SEHK:1769

Stock Analysis Report

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Executive Summary

Scholar Education Group provides K-12 after-school education services in the People’s Republic of China. More Details


Snowflake Analysis

Exceptional growth potential with excellent balance sheet.

Share Price & News

How has Scholar Education Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1769 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: 1769's weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

-4.3%

1769

0.8%

HK Consumer Services

-0.5%

HK Market


1 Year Return

68.2%

1769

29.8%

HK Consumer Services

7.6%

HK Market

Return vs Industry: 1769 exceeded the Hong Kong Consumer Services industry which returned 29.8% over the past year.

Return vs Market: 1769 exceeded the Hong Kong Market which returned 7.6% over the past year.


Shareholder returns

1769IndustryMarket
7 Day-4.3%0.8%-0.5%
30 Day-18.3%8.5%5.3%
90 Day-31.3%-7.8%4.2%
1 Year70.0%68.2%32.3%29.8%11.9%7.6%
3 Yearn/a-0.9%-7.0%-1.2%-11.4%
5 Yearn/a11.6%2.3%29.7%7.9%

Long-Term Price Volatility Vs. Market

How volatile is Scholar Education Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Scholar Education Group undervalued compared to its fair value and its price relative to the market?

48.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1769 (HK$16.18) is trading below our estimate of fair value (HK$31.64)

Significantly Below Fair Value: 1769 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1769 is poor value based on its PE Ratio (71x) compared to the HK Consumer Services industry average (17.7x).

PE vs Market: 1769 is poor value based on its PE Ratio (71x) compared to the Hong Kong market (11.2x).


Price to Earnings Growth Ratio

PEG Ratio: 1769 is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: 1769 is overvalued based on its PB Ratio (13.8x) compared to the HK Consumer Services industry average (2.1x).


Next Steps

Future Growth

How is Scholar Education Group forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

39.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1769's forecast earnings growth (39.7% per year) is above the savings rate (1.6%).

Earnings vs Market: 1769's earnings (39.7% per year) are forecast to grow faster than the Hong Kong market (21.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1769's revenue (29.2% per year) is forecast to grow faster than the Hong Kong market (13.7% per year).

High Growth Revenue: 1769's revenue (29.2% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1769's Return on Equity is forecast to be very high in 3 years time (43.1%).


Next Steps

Past Performance

How has Scholar Education Group performed over the past 5 years?

34.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1769 has a large one-off gain of CN¥57.5M impacting its June 30 2020 financial results.

Growing Profit Margin: 1769's current net profit margins (14.5%) are higher than last year (12.5%).


Past Earnings Growth Analysis

Earnings Trend: 1769's earnings have grown significantly by 34.1% per year over the past 5 years.

Accelerating Growth: 1769's earnings growth over the past year (56%) exceeds its 5-year average (34.1% per year).

Earnings vs Industry: 1769 earnings growth over the past year (56%) exceeded the Consumer Services industry 6.7%.


Return on Equity

High ROE: 1769's Return on Equity (19.5%) is considered low.


Next Steps

Financial Health

How is Scholar Education Group's financial position?


Financial Position Analysis

Short Term Liabilities: 1769's short term assets (CN¥596.5M) exceed its short term liabilities (CN¥414.6M).

Long Term Liabilities: 1769's short term assets (CN¥596.5M) exceed its long term liabilities (CN¥422.4M).


Debt to Equity History and Analysis

Debt Level: 1769's debt to equity ratio (22%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if 1769's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 1769's debt is well covered by operating cash flow (148.4%).

Interest Coverage: 1769's interest payments on its debt are well covered by EBIT (3.6x coverage).


Balance Sheet


Next Steps

Dividend

What is Scholar Education Group current dividend yield, its reliability and sustainability?

0.74%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 1769's dividend (0.74%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.23%).

High Dividend: 1769's dividend (0.74%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.58%).


Stability and Growth of Payments

Stable Dividend: 1769 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 1769 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 1769 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 1769's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

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

1.9yrs

Average management tenure


CEO

Mingzhi Qi (35 yo)

1.92yrs

Tenure

CN¥421,000

Compensation

Mr. Qi Mingzhi has been Director of Scholar Education Group since 16 April 2018 and Chief Executive Officer since 8 December 2018. He was re-designated as an executive Director of Scholar Education Group ...


CEO Compensation Analysis

Compensation vs Market: Mingzhi's total compensation ($USD64.03K) is below average for companies of similar size in the Hong Kong market ($USD476.54K).

Compensation vs Earnings: Mingzhi's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Qiyuan Chen
Chairman2.58yrsCN¥370.00k38.52%
CN¥ 3.4b
Mingzhi Qi
CEO & Director1.92yrsCN¥421.00kno data
Hongyu Chen
Executive Director2.58yrsCN¥363.00kno data
Chaoqiang Xu
Executive Director8.58yrsCN¥432.00kno data
Wai Hang So
CFO & Company Secretary1.83yrsno datano data
Ribao Hua
Financial Controller3.83yrsno datano data

1.9yrs

Average Tenure

38.5yo

Average Age

Experienced Management: 1769's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Qiyuan Chen
Chairman2.58yrsCN¥370.00k38.52%
CN¥ 3.4b
Mingzhi Qi
CEO & Director1.92yrsCN¥421.00kno data
Hongyu Chen
Executive Director2.58yrsCN¥363.00kno data
Chaoqiang Xu
Executive Director8.58yrsCN¥432.00kno data
Victor Huang
Independent non-executive Director1.42yrsCN¥98.00kno data
Jianhua Liu
Independent non-executive Director1.42yrsCN¥60.00kno data
Jing Wu Shen
Vice Chairman2.58yrsno datano data
Xuezhi Yang
Independent non-executive Director1.42yrsCN¥67.00kno data

2.6yrs

Average Tenure

40.5yo

Average Age

Experienced Board: 1769's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


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.


Ownership Breakdown

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


Top Shareholders

Company Information

Scholar Education Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Scholar Education Group
  • Ticker: 1769
  • Exchange: SEHK
  • Founded: 2012
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: HK$8.913b
  • Shares outstanding: 555.70m
  • Website: https://www.skledu.com

Number of Employees


Location

  • Scholar Education Group
  • Building A
  • Room 2601
  • Shenzhen
  • Guangdong Province
  • 518049
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1769SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2019
SCED.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2019

Biography

Scholar Education Group provides K-12 after-school education services in the People’s Republic of China. The company offers a suite of after-school education services through its academic preparation progr...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/26 10:11
End of Day Share Price2020/11/26 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.