HK Stock Market Move | Education stocks lead the gains, for-profit options are expected to restart, institutions believe that the profit improvement of higher education companies can be expected.

Education stocks lead the gains, as of the time of writing, CHINA EAST EDU (00667) rose 5.2% to 6.88 Hong Kong dollars; CHINA EDU GROUP (00839) rose 4.39% to 3.09 Hong Kong dollars; YUHUA EDU (06169) rose 3.7% to 0.56 Hong Kong dollars; NEW HIGHER EDU (02001) rose 2.46% to 1.25 Hong Kong dollars. On the news front, the announcement of the conversion to for-profit status of the Hunan International Economics College under YUHUA EDU has attracted high attention in the education industry. Shenwan Hongyuan Group issued a research report suggesting to focus on Hong Kong-listed higher education companies. The resumption of for-profit operations is expected, the certainty of income distribution for private colleges is improving, and the momentum for expansion is expected to recover. At the same time, the slowdown in educational investment coupled with capital expenditures peaking, will enhance the profitability of higher education companies. Guoyuan International previously released a research report stating that for-profit schools are beneficial for listed companies in terms of dividend distribution and debt relief. Although the process of converting to for-profit status requires transferring assets such as land and real estate and paying back taxes in the short term, in the long run, it will lead to a revaluation of assets in the market. Currently, only Yuhua has been approved for this, which could help in the short term with emotional and valuation corrections. If other listed companies follow suit in the future, it could lead to a long-term revaluation of the sector's value.