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China Education Group Holdings Ltd 00839

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Stock XHKG Rating as of
HKD 4.05 +0.13 (3.32%)
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Company Report

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China Education Group's Reduced Transparency Raises Perception of Risks

Cheng Wang

China Education Group is one of the largest private higher education providers in China. Over the years, it has built a strong portfolio of higher vocational education schools. Many of CEG's schools are in economically vibrant areas. Large population inflows and low gross enrollment rates create strong demand for quality education in such areas. We expect CEG to continue benefiting from that.

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Price vs Fair Value

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00839 is trading at a 68% discount.
Price
HKD 3.88
Fair Value
HKD 41.70
Uncertainty
Very High
1-Star Price
HKD 71.35
5-Star Price
HKD 6.61
Economic Moat
Yhjqsr
Capital Allocation
Vzlbqdqjpw

Bulls Say, Bears Say

Bulls

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

Bears

The M&A-driven growth strategy might no longer be feasible under current market conditions.

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Is it the right time to buy, sell, or hold?
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Trading Information

Previous Close Price
HKD 3.92
Day Range
HKD 3.93–4.07
52-Week Range
HKD 3.51–8.50
Bid/Ask
HKD 4.04 / HKD 4.05
Market Cap
HKD 10.60 Bil
Volume/Avg
3.4 Mil / 6.0 Mil

Key Statistics

Price/Earnings (Normalized)
4.71
Price/Sales
1.57
Dividend Yield (Trailing)
8.52%
Dividend Yield (Forward)
8.52%
Total Yield
8.52%

Company Profile

China Education Group Holdings Ltd 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

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Metric
00839
00667
06169
Price/Earnings (Normalized)
 4.7146.592.77
Price/Book Value
 0.600.770.31
Price/Sales
 1.571.100.93
Price/Cash Flow
 3.357.061.69
Price/Earnings
00839
00667
06169

Financial Strength

Metric
00839
00667
06169
Quick Ratio
 0.761.570.77
Current Ratio
 0.851.700.77
Interest Coverage
 4.163.4731.57
Quick Ratio
00839
00667
06169

Profitability

Metric
00839
00667
06169
Return on Assets (Normalized)
 5.49%2.79%8.51%
Return on Equity (Normalized)
 12.83%4.68%15.38%
Return on Invested Capital (Normalized)
 8.69%4.13%11.37%
Return on Assets
00839
00667
06169
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Education & Training Services Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
NWOEF
New Oriental Education & Technology Group Inc Ordinary Shares—Mqds$14.4 Bil
EDU
New Oriental Education & Technology Group Inc ADRCpwjkllcPxzd$14.3 Bil
TAL
TAL Education Group ADRXndhWbz$7.6 Bil
LOPE
Grand Canyon Education Inc—Ywrjcd$3.9 Bil
GHC
Graham Holdings CoYxrgfdndvFrg$3.2 Bil
IDPUF
IDP Education Ltd—Fcyrlq$2.9 Bil
LRN
Stride Inc—Lyl$2.5 Bil
STRA
Strategic Education IncKcxgnmgqTcln$2.4 Bil
LAUR
Laureate Education Inc Shs—Bgpnc$2.2 Bil
COUR
Coursera Inc—Kvfq$1.9 Bil

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