HK Stock Market Move | Education stocks are all on the rise as policies propose expanding the supply of quality educational resources. Privately-run higher education is the first to benefit as Hong Kong stocks rebound.

In the education sector, stocks are rising across the board. As of the time of writing, CHINA EDU GROUP (00839) is up 5.65% at HK$5.05, BESTSTUDY EDU (03978) is up 5.12% at HK$3.08, NEW ORIENTAL-S (09901) is up 3.85% at HK$47.15, and CHINA EAST EDU (00667) is up 3.33% at HK$3.1. On the news front, on October 28th, the General Office of the State Council issued "Several Measures to Accelerate the Improvement of the Support Policy System for Childbirth and Promote the Construction of a Childbirth-Friendly Society." Regarding education, the document proposes expanding the supply of high-quality educational resources and establishing childbirth subsidies. Cinda believes that the policy aims to improve the support policy system and incentive mechanism for childbirth, providing strong support for achieving a moderate fertility level and promoting high-quality population development; the policy is expected to stimulate an increase in the birth rate, thereby driving an increase in education demand. Zheshang released a research report stating that K12 summer/third-quarter revenue has generally maintained a growth of 20%-40%, and next quarter's revenue growth is expected to slow down. Profitability will continue to differentiate; considering that the dynamic valuation levels of the education and training sector are relatively high within the consumer sector, companies with solid fundamentals should pay attention to the matching of capacity expansion and enrollment growth pace in the short term. In addition, the private higher education sector is benefiting first from the rebound in Hong Kong stocks, the beginning of the Fed interest rate cut cycle, and policy stimulation from the central bank. If Hong Kong stocks experience an overall rebound, the high education sector with low valuations in the past two years could perform well in the upcoming market.