Investment Summary

Wisdom education mainly provides private premium education, including elementary, middle, high schools and international programmes in South China in Dongguan, Huizhou, Panjin, Weifang and Jieyang respectively. Thanks to the robust growth in Guangdong’s economy, the future development of Greater Bay Area and its high quality of education, we believe Wisdom will become the fastest growth K12 operators in the China education sector. Thus, we initiate an “Accumulate” rating on Wisdom, and a target price of HK$7.81 based on earnings in 19F assuming 1x PEG (35% CAGR on earnings for FY18E-20E), with 13.2% potential upside. (Closing price at 16 Jul 2018)

Company Background

Founded in 2003, Wisdom is operating 7 schools in Dongguan, Huizhou, Jieyang, Weifang, and Panjin and providing private premium education for PRC curriculum programmes, including elementary, middle, high schools. Besides domestic curriculum, Wisdom also provides international programmes for high school students. It offers a wide-range of courses for students, such as sports, art, music and Chinese culture, in order to facilitate the well-rounded development of students.