- April 22, 2021
1HFY21 results in-line, growth on track as capital has been deployed efficiently. We believe M&A and organic growth will remain as the company’s twin engine for growth in student enrolments. At 18.6x FY21E P/E, we see value in the stock as it is on track to deliver a 43% YoY FY21E net profit growth, in our view. Maintain Buy.
Key Highlights:
- We believe Edvantage is on track to achieve our FY21E core net profit growth of 43% YoY with 48% of our full year estimate already achieved during 1HFY21.
- As the newly acquired Sichuan Urban Vocational and Technician colleges only contributed to two months’ of the 1HFY21 financials, we expect the 2HFY21 should achieve a solid HoH growth in revenues and net profit driving the full year results to beat our expectations, in our view.
- Following the acquisition of Urban Vocational College and Urban Technician College, the company’s no. of students enrolled has grown 77% YoY to 62,404 students by end-Feb 2021.
- Considering the earnings growth potential, we see value in the stock that is trading at a 18.6x FY21E P/E.
