Morningstar

China Education Group Holdings Ltd 00839

Morningstar Rating
Unlock
Stock XHKG Rating as of
HK$5.40 +0.21 (4.05%)
View Full Chart
As of Delayed Price Closed

Company Report

View Archive

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.

Read Full Report

Price vs Fair Value

View History
00839 is trading at a 568% premium.
Price
HK$5.40
Fair Value
HK$47.90
Uncertainty
Very High
1-Star Price
HK$67.35
5-Star Price
HK$7.72
Economic Moat
Mlhhpm
Capital Allocation
Xjqjqsbn

Bulls Say, Bears Say

Bulls

Negative sentiment toward the education sector could ease, with no additional regulatory headwinds.

Bears

Large capital expenditure will weigh on cash flow and margins

Show More

Trading Information

Previous Close Price
HK$5.19
Day Range
HK$5.06–5.41
52-Week Range
HK$3.51–6.87
Bid/Ask
HK$5.39 / HK$5.40
Market Cap
HK$14.65 Bil
Volume/Avg
8.2 Mil / 5.9 Mil

Key Statistics

Price/Earnings (Normalized)
8.61
Price/Sales
2.05
Dividend Yield (Trailing)
6.57%
Dividend Yield (Forward)
7.66%
Total Yield
6.57%

Company Profile

China Education Group is a leading ultra-large-scale private education group in China with 30 years of experience in higher education operations. CEG's schools offer both higher vocational education and secondary vocational education. The school network spans domestic China and overseas. CEG also offers continuing education to full-time working adults. The group's total enrolled full-time students in China expanded more than 3 times over the last six years to about 248,000 as of August 2023. The rapid growth is primarily attributable to school acquisitions. CEG currently operates 14 schools, up from only 3 in 2017.
Sector
Consumer Defensive
Industry
Education & Training Services
Stock Style Box
Mid Value
Total Number of Employees
16,468
Website
http://www.chinaeducation.hk

Competitors

Valuation

View More
Metric
00839
00667
06169
Price/Earnings (Normalized)
 8.6118.092.79
Price/Book Value
 —1.260.25
Price/Sales
 2.051.630.79
Price/Cash Flow
 —6.231.63
Price/Earnings
00839
00667
06169

Financial Strength

Metric
00839
00667
06169
Quick Ratio
 0.761.590.34
Current Ratio
 0.851.670.34
Interest Coverage
 4.162.9217.23
Quick Ratio
00839
00667
06169

Profitability

Metric
00839
00667
06169
Return on Assets (Normalized)
 5.49%3.92%6.15%
Return on Equity (Normalized)
 12.83%6.67%10.54%
Return on Invested Capital (Normalized)
 8.69%5.46%8.32%
Return on Assets
00839
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
VkrqlhyxKqsf$12.6 Bil
 TAL Education Group ADR
TAL
HpcvQhls$6.9 Bil
 Grand Canyon Education Inc
LOPE
—Vxttgk$4.1 Bil
 Stride Inc
LRN
—Frvf$3.6 Bil
 Graham Holdings Co
GHC
XxdcsfysHyws$3.5 Bil
 Adtalem Global Education Inc
ATGE
PkpyqghjzGtzqzr$2.7 Bil
 Laureate Education Inc Shs
LAUR
—Jxd$2.4 Bil
 Strategic Education Inc
STRA
JvknxpvjjRrbm$2.2 Bil
 Afya Ltd Class A
AFYA
—Khsfbfk$1.5 Bil
 Perdoceo Education Corp
PRDO
—Syjp$1.4 Bil

Sponsor Center