UBS issued a research report thatFlickyZhongjiao Holdings' revenue and operating profit in the first half of fiscal year 2024 beat expectations, but its net profit performance was slightly lower than expected. According to the bank, the enrollment of students controlled by secondary education has increased by 8%.Flicky.5%, and each student's income increased by 9%, driving the company's operating income to increase by 18% in the first half of this year, 3% higher than the bank and market expectations.FlickyAs for the 16% increase in operating profit, which is higher than the bank and the market's expectations of 5% and 1% respectively, it also means that the operating profit margin shrinks by 100 basis points year-on-year.
UBS also expects that Zhongjiao Holdings will generate a cumulative operating cash flow of 11 billion yuan in the future, which will not only cover the company's capital expenditure, but also have the remaining funds for dividend distribution. In view of the growth in performance and more capacity expansion in the first half of this year, the bank raised its revenue forecast for the fiscal year 2024-2026 by 1% to 2%, and its operating profit forecast for the same period by 3% to 5%. Reflects the company's better operating leverage and higher government subsidies It also raised its net profit forecast for the same period by 2% to 4%, based on the company's active business development, offset by higher taxes and minority shareholders' interests. Based on the above factors, UBS raised the target price of Zhongjiao Holdings from 8.Flicky.4 was downgraded to HK $7.8, which is equivalent to a price-to-earnings ratio of 9 times forecast for this year, maintaining a "buy" rating.
