Hong Kong stock concept tracking | The "Outline of the Plan for Building a Powerful Country with Education" has been released, and support for private education has increased (with concept stocks)

The Central Committee of the Communist Party of China and the State Council recently issued the "Outline of the Plan for Building an Educational Power (2024-2035)", which aims to enhance the key teaching capabilities of vocational schools; optimize the implementation of high-level vocational colleges and professional construction plans, and establish a number of high-level undergraduate vocational schools with distinctive characteristics. The foundation education system should be strengthened, benefiting private education; the construction of a modern vocational education system should be accelerated, benefiting vocational training and higher education; and the development of national strategic scientific and technological strength should be cultivated, benefiting information technology education. It was pointed out that the trend of standardization and regularization of extracurricular training continues. Promote the overall implementation of "double reduction" and the improvement of teaching quality; consolidate the achievements of extracurricular training governance, strictly control subject-specific training, and standardize non-subject-specific training. Suggestions include paying attention to K12 education and training companies; in vocational education, widen the channels for student growth and talent development through vocational and general education integration. Education-related Hong Kong stocks: CHINA EAST EDU (00667): 1) With cost and expense control, the company's performance in 2024 is expected to exceed expectations further; 2) Huaxi expects 2024 revenue to increase by 3-4%, in line with expectations. The company has been dealing with the impact of the pandemic on enrollment for the past two years, and the cancellation of some low-price programs, closure of loss-making schools, and IT pressure will have an impact. However, the enrollment recovery after the pandemic in 2025 is expected, with high school students expected to contribute additional growth; the current registration forecast for 2025 is expected to increase by more than 10%, reflecting a positive trend, with over half of New Oriental already recovered and automotive maintenance continuing to grow; 3) In the long run, the company's regional center model has been successful in Anhui and Shandong, and if the seven centers achieve full capacity in the future, another company could be created. TIANLI INT HLDG (01773): The previous decline in stock price was analyzed by institutions mainly due to: 1) Some delays in self-built and leased facilities due to external factors, but most of the annual enrollment growth comes from the progress of existing schools, with little short-term impact; 2) The company's insistence on fee standards in entrusted operations may slightly affect growth rate; 3) Some investors are concerned about the impact of government repayments on entrusted operations, but the entrustment itself is a prepaid model. After transitioning from a combined elementary and middle school model to a focus on high school, improving the quality of high school education is a core challenge. With 272 students already achieving QS top 50 rankings this year (out of the planned 300 by 2027), with 30 students admitted to Tsinghua and Peking University, progress has been made in competitions, diversified college admissions, and other areas. This measure is sufficient to address the downward trend in population in the next 10 years. In general, Huaxi's research on the education industry believes that the company is a relatively scarce growth target among education companies, with 1) the core business of high school maintaining around 30% revenue growth each year + steadily increasing net profit margin during the growth period; 2) the high net-profit-margin entrusted business has not only made breakthroughs in third- and fourth-tier cities but also in Zhejiang, Jiangsu, Guangdong, doubling growth is expected to be maintained according to the progress of reserve projects, with 33 sections currently, expected to increase to 100 sections by 2027; 3) the high net-profit-margin literacy business is currently maintaining stable growth, and is expected to penetrate into the entrusted school business in the future, with growth potential in gaming research, competitions, AI, supply chain, and other areas.