform	HK$1.71B	3.00	11.86%	11.61%	7.59%	-30.36%
6169	69 Neutral	HK$2.21B	2.10	10.94%	―	0.40%	111.11%
2175	64 Neutral	HK$1.63B	17.98	4.06%	―	-0.48%	-29.65%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
1769	62 Neutral	HK$1.30B	8.34	20.01%	3.57%	23.95%	-1.00%

Scholar Education Group Corporate Events

Scholar Education Group Forms Joint Venture to Develop AI-Powered Educational Robots

Scholar Education Group has announced the formation of a joint venture with Shenzhen Huaxia Junyong to develop educational robots powered by artificial intelligence. This initiative aims to enhance student learning experiences, support teachers by automating administrative tasks, and provide insights into student engagement. The joint venture aligns with national digital education strategies and involves a significant capital contribution to research and develop advanced AI algorithms and multifunctional educational robots, marking the company’s entry into the educational AI robotics industry.

Scholar Education Group Forms Joint Venture for AI Educational Robots

Scholar Education Group has announced the formation of a joint venture with Shenzhen Huaxia Junyong to develop educational AI robots, with a total investment of RMB385 million. The joint venture will be 30% owned by Scholar Education Group and 70% by Shenzhen Huaxia Junyong, marking a strategic move to enhance its technological capabilities in the education sector.

Scholar Education Group Completes Major Share Subscription to Boost Growth

Scholar Education Group has completed the subscription of 110 million new shares under its General Mandate, representing about 16.30% of the company’s enlarged share capital. The proceeds of approximately HK$241.3 million will be used to improve teaching quality, explore artificial intelligence projects, and support general corporate purposes. This move is expected to strengthen the company’s strategic positioning and operational capabilities.

Scholar Education Group Expands Capital with New Share Subscription

Scholar Education Group has announced the subscription of 110,000,000 new shares under a General Mandate, involving more than six experienced investors. This move is aimed at raising funds for strategic initiatives and increasing the company’s visibility in the capital markets, potentially generating future opportunities.

Scholar Education Group Announces New Share Subscription to Fund Growth Initiatives

Scholar Education Group has entered into Subscription Agreements to issue 110,000,000 new shares at HK$2.2 per share, representing a discount to recent share prices. The proceeds, estimated at HK$241.3 million, will be used to enhance teaching quality, explore AI projects, and support general corporate purposes. The completion of these subscriptions is contingent upon approval from the Stock Exchange’s Listing Committee, and shareholders are advised to exercise caution.

Scholar Education Group Relocates PRC Headquarters

Scholar Education Group has announced a change in its headquarters and principal place of business in the People’s Republic of China, effective from October 9, 2025. The new address is located in the Shenrun Building, Shenzhen, while the company’s telephone and facsimile numbers remain unchanged. This relocation may indicate strategic positioning within the region, potentially impacting its operations and market presence.

Scholar Education Group Revamps Employee Share Options

Scholar Education Group announced the cancellation of 25,006,500 unvested share options and the re-granting of 22,228,000 new options to its employees. This move aims to incentivize and retain employees by aligning the new options with market conditions and performance targets, potentially impacting the company’s operational dynamics and stakeholder interests.