China New Higher Education Group (DB:8CN) - Share price, News & Analysis

Q: What is the Fair Price of 8CN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

8CN (€0.31) is trading below our estimate of [[fair value]] (€2.02)

8CN fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	3/6
Past Performance	5/6
Financial Health	2/6
Dividends	3/6

8CN Stock Overview

China New Higher Education Group Limited, an investment holding company, provides education services in the People's Republic of China.

Rewards

Trading at 84.6% below our estimate of its fair value

Earnings are forecast to grow 15.57% per year

Earnings grew by 49.5% over the past year

Risk Analysis

Has a high level of debt

Dividend of 9.23% is not well covered by earnings

Volatile share price over the past 3 months

China New Higher Education Group Competitors

ZEAL Network

XTRA:TIMA

€791.7m

China Kepei Education Group

SEHK:1890

HK$4.2b

LITALICO

TSE:7366

JP¥71.5b

Hope Education Group

SEHK:1765

HK$5.2b

Price History & Performance

Summary of all time highs, changes and price drops for China New Higher Education Group
Historical stock prices
Current Share Price	HK$0.31
52 Week High	HK$0.54
52 Week Low	HK$0.20
Beta	1.42
1 Month Change	11.43%
3 Month Change	8.33%
1 Year Change	-42.22%
3 Year Change	-3.11%
5 Year Change	n/a
Change since IPO	-40.23%

Shareholder Returns

	8CN	DE Consumer Services	DE Market
7D	2.6%	8.9%	-2.5%
1Y	-42.2%	-19.6%	-23.9%

Return vs Industry: 8CN underperformed the German Consumer Services industry which returned -19.6% over the past year.

Return vs Market: 8CN underperformed the German Market which returned -23.9% over the past year.

Price Volatility

Is 8CN's price volatile compared to industry and market?
8CN volatility
8CN Average Weekly Movement	8.3%
Consumer Services Industry Average Movement	5.7%
Market Average Movement	5.6%
10% most volatile stocks in DE Market	9.8%
10% least volatile stocks in DE Market	2.8%

Stable Share Price: 8CN is more volatile than 75% of German stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: 8CN's weekly volatility (8%) has been stable over the past year, but is still higher than 75% of German stocks.

About the Company

Founded	Employees	CEO	Website
1999	9,437	Shuai Zhao	https://www.xingaojiao.com

China New Higher Education Group Limited, an investment holding company, provides education services in the People's Republic of China. The company operates education institutions under Yunnan Technology and Business University, Science and Technology College of Hubei Minzu University, Harbin Huade University, Lanzhou University of Technology College of Technology and Engineering, Guizhou Vocational College of Industry and Commerce, Luoyang Vocation College of Science and Technology, and Talent International College Guangxi names. It also offers technical and management consultancy services.

China New Higher Education Group Fundamentals Summary

How do China New Higher Education Group's earnings and revenue compare to its market cap?
8CN fundamental statistics
Market Cap	CN¥3.59b
Earnings (TTM)	CN¥618.62m
Revenue (TTM)	CN¥1.75b

5.8x

P/E Ratio

2.1x

P/S Ratio

Is 8CN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
8CN income statement (TTM)
Revenue	CN¥1.75b
Cost of Revenue	CN¥1.02b
Gross Profit	CN¥726.95m
Other Expenses	CN¥108.33m
Earnings	CN¥618.62m

Last Reported Earnings

Feb 28, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.40
Gross Margin	41.61%
Net Profit Margin	35.41%
Debt/Equity Ratio	81.4%

How did 8CN perform over the long term?

See historical performance and comparison

Dividends

9.2%

Current Dividend Yield

48%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 8CN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 8CN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 8CN. This is calculated by dividing 8CN's market cap by their current preferred multiple.
What is 8CN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥3.59b

8CN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.2x
Enterprise Value/EBITDA	7.2x
PEG Ratio	0.4x

Price to Earnings Ratio vs Peers

How does 8CN's PE Ratio compare to its peers?

8CN PE Ratio vs Peers

The above table shows the PE ratio for 8CN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	35.6x
TIMA ZEAL Network	59.5x	20.4%	€791.7m
1890 China Kepei Education Group	8.7x	22.6%	HK$4.2b
7366 LITALICO	66.3x	22.0%	JP¥71.5b
1765 Hope Education Group	8x	17.2%	HK$5.2b
8CN China New Higher Education Group	5.8x	15.6%	€4.2b

Forward PE

Price-To-Earnings vs Peers: 8CN is good value based on its Price-To-Earnings Ratio (5.8x) compared to the peer average (35.6x).

Price to Earnings Ratio vs Industry

How does 8CN's PE Ratio compare vs other companies in the Global Consumer Services Industry?

Price-To-Earnings vs Industry: 8CN is good value based on its Price-To-Earnings Ratio (5.8x) compared to the European Consumer Services industry average (19.5x)

Price to Earnings Ratio vs Fair Ratio

What is 8CN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

8CN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.8x
Fair PE Ratio	28.2x

Price-To-Earnings vs Fair Ratio: 8CN is good value based on its Price-To-Earnings Ratio (5.8x) compared to the estimated Fair Price-To-Earnings Ratio (28.2x).

Share Price vs Fair Value

What is the Fair Price of 8CN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 8CN (€0.31) is trading below our estimate of fair value (€2.02)

Significantly Below Fair Value: 8CN is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 8CN is good value based on its PEG Ratio (0.4x)

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Future Growth

How is China New Higher Education Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 8CN's forecast earnings growth (15.6% per year) is above the savings rate (-0.01%).

Earnings vs Market: 8CN's earnings (15.6% per year) are forecast to grow faster than the German market (8.4% per year).

High Growth Earnings: 8CN's earnings are forecast to grow, but not significantly.

Revenue vs Market: 8CN's revenue (11.3% per year) is forecast to grow faster than the German market (4.7% per year).

High Growth Revenue: 8CN's revenue (11.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 8CN's Return on Equity is forecast to be low in 3 years time (19.5%).

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Past Performance

How has China New Higher Education Group performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

27.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 8CN has high quality earnings.

Growing Profit Margin: 8CN's current net profit margins (35.4%) are higher than last year (32.1%).

Past Earnings Growth Analysis

Earnings Trend: 8CN's earnings have grown significantly by 27.9% per year over the past 5 years.

Accelerating Growth: 8CN's earnings growth over the past year (49.5%) exceeds its 5-year average (27.9% per year).

Earnings vs Industry: 8CN earnings growth over the past year (49.5%) exceeded the Consumer Services industry 21.6%.

Return on Equity

High ROE: 8CN's Return on Equity (20%) is considered low.

Discover strong past performing companies

Financial Health

How is China New Higher Education Group's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 8CN's short term assets (CN¥1.2B) do not cover its short term liabilities (CN¥2.6B).

Long Term Liabilities: 8CN's short term assets (CN¥1.2B) do not cover its long term liabilities (CN¥2.4B).

Debt to Equity History and Analysis

Debt Level: 8CN's net debt to equity ratio (60%) is considered high.

Reducing Debt: 8CN's debt to equity ratio has increased from 37.5% to 81.4% over the past 5 years.

Debt Coverage: 8CN's debt is well covered by operating cash flow (31.8%).

Interest Coverage: 8CN's interest payments on its debt are well covered by EBIT (5.5x coverage).

Balance Sheet

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Dividend

What is China New Higher Education Group current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

9.23%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 8CN's dividend (9.23%) is higher than the bottom 25% of dividend payers in the German market (1.49%).

High Dividend: 8CN's dividend (9.23%) is in the top 25% of dividend payers in the German market (4.52%)

Stability and Growth of Payments

Stable Dividend: 8CN has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 8CN's dividend payments have increased, but the company has only paid a dividend for 5 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (48.3%), 8CN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (90.7%), 8CN's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure

CEO

Shuai Zhao (41 yo)

5.92yrs

Tenure

CN¥1,375,000

Compensation

Mr. Shuai Zhao serves as the Chief Executive Officer of China New Higher Education Group Limited and has been its Executive Director since August 19, 2016. Mr. Zhao is Co-Owner of Aspire Education Worldwid...

CEO Compensation Analysis

Compensation vs Market: Shuai's total compensation ($USD205.19K) is below average for companies of similar size in the German market ($USD1.19M).

Compensation vs Earnings: Shuai's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: 8CN's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: 8CN's board of directors are considered experienced (4.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/02/28
Annual Earnings	2021/08/31