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Edvantage Group Holdings Ltd 00382

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Stock XHKG Rating as of
HK$2.52 +0.13 (5.44%)
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As of Delayed Price Closed

Company Report

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China Education Sector: Shares Deeply Undervalued as For-Profit Classification Remains an Overhang

Cheng Wang

Share prices of the higher education names under our coverage, China Education Group, or CEG; China New Higher Education, or CNHE; China YuHua Education; and Edvantage, are trading near historical lows, with investors staying sidelined due to for-profit classification overhang. It's been two years since some schools received preliminary approval, but none have been officially classified as for-profit schools. Nonetheless, our base case remains that for-profit classification will proceed. We do not think China will make all higher education schools nonprofit as funding more education adds to the already stretched finances of local governments.

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Price vs Fair Value

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00382 is trading at a 12% premium.
Price
HK$2.52
Fair Value
HK$5.80
Uncertainty
Very High
1-Star Price
HK$19.51
5-Star Price
HK$1.19
Economic Moat
Dgxrkv
Capital Allocation
Trsyxyql

Bulls Say, Bears Say

Bulls

Negative sentiment toward the education sector will ease; there are no further regulatory actions.

Bears

Tuition fee hikes will not be allowed before successful for-profit classification.

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Trading Information

Previous Close Price
HK$2.39
Day Range
HK$2.34–2.52
52-Week Range
HK$1.95–2.83
Bid/Ask
HK$2.51 / HK$2.52
Market Cap
HK$2.88 Bil
Volume/Avg
2.9 Mil / 757,512

Key Statistics

Price/Earnings (Normalized)
3.67
Price/Sales
1.20
Dividend Yield (Trailing)
7.38%
Dividend Yield (Forward)
7.38%
Total Yield
7.38%

Company Profile

Edvantage Group is a leading private education group based in Greater Bay Area. Edvantage primarily offers higher education. It also provides secondary vocational education and non-formal vocational education service.Edvantage currently operates nine schools across domestic China and overseas, and more than 98% of its revenue is generated domestically. The total number of enrolled students exceeded 95,000 as of October 2023 from 32,217 as of August 2018. The rapid expansion was achieved through organic growth and school acquisitions.
Sector
Consumer Defensive
Industry
Education & Training Services
Stock Style Box
Small Value
Total Number of Employees
7,800
Website
https://www.edvantagegroup.com.hk

Competitors

Valuation

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Metric
00382
00667
06169
Price/Earnings (Normalized)
 3.6718.092.79
Price/Book Value
 0.701.260.25
Price/Sales
 1.201.630.79
Price/Cash Flow
 2.386.231.63
Price/Earnings
00382
00667
06169

Financial Strength

Metric
00382
00667
06169
Quick Ratio
 0.751.590.34
Current Ratio
 0.761.670.34
Interest Coverage
 17.032.9217.23
Quick Ratio
00382
00667
06169

Profitability

Metric
00382
00667
06169
Return on Assets (Normalized)
 8.91%3.92%6.15%
Return on Equity (Normalized)
 20.18%6.67%10.54%
Return on Invested Capital (Normalized)
 12.47%5.46%8.32%
Return on Assets
00382
00667
06169

Education & Training Services Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
New Oriental Education & Technology Group Inc ADR
EDU
WzzydqxhhWwym$12.6 Bil
 TAL Education Group ADR
TAL
LtkjTjjv$6.9 Bil
 Grand Canyon Education Inc
LOPE
—Gpgnn$4.1 Bil
 Stride Inc
LRN
—Slwh$3.6 Bil
 Graham Holdings Co
GHC
WjdcqrnrhGcysc$3.5 Bil
 Adtalem Global Education Inc
ATGE
YbdbythPtmbw$2.7 Bil
 Laureate Education Inc Shs
LAUR
—Lkb$2.4 Bil
 Strategic Education Inc
STRA
PypjnzzqKclp$2.2 Bil
 Afya Ltd Class A
AFYA
—Qlrxw$1.5 Bil
 Perdoceo Education Corp
PRDO
—Nsqb$1.4 Bil

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