China Gingko Education Group Co., Ltd. (1851) AI Stock Analysis

• Market Cap: HK$1.81B
• Dividend Yield: N/A
• Average Volume (3M): 172.87K
• Price to Earnings (P/E): 11.4
• Beta (1Y): >-0.01
• Revenue Growth: 1.40%
• EPS Growth: -15.24%
• Country: HK
• Employees: 1,106
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 0.21
• Shares Outstanding: 500,000,000
• 10 Day Avg. Volume: 139,215
• 30 Day Avg. Volume: 172,871
• PEG Ratio: 0.67
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.92
• P/FCF Ratio: 3.52
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: HK$4.00 ▲(40.35% Upside)

The score is driven mainly by strong financial performance (high margins and improved leverage), partially offset by missing recent cash-flow visibility. Technicals are supportive but very overbought, raising near-term pullback risk. Valuation appears favorable with a low P/E, though dividend support cannot be assessed due to missing yield data.

Positive Factors

High profitability margins

Very high and broad-based margins indicate durable operating efficiency and pricing power across K-12, vocational and online segments. Sustained margins support internal cash generation, fund reinvestment in curriculum and EdTech, and provide a buffer versus cyclical downturns.

Improving leverage and solid balance sheet

Low leverage and a stable equity ratio reduce financial risk and increase strategic optionality for investment or M&A. An improving debt position and mid-teens ROE show efficient capital use and greater resilience to funding shocks over the coming months.

Historically strong cash generation

Solid 2023 cash conversion demonstrates the company can turn reported profits into real cash, supporting capex, working capital and strategic initiatives without heavy external financing. This historical cash generation underpins sustainable funding for medium‑term growth.

Negative Factors

Missing 2024 cash flow visibility

Absence of 2024 cash flow data introduces structural uncertainty around current liquidity, free cash flow trends and working capital dynamics. That gap impedes confident assessment of debt service capacity, capital allocation and resilience through near‑term operational changes.

Modest revenue growth

Single‑digit top‑line growth in a competitive and digitally shifting education market limits scalability of earnings. Without faster revenue expansion or market share gains, sustaining long‑term return growth depends on margin maintenance or new product channels, increasing execution risk.

Negative EPS growth

A significant decline in EPS signals pressure on per‑share profitability despite strong aggregate margins. Persistent EPS erosion can reflect dilution, one‑offs, or operational challenges that undermine shareholder returns and complicate long‑term performance comparisons.

China Gingko Education Group Co., Ltd. Business Overview & Revenue Model

Company Description

China Gingko Education Group Company Limited, together with its subsidiaries, provides higher education services in the People's Republic of China. It operates in two segments, Higher Education, and Hotel Operation. The company operates Gingko College of Hospitality Management that offers a range of courses in the management, literature, engineering, education, economics, and arts disciplines; and Chengdu Yinxing Hotel Vocational Skills Training School. Its college provides 27 bachelor's degree programs and 27 junior college diploma programs to 14,945 students. The company also provides social, hotel operations and management, education consultancy, and assets management services. China Gingko Education Group Company Limited was founded in 2002 and is headquartered in Chengdu, the People's Republic of China.

How the Company Makes Money

China Ginkgo Education Group Co., Ltd. generates revenue primarily through its various educational offerings, including tuition fees from K-12 and vocational training programs, sales of educational materials, and subscription fees from online learning platforms. The company has established partnerships with schools, educational institutions, and corporate clients to provide tailored training solutions, which further diversifies its revenue streams. Additionally, the increasing demand for online education and skill enhancement in China has contributed significantly to its earnings, as the company capitalizes on the growing trend of digital learning.

China Gingko Education Group Co., Ltd. Financial Statement Overview

Summary

Strong profitability and operating efficiency (2024 gross margin 56.35%, net margin 41.11%, EBITDA margin 52.94%) plus improving leverage metrics (debt-to-equity 0.33) support a solid score. The main offset is higher uncertainty around current liquidity because 2024 cash flow data is missing.

Income Statement

The company has shown consistent revenue growth over the years, with a revenue growth rate of 5.02% from 2023 to 2024. Gross profit margin remains strong at 56.35% in 2024, indicating efficient cost management. The net profit margin has improved slightly to 41.11%, reflecting robust profitability. Both EBIT and EBITDA margins are impressive at 41.72% and 52.94%, respectively, showcasing operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a decreasing debt-to-equity ratio of 0.33 in 2024, indicating reduced financial leverage. The return on equity (ROE) has increased to 16.34%, highlighting effective use of equity capital. The equity ratio has remained stable at around 59.12%, suggesting solid financial stability and lower financial risk.

Cash Flow

Cash flow metrics are limited due to missing data for 2024. However, the 2023 data shows a strong operating cash flow to net income ratio of 1.60, indicating healthy cash generation. The free cash flow to net income ratio was 0.65 in 2023, reflecting adequate free cash flow generation relative to net income. The absence of cash flow data for 2024 poses a risk in assessing current liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	379.01M	372.69M	354.86M	286.19M	226.74M	176.90M
Gross Profit	205.28M	209.96M	213.11M	162.24M	103.92M	76.11M
EBITDA	193.18M	197.29M	209.19M	152.80M	83.94M	51.68M
Net Income	146.86M	153.21M	148.03M	85.01M	38.68M	16.93M
Balance Sheet
Total Assets	1.39B	1.59B	1.46B	1.41B	1.20B	1.17B
Cash, Cash Equivalents and Short-Term Investments	72.58M	273.87M	215.71M	199.85M	156.31M	152.53M
Total Debt	248.75M	311.01M	339.95M	401.29M	389.66M	399.64M
Total Liabilities	346.95M	648.53M	674.70M	772.22M	649.93M	657.89M
Stockholders Equity	1.04B	937.91M	784.70M	636.67M	551.66M	512.98M
Cash Flow
Free Cash Flow	106.37M	97.50M	96.36M	58.63M	37.70M	-42.39M
Operating Cash Flow	203.47M	205.69M	237.36M	212.00M	119.35M	78.56M
Investing Cash Flow	-105.25M	-108.18M	-140.99M	-153.37M	-76.66M	-95.95M
Financing Cash Flow	-107.42M	-41.77M	-81.75M	-19.67M	-37.75M	-54.03M

China Gingko Education Group Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1851, the sentiment is Positive. The current price of 2.85 is below the 20-day moving average (MA) of 3.28, above the 50-day MA of 2.69, and above the 200-day MA of 1.79, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 79.34 is Negative, neither overbought nor oversold. The STOCH value of 72.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1851.

China Gingko Education Group Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1756	74 Outperform	HK$756.00M	1.53	11.13%	―	13.88%	1.52%
1851	73 Outperform	HK$1.81B	11.41	15.11%	―	1.40%	-15.24%
6913	72 Outperform	HK$366.85M	3.93	5.05%	11.00%	15.28%	-23.69%
2779	69 Neutral	HK$932.98M	2.32	9.80%	11.09%	0.87%	9.69%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
1569	56 Neutral	HK$830.89M	-7.11	-2.11%	5.30%	-20.92%	-121.60%