Morningstar

China New Higher Education Group Ltd Registered Shs Unitary 144A/Reg S 02001

Morningstar Rating
Unlock
Stock XHKG Rating as of
HK$2.26 +0.15 (7.11%)
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
02001 is trading at a 194% premium.
Price
HK$2.26
Fair Value
HK$9.70
Uncertainty
Very High
1-Star Price
HK$1.79
5-Star Price
HK$2.63
Economic Moat
Hrbb
Capital Allocation
Ldhtmxbtt

Bulls Say, Bears Say

Bulls

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

Bears

Growth will slow as M&A driven strategy is no longer feasible.

Show More

Trading Information

Previous Close Price
HK$2.11
Day Range
HK$2.08–2.26
52-Week Range
HK$1.45–2.80
Bid/Ask
HK$2.20 / HK$2.26
Market Cap
HK$3.49 Bil
Volume/Avg
2.3 Mil / 2.2 Mil

Key Statistics

Price/Earnings (Normalized)
4.17
Price/Sales
1.40
Dividend Yield (Trailing)
10.66%
Dividend Yield (Forward)
10.66%
Total Yield
10.66%

Company Profile

China New Higher Education Group, or CNHE, is a leading higher education group in China. Its school network spans seven provinces. Total enrolled students reached about 140,000 for the academic year 2023/24 from 33,462 students as of December 2016. The rapid expansion is primarily attributable to school acquisitions. CNHE currently operates eight schools, up from only two schools in 2016.
Sector
Consumer Defensive
Industry
Education & Training Services
Stock Style Box
Small Value
Total Number of Employees
9,760
Website
https://www.xingaojiao.com

Competitors

Valuation

View More
Metric
02001
00667
06169
Price/Earnings (Normalized)
 4.1718.092.79
Price/Book Value
 0.851.260.25
Price/Sales
 1.401.630.79
Price/Cash Flow
 2.826.231.63
Price/Earnings
02001
00667
06169

Financial Strength

Metric
02001
00667
06169
Quick Ratio
 0.111.590.34
Current Ratio
 0.301.670.34
Interest Coverage
 7.692.9217.23
Quick Ratio
02001
00667
06169

Profitability

Metric
02001
00667
06169
Return on Assets (Normalized)
 8.33%3.92%6.15%
Return on Equity (Normalized)
 20.98%6.67%10.54%
Return on Invested Capital (Normalized)
 13.40%5.46%8.32%
Return on Assets
02001
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
SlfpmtfvZvhmx$12.6 Bil
 TAL Education Group ADR
TAL
MqdVhl$6.9 Bil
 Grand Canyon Education Inc
LOPE
—Flqvwl$4.1 Bil
 Stride Inc
LRN
—Tgq$3.6 Bil
 Graham Holdings Co
GHC
KjdwzvtZttq$3.5 Bil
 Adtalem Global Education Inc
ATGE
KpbpdqvksXvkmznk$2.7 Bil
 Laureate Education Inc Shs
LAUR
—Krd$2.4 Bil
 Strategic Education Inc
STRA
DbqfnhbcwFpx$2.2 Bil
 Afya Ltd Class A
AFYA
—Lrrmh$1.5 Bil
 Perdoceo Education Corp
PRDO
—Szrdv$1.4 Bil

Sponsor Center