During the summer, most education public companies in the industry are expected to continue their growth as the industry remains prosperous.

The decision of the CPC Central Committee on advancing the modernization of China emphasizes the comprehensive reform of education. It accelerates the construction of a high-quality education system, promotes the reform of education methods, school models, management systems and guarantee mechanisms in a coordinated manner. It also accelerates the building of a vocational education system that integrates vocational and general education and integrates industry with education.

Swhy pointed out that the change in talent training methods under the background of vocational education reform has brought about demand growth. Vocational training institutions and private higher vocational education, as the main institutions for practical talent training, will enjoy the demand surge brought about by vocational education reform under the background of economic recovery. Minsheng Securities also pointed out that under the current environment, there is room for countercyclical growth in the sub-segment demand targeted by some vocational education leaders.

According to a research report by CITIC Securities, vocational education has continuously promoted industry development with encouraging policies since the promulgation of the new Vocational Education Law. The development prospects of vocational education with academic qualifications are promising. With the positive changes in the vocational education industry, some leading companies are expected to exhibit strong growth potential. It is recommended to focus on training institutions that have the ability to empower vocational education, and to focus on higher education companies that adhere to high-quality education and drive internal growth to maximize investment value.

The latest market research on education and training network points and recruitment needs:

New Oriental: 1,104 locations, a net increase of 41 locations per month, and a recovery to 66% of the peak;

TAL Education: 316 locations, a decrease of 35 locations per month, and a recovery to 29% of the peak;

XUEDA: 261 locations, flat monthly, and a recovery to 49% of the peak;

Gaotu: 94 locations, a net increase of 7 locations per month;

Beststudy Edu: 98 locations, and a recovery to 36% of the peak;

Scholar Edu: 108 locations, and a recovery to 71% of the peak;

Anglun: 133 locations in Shanghai

Education industry-related enterprises:

New Oriental-S (09901): As of the end of FY24Q4, the company has 1,025 schools and learning centers, an increase of 114 compared with the previous quarter (an increase of 68). Among them, there are 81 schools. In FY24Q4, overseas test preparation and study abroad consulting business increased by 17.7% and 17.3% respectively in USD terms; college entrance examination business increased by 16.4% year-on-year. In terms of new business, Q4 revenue increased by 50.3% year-on-year. Non-disciplinary tutoring business registered 0.875 million applications, a year-on-year increase of 39.1%. The number of active paying users of intelligent learning systems and equipment reached 0.188 million in Q1, a year-on-year increase of 89.9%.

Scholar Education (01769): It is expected that the revenue for the six months ending June 30, 2024 will be no less than RMB 0.38 billion, a year-on-year increase of no less than 51.2%; the attributable net profit of shareholders will be no less than RMB 80 million, a year-on-year increase of no less than 86.5%; except for share-based payment costs, the adjusted net profit is expected to be no less than RMB 90.9 million, a year-on-year increase of no less than 95.5%. This is mainly due to the increase in the total number of tutoring hours, which has led to increased revenue; and the efforts to improve operational efficiency, which has improved operational performance.

Beststudy Edu Group (03978): As a K-12 education leader deeply rooted in the South China region, the company has actively transformed to quality education after the implementation of 'double reduction' policies, and has achieved balanced development in quality education, high school and vocational education tutoring, and full-time examination preparation. The bank believes that its performance has greater elasticity under the marginal improvement of policies, and there is still significant room for Shenzhen and Foshan apart from Guangzhou. Beststudy focuses on cultivating core qualities such as literature and scientific literacy, and has developed 9 products, including 'Beststudy programming', 'interesting little reporters', 'thinking planet', 'tick-tock literature', 'literary aesthetics education', 'practice', 'bilingual culture', 'diverse thinking', 'social science literacy', etc. The above products are the first batch of quality products certified by the education authorities in Guangdong Province, providing important support for Beststudy's transformation.

China Education Group (00839): The company's schools are located in industrial clusters such as the Chengdu-Chongqing economic circle, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Hainan Free Trade Zone. They have a leading position in terms of scale and reputation in the local area, providing vocational education services to better serve local industries and economic development, and incubating application-oriented talents. Overseas, the company's higher education institutions in Sydney, Australia, and the university in London that can confer dual degrees from the United States and the United Kingdom provide students with substantial opportunities for internationalization of their academic qualifications and abilities.