A few days ago, Sigle Education (HK:01769), which is listed on the Hong Kong Stock Exchange, issued an announcement on the "profit warning", stating that its revenue in 2020 is expected to increase by approximately 5% year-on-year (to approximately 747 million yuan), and its net profit is approximately 4,800. Between ten thousand yuan and 55 million yuan.
It is understood that Si Le Education’s net profit in 2019 was 94.8 million yuan. This also means that the net profit of Sigle Education in 2020 will decline by about 42.0% to 49.4% year-on-year. At the same time, its adjusted net profit is expected to be no less than 80 million yuan, 136 million yuan in the same period in 2019.
Affected, Si Le Education’s share price experienced a waterfall decline on January 18, 2021.
Beduo Finance found that Si Le Education fell 41.9% to 8.20 Hong Kong dollars in intraday trading. As of the close of January 18, its stock price closed at 9.25 Hong Kong dollars, a single-day drop of 34.49%, and its total market value was 5.14 billion Hong Kong dollars, which was about 2.7 billion Hong Kong dollars lost from the previous trading day.
Earlier, the management of Silole Education Group had an outlook on its business scope and launched the "550 Strategic Plan"-in the next 5 years, more than 500 branch schools will be built in more than 50 cities to achieve a revenue target of 50 100 million yuan.
Regarding the decline in performance, Silvio Education explained that due to the impact of the new crown pneumonia epidemic, it provided special discounts and other preferential terms and arrangements to students, resulting in a decrease of about 10% on average per class hour compared with 2019, which in turn reduced gross profit.
At the same time, as the learning centers that started operations in 2019 and 2020 are still in the growth stage in 2020, the revenue generated is relatively limited, and the direct operating costs (including staff costs, etc.) are still at a relatively high level relative to the revenue generated. Lead to a decrease in gross profit.
However, the number of learning centers operated by Sigle Education has increased from 100 in 2019 to 152 in 2020. The total number of tutoring hours provided in the second half of 2020 has increased by approximately 28% compared with the same period in 2019. In addition, the number of students enrolled in the winter semester beginning in January 2021 has increased by about 40% compared with the same period in 2020.
Guosheng Securities released a research report saying that, as the regional leader of K12 extracurricular training in South China, it will deeply cultivate the Guangdong market and enter the Yangtze River Delta market on this basis, strengthening the growth of refined operations. At the same time, Guosheng Securities maintains an “overweight” rating on Sigle Education.
According to the profit forecast, Guosheng Securities adjusted the adjusted net profit forecast of Sigle Education for 2020-2022 to 0.80/1.38/198 million (the original forecast is 1.66/2.33/316 million of the parent net profit), an increase of -41.3%/73.0 %/43.4%.
According to the data, Siole Education was listed on the Hong Kong Stock Exchange on June 21, 2019, with an IPO price of HK$3.68 per share and a net proceeds of approximately 384 million yuan. At present, the company has sub-brands such as Going to School, Lexue, Miaowei English, Yale Chinese, Double Teacher, Online School, Sigle Online, and Future Players.
According to previous financial reports, in the first half of 2020, Sigle Education achieved revenue of 326 million yuan, a year-on-year increase of 10.2%; net profit was 46.323 million yuan, a year-on-year increase of 38.4%; adjusted net profit was 64.28 million yuan, a year-on-year increase of 6.8%. And its latest announcement shows that Sigle Education's full-year net profit level in 2020 may be "halved."
In fact, with the growth of scale, the slowdown in the growth rate of thinking music education has become prominent. Take revenue as an example. Its revenue growth rate in 2017 was 119.9% year-on-year. In 2018, it dropped sharply to 31.11%. In 2019, it rebounded slightly to 44.22%. In the first half of 2020, it dropped to an increase of 36.4%.
Throughout 2020, the revenue growth rate of Sigle Education has fallen again. According to the announcement, Siile Education expects its 2020 revenue to increase by approximately 5% year-on-year. It is understood that its revenue in 2019 was 711 million yuan. According to calculations, the revenue of Sigle Education in 2020 is about 747 million yuan.
Similarly, the growth rate of Sigle Education’s net profit increased by 243.9% year-on-year in 2017 and 94.72% year-on-year in 2018. Compared with 2017, the growth rate has been "halved". In 2019, its net profit growth rate dropped to 36.4%.