Interpreting New Stocks| The performance of Excellence Education Group, the parent company of Zuoyue Rui, has been boosted by the expansion of new businesses, and the sustainability of growth is still being tested.

With the strong support of the government and the positive response of higher education institutions to digital policies, the market size of China's higher education teaching digitalization market increased from 12.7 billion yuan in 2020 to 21.3 billion yuan in 2024, with a compound annual growth rate of 13.7%. During the process of rapid market expansion, industry pioneers also enjoyed a significant amount of market dividends. Take Shanghai Zhiyue Rui Xin Digital Technology Co., Ltd. (hereinafter referred to as "Zhiyue Rui Xin"), which recently passed the hearing of the Hong Kong Stock Exchange, for example. Since its introduction of the brand "Zhihuitree" in 2013, the company has developed into a well-known provider of digital teaching solutions for higher education institutions in China. According to public information, in 2024, Zhiyue Rui Xin ranked second in terms of revenue among all companies in the domestic higher education teaching digitalization market, with a market share of 4%; and ranked first in terms of revenue among all companies in the domestic higher education digital teaching content production market, with a market share of 7.3%. The company's revenue scale has continued to grow rapidly in recent years. From 2022 to the first half of 2025, the company's revenue was 400 million yuan, 653 million yuan, 848 million yuan, and 275 million yuan, respectively. During the same period, Zhiyue Rui Xin's gross profit margin has generally maintained at a relatively high level, at 44.1%, 60.7%, 61.9%, and 46.9%, respectively. However, due to the seasonal nature of the industry, the company's net profit attributable to shareholders in the first half of this year was -98.956 million yuan, which was higher than the -88.855 million yuan in the same period last year. In the period from 2022 to 2024, Zhiyue Rui Xin's net profit attributable to shareholders was -59.11 million yuan, 81.421 million yuan, and 105 million yuan, respectively. With the continued growth of its performance, Zhiyue Rui Xin is on the verge of listing on the Hong Kong Stock Exchange. Can it impress investors with its fundamentals after landing on the Hong Kong stock market? Riding the wave of the digital economy, the company's performance continues to deliver results Zhiyue Rui Xin's revenue mainly comes from two types of services and products, including digital teaching content services and products, and digital teaching environment services and products. In recent years, through close cooperation with customers and the continuous application of leading technologies, Zhiyue Rui Xin has intensively launched new technologies and products. In 2020, Zhiyue Rui Xin launched virtual simulation development; two years later, the company launched knowledge graph construction to help customers provide more interactive, attractive, and personalized learning experiences for their students. As a core business of Zhiyue Rui Xin, the revenue from the company's digital teaching content services and products business has always accounted for more than 80% during the reporting period, and there has been a trend of further increase in recent years. Currently, the company's business covers 12 subject categories and 92 majors recognized by the Ministry of Education. Further subdivided, digital teaching content services and products include digital courses, knowledge graphs, and virtual simulation as three sub-business units. In 2022, the revenue share of digital courses was as high as 73.9%, while the revenue share of knowledge graphs and virtual simulation was 1.5% and 8.5% respectively at that time. However, by 2024, the revenue share of knowledge graphs had reached 40.1%, close to the revenue share of digital courses at 41.4% during the same period. In the first half of this year, the revenue share of knowledge graphs increased to 54.7%, becoming the "main force" contributing to revenue growth. With the help of this product, the revenue share of digital teaching content services and products in the first half of this year reached 91.3%, a new high in recent years. Zhiyue Rui Xin's full range of digital teaching environment services and products is aimed at assisting higher education institutions in establishing efficient and integrated digital environments. Broadly speaking, this business category can be further divided into cloud LMS (Learning Management System) and digital classroom business. Based on the performance in the first half of this year, the revenue share of these two businesses was 5.4% and 3.4% respectively, both showing a slight decline compared to the same period last year. With the increase in revenue scale, Zhiyue Rui Xin's various profitability indicators have also been optimized to varying degrees. From 2022 to 2024, the company's gross profit was 177 million yuan, 396 million yuan, and 525 million yuan, with corresponding gross profit margins of 44.1%, 60.7%, and 61.9% respectively. In the first half of this year, the company's gross profit was 129 million yuan, with a gross profit margin of 46.9%, an increase of 0.8 percentage points from the same period last year. Looking at the trend of net profit attributable to shareholders, this indicator has been continuously optimized from 2022 to 2024, reaching a new high of 105 million yuan in 2024. In the first half of this year, the company's net profit attributable to shareholders was negative, due to the impact of the seasonal nature of the industry, with less confirmed revenue and profits in the first half of the year. Consolidating growth logic with the strategic layout of the Knowledge Graph Construction Center? With the increasing maturity of new generation technologies such as artificial intelligence, big data, and cloud services, people will further focus on meeting personalized needs through intelligent analysis and management tools. Taking the university knowledge graph as an example, as the core brain and engine of the future "AI + Education" era, the knowledge graph can not only help teachers visualize, personalize, and systematize fragmented teaching resources to provide intelligent education services, but also promote students to engage in personalized deep learning and adaptive learning from their own perspectives, thereby achieving a scientific learning path. Since the introduction of the knowledge graph business in 2022, Zhiyue Rui Xin's business in this area has rapidly expanded. As of the end of June this year, Zhiyue Rui Xin had delivered over 8,700 knowledge graphs for multiple subject categories such as engineering, medicine, science, and agriculture. It is reported that Zhiyue Rui Xin's artificial intelligence knowledge graph construction is a key tool for digitalizing content, helping institutions to improve their courses and optimize talent development. This tool simplifies the teaching process through structured knowledge, clear objectives, data-driven learning, and precise evaluation. In terms of effectiveness, it can not only reduce the workload of teachers in lesson planning and assessment, but also achieve personalized learning for students and visualize the results. In order to further expand the rapid growth of knowledge graph construction and promote efficient centralized management and delivery, Zhiyue Rui Xin plans to establish one or two knowledge graph construction centers in the future. Behind Zhiyue Rui Xin's ambitious expansion plan is the considerable growth rate of the track it is in. Currently, strengthening and merging support for digital and intelligent teaching methods, hybrid learning models, and personalized teaching methods are expected to be important trends for the domestic higher education teaching digitalization market. With a variety of factors catalyzing this growth, according to institutional estimates, the market size of China's higher education teaching digitalization market in 2024 is 21.3 billion yuan, and is expected to expand to 45.3 billion yuan by 2029, with a compound annual growth rate of 16.3% during this period. Specifically, the compound annual growth rate of the higher education digital teaching content production market is expected to be 18.8%, reaching 23.1 billion yuan by 2029; the compound annual growth rate of the higher education digital teaching environment market is expected to be 14.1%, reaching 22.2 billion yuan by 2029. With the drive of competitive new products and tools in the past few years, the number of Zhiyue Rui Xin's customers has increased from 1,174 in 2022 to 1,738 in 2024, with the number of major customers increasing from 245 to 449. During the same period, the average revenue per customer and the average revenue per major customer have also grown to varying degrees. The combination of quantity and price increases indicates that the company seems to have entered a new growth cycle. After failing to go public in the A-share market for three years, Zhiyue Rui Xin is now one step away from completing its listing on the Hong Kong Stock Exchange. If it fulfills its dream of listing on the Hong Kong stock market, will Zhiyue Rui Xin become a "potential stock" in the new stock market with its recent strong performance growth? GMTEight will continue to monitor the situation.