HKUST News Flying (002230): Epidemic Prevention and Control Accelerates Changes in Education Order Business Model Positive Impact Will Exceed Expectations

HKUST News Flying (002230): Epidemic Prevention and Control Accelerates Changes in Education Order Business Model Positive Impact Will Exceed Expectations
Investment Highlights: Maintain overweight.With reference to the performance report, we lower our forecast for 2019-2021 to 8.22/12.80/18.6.2 合肥夜网 billion yuan (formerly 8.93/13.67/22.3.7 billion, down 8% / 6% / 17%) and EPS down to 0.37/0.58/0.85 yuan (previously 0.41/0.62/1.02 yuan), considering the company’s competitive advantage and scarcity in the AI field, raise the target price to 48.77 yuan (was 40.46 yuan, an increase of 21%), to maintain overweight.  Epidemic prevention and control will accelerate changes in the business model of the company’s education orders.Air Force Corporation’s wisdom lessons / scientific studies / smart schools and other projects that directly involve teaching or school management mainly use the point-to-point model to directly contract with schools.  As the financial pressure on the epidemic further increased, the proportion of projects led by the Education Bureau to purchase and then hand over to schools increased.At the end of 2019, the company successively won the bids for Qingdao and Bengbu education orders, all adopting the latter model, or the beginning of the transformation of the education order signing model.  The impact of the change in the signing mode is one: it helps the company to improve personnel use efficiency from two dimensions.1) The education bureau’s regional procurement is transformed from point-to-point signing orders with schools. The company mainly provides services by combining standardized modules to drive productization rates.2) Transformed from contracting each business to packaging multiple businesses to form an overall solution, which will drive marketing efficiency (from independent marketing of each business to unified marketing and reduce communication costs) and development efficiencyExpansion, on this basis is divided into different modules) promotion.  Changes in the signing mode affect the second: rapid education market control speed.The change in the contract model will help the company to achieve a fast control of the B-end education market, thereby building data barriers in multiple windows where its own technical barriers point to the collapse of the IT giant, and at the same time driving the C-end education business to achieve alternative development and achieveTwo advances of business model (project-oriented operation) and business connotation (education informationization to AI).  Risk 佛山桑拿网 reminder: the duration of the epidemic is too long, causing financial pressure, and some employees are infected with new coronary pneumonia