Guolian Minsheng Securities: The performance and valuation of the education sector receives a "Davis double hit", maintaining a "recommended" rating for the industry.

Guolian Minsheng Securities released a research report stating that the education industry is experiencing a "three-dimensional resonance" of policy marginal improvement, industry supply clearance, and industry demand release. The performance in the first quarter is worth looking forward to, with increasingly significant valuation advantages, and is expected to achieve a "David double hit" of performance and valuation. At the same time, the education industry is an important application scenario for AI, and the rise of AI+education is expected to enhance the industry's valuation space. The firm believes that the timing is right for investing in the education industry, and maintains a "recommended" rating for the industry. Guolian Minsheng Securities main points are as follows: Accelerated commercialization of "AI+education", industry leaders benefiting deeply The "Fifteen-Year Plan" indicates the need to coordinate the construction of a strong education country, strong science and technology country, and strong talent country, to achieve the basic formation of a pattern of integrated development of education, science and technology, and talents. It fully implements the "AI+" action. Innovation in smart study companions, intelligent teachers, and other teaching models, deepening the application of precise teaching, personalized learning, intelligent tutoring, etc. With the rapid development of the AI industry, "AI+education" has become a trend. The country has launched the "AI+" action, introduced policies for science education in primary and secondary schools, and supported the construction of a strong education country. Industry leaders are actively deploying "AI+education", increasing investment in education AI hardware and the development of educational big models, quickly seizing the software and hardware market of "AI+education", and industry leaders are expected to benefit deeply from the integrated development of "AI+education". The "three-dimensional resonance" of the education industry continues to be highly prosperous, with the Q1 2026 business climate trending upwards In recent years, the education industry has experienced a "three-dimensional resonance" of policy marginal improvement, industry supply clearance, and continued release of demand. With education policies under the background of building a strong education country showing a trend of marginal improvement, providing a relatively relaxed environment for industry development; the education industry has undergone policy-driven supply-side clearance, with industry leaders adopting a contraction strategy, leading to the closure and transformation of most small and medium-sized institutions, clearing industry supply; the release of demand driven by school selection, entrance into higher education, and an increase in average spending per student. At the same time, with the relaxation of the "two-child" policy and the arrival of the "dragon baby", China experienced a small peak in births from 2011 to 2017, and the middle and high school entrance exams are expected to usher in a "golden decade" of continuous growth. Four major variables support performance, the first-quarter performance is worth looking forward to The "four major variables" of new enrollment, renewal rate, average spending per student, and class scheduling and registration rate determine the profit space of education companies. The current market environment is favorable for listed education companies, with rapid growth in contract liabilities, a high ratio of order revenue, and the first-quarter performance is worth looking forward to. After-school training has a high degree of elasticity, leading to rapid growth in contract liabilities for Xueda (Xiamen) Education Technology Group and accelerated performance release for Shanghai Xinnanyang Only Education & Technology; steady development in international schools, Beijing Kaiwen Education Technology is expected to reach a turning point in trend business; the "public examination" industry is undergoing a major change, with Cendes Co., Ltd. becoming the new leader in the "public examination" sector, and the first-quarter performance is expected to accelerate release; management training is experiencing strong recovery, with Shanghai Action Education Technology's first-quarter performance worth looking forward to; good development in higher education, But'one Information Corporation, Xi'an, accelerating performance release. Risk warning: industry policy changes, increased industry competition, lower-than-expected enrollment, slow performance release, and other risks.