China New Higher Education Group Limited (2001.HK) Excellent orangic and tuition fee growth, but with a high debt ratio May 17, 2019 322

PSR Recommendation: BUY Status: Maintained
Target Price: HKDHKD4.26

Investment Summary
CNHEG announced its 2018 results. During the period, organic growth was strong, and
tuition and accommodation fees increased steadily, but the debt ratio jumped
significantly, which may affect the progress of acquisition in the future. In addition,
Chinese Premier Li Keqiang mentioned in the government report that there will be a one
million enrollment expansion for higher vocational colleges in 2019. At the same time,
the State Council also announced the “National Vocational Education Reform
Implementation Plan”, hoping to improve the quality of higher vocational education.
Based on the DCF model, we derive a TP of HKD4.26, and giving a “Buy” rating, with
35.7% potential upside. (Closing price as at 14 May)

About the author

Profile photo of Terry Li

Terry Li
Investment Analyst

Graduated from Lingnan University, with Master of Science in International Banking and Finance and Bachelor of Business Administration respectively. Specializes in analyzing company fundamentals and valuation to explore investment opportunities in TMT, Education and Financial industry.

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