US Jim (002621) 18 Annual Report Review: US Jim’s early education leader is worth looking forward to

US Jim (002621) 18 Annual Report Review: US Jim’s early education leader is worth looking forward to
Brief performance evaluation On April 16, 2019, US Jim (formerly known as the third base stock) announced its annual report, which basically met the performance forecast, and achieved revenue in 20182.70,000 yuan, a year-on-year increase of 50%, net profit attributable to mother 0.30,000 yuan, a year-on-year increase of 72%, net profit attributable to mothers (deductions) is 0.200 million, + 11%.Excluding the fair incentive fee, the net profit attributed to the mother is zero.600 million, + 209% year-on-year. Business analysis Tianjin Meigem’s consolidated 杭州桑拿 consolidated statements since November 30, 2018, have contributed significantly to revenue and profit.The operating income of Megem’s 2018 consolidated statements is 0.30,000 yuan, accounting for 12% of total revenue, achieving a net profit of 0.200 million, accounting for 55% of total profit.Excluding the impact of Tianjin Meijie’s consolidation, the company’s original business FY18 revenue was 2.4 billion, a year-on-year increase of 31%, and a net interest rate of 4%, a continuous decline of 6 percentage points. By expanding the education industry, the education business can be significantly improved and the profit side can be significantly improved.Report baseline: ① Education business realized 1 billion operating income, accounting for 38% of total revenue, and profit was 0.500 million, accounting for 160% of total profits.Tianjin Megem’s preliminary 2018 revenue is 3.60,000 yuan, an increase of 67% year-on-year.900 million, + 124%, exceeding the 2018 annual performance commitments (Meijem’s 2018/2019/2020 performance commitments are not less than 1.80/2.38/2.900,000 yuan), Kaide Education achieved operating income of 0.70,000 yuan, a year-on-year increase of 20%, and a net profit of 0.300 million, + 26% YOY, exceeding the 2018 annual performance commitment (Kade Education Performance Commitment is no less than 26/32 million yuan in 2018/2019 net profit).② Manufacturing business realized revenue in 20181.600 million, accounting for 62% of total revenue, an increase of 37% year-on-year, and a profit of -0.2 trillion, accounting for -60% of the total profit. The revenue growth rate of the original manufacturing business is still high, but the profitability is poor and it is in the state of replacement.The company’s profitability has improved markedly since the acquisition of Kade’s education and education sector in 2017. In 2018, the company completed the acquisition of Midge, the business of the education sector was extended and strengthened, and its profitability was further optimized. Established in 1983, China has been in China since 2010, and it has spread to 30 countries and regions around the world. It is an internationally competitive early education brand.As of December 31, 2018, Tianjin Meijiem had a total of 434 “Mijim” brand early education centers across the country (94 in 2018 and 71 in 2017).In the future, the company will accelerate and steadily promote the joining of US Jim and the operation of direct store operations, and plan to expand overseas markets such as India, Russia, Hong Kong, Macao and Taiwan.Meijim’s competitiveness lies in: ① advanced teaching concepts and curriculum settings, brand influence and excellent management team and corporate culture; ② a complete franchise design system, standardized franchise model, and strong replicability and scalability. Investment suggestion: We estimate that the company’s net profit attributable to the parent will be 1 in 19-21.32/1.54/1.USD 9.3 billion, raised 19/20 profit forecast by 301% / 285%. The reason for the increase is that the original model did not reflect the impact of the 19-year US-James gradual consolidation. The corresponding PE is 59/51 / 40 times, maintain Buy rating, raise target price to 27.5 yuan. Risk reminders: the severity of rapid expansion management increases; manufacturing performance increases; the risk of goodwill impairment; financial costs may improve and other risks.