Phoenix.com Hong Kong Stock News August 16 news, the education industry (listed company) capital and development summit forum hosted by Phoenix.com Finance and Phoenix.com Hong Kong Stock Exchange was held in Beijing today. This forum invites leading companies and guest representatives in the domestic education and training industry and education technology industry to share their thoughts on the future development of the education industry. Mr. Gu Ziqiao, director of Huasheng Securities, delivered a speech themed "Education Industry from the Perspective of Securities Investment".
Gu Ziqiao pointed out in his speech that when we analyze the industry, we will establish a set of analysis framework system, education industry It is no exception. The education industry is very important under the influence of policies. The education industry is a monopoly resource of the country, which reflects the political intentions of the rulers to a certain extent. We put policies and regulations first, followed by industry characteristics, and the third is investment. target.
Regarding policies and regulations, Mr. Gu Ziqiao said that the education industry is supervised by our policy regulators, whether it is support or opposition, or neutral opinions, and whether the education industry supports and supports our government. Approved.
Gu Ziqiao also said that what we are most concerned about is the future ceiling of the industry, how much the industry's load growth rate will be in the next five years, followed by the competition in the industry, whether it is oligopolistic competition or comparison undisciplined. In the business model, we will look at the feasibility, whether it is a supplement or a hard core relationship. We pay attention to whether the company is the leader of the subdivided industry, what is the background of the shareholders, whether the major shareholders have sufficient contacts and capital, and whether the team is excellent. If possible, we will also verify the company's data for the past few years. The data is a true reflection of your intentions, and it does not lie.
At the event, Gu Ziqiao also mentioned that when any industry is going up, we can break it down to see its growth, one is price and the other is volume. Let's see if there is room for growth in price. The blue line represents the education services in the CPI, the year-on-year growth rate of the month, and the red line is the overall CPI. After 2014, the blue line outperformed the overall CPI of the red line, which means that our education can be raised in price. From the data A level of verification can be done, and it cannot be ruled out that it is caused by the rise in housing prices.
Finally, Gu Ziqiao said that Huasheng Securities launched ESOP services for the three major pain points of customers. The first one is low cost, domestic friendly, and information updates are very timely.
The following is the transcript of Gu Ziqiao's speech:
I bring you the education industry in our eyes as an asset management industry, an investment industry, and an education industry. Before sharing, let me tell you a story related to education. The background of the story is the early years of the Republic of China. It is said that Zhang Taiyan has four daughters, and all the big girls have reached the age of marriage, but no matchmaker came to the door until one day he was by his side A very good friend told him the reason, and he suddenly realized, what is the reason? I believe that with the discernment of each guest, we can find out, because no one knows how to pronounce the names of these four girls, Taiyan immediately arranged a grand family dinner, invited the four daughters out, and told them how to pronounce the names one by one. These four words are very approved, and two words can only be found in the Kangxi dictionary. Thanks to the popularization work, the four girls were soon married off.
If we make a cover and put this story into today's education, it will bring us two points of thinking. We regard their future husbands as recipients of education. The content provided by the supplier must be appropriate and appropriate. It is not allowed to do it alone, to be self-appreciative, or to be especially high-grade. If we ordinary people cannot accept it, it is actually meaningless. In addition, as a demander of education, you must believe that knowledge can indeed change your destiny. It is very likely that your future husband and mother-in-law gave you exam questions in the past ten years. You can only study diligently to supplement the shortcomings of knowledge. .
First of all, when we do any industry analysis, we will establish an analysis framework system, and the education industry is no exception. The education industry is very affected by policies.Importantly, the education industry is a monopoly resource of the state, which reflects the political intentions of the rulers to a certain extent. I put policies and regulations first, followed by the characteristics of the industry, and the third is the investment target. In terms of policies and regulations, we look at an industry that will be very concerned about whether this industry is subject to our policy supervision layer, whether it supports or opposes it, or is it neutral. The education industry supports and approves of our government with both hands. Second, how strong is the support? The regulations and regulations promulgated in the past two years include both the Ministry of Education and related ministries and commissions, and the lineup is quite luxurious. The third is the implementation of supporting implementation policies. In the past two and a half years, new regulations and opinions will be promulgated every month or even half a month, which can be said to have a great impact on the market.
The second is the characteristics of the industry. What we are most concerned about is where the ceiling will be in the future, what is the growth rate of the industry's load in the next five years, and the second is the competition in the industry, which is oligopolistic competition. Still rather loose. In the business model, we will look at the feasibility, whether it is a supplement or a hard core relationship. We pay attention to whether the company is the leader of the subdivided industry, what is the background of the shareholders, whether the major shareholders have sufficient contacts and capital, and whether the team is excellent. If possible, we will also verify the company's data for the past few years. The data is a true reflection of your intentions, and it does not lie.
We might as well make a key review of the regulations we promulgated in the past two years. I only list the very important ones that have a significant impact on the capital market, and there are many more. In less than a month, there will be a new regulation and guidance, and there are many, many more in the process. In the process of sorting out, I found that there are two main lines. The first one is mainly the laws and regulations based on the "superior law", and the other is the guidance issued by the State Council for each education subdivision. Let's talk about the "superior law" first, now called the new people promotion law. It was officially promulgated in 2002. In 2012, the first amendment was proposed. At the end of 2016, it was submitted to the Standing Committee of the National People's Congress, and it was officially promulgated in September 2017. To promote the law, we are now waiting for the final draft of the implementing regulations. There are various versions, which have not been promulgated yet. It is expected to be promulgated in the second half of this year. Let us wait and see. The State Council also promulgated a series of supporting opinions during the period. The most important thing is to encourage social forces to set up private education promulgated on January 8, 2017. This time point is the starting point for the rise of Hong Kong stock exchanges. Three of the many regulations have a very significant impact on the capital market. How powerful are they?
I use this picture for a presentation, there are two curves in this picture, one is black, the black represents the education companies that have been listed in Hong Kong, we make it a collection, set a The education index of Hong Kong stocks, in contrast, is red, and has an important watershed. From the beginning of 2017 to June 2018, education stocks rose a lot, and education stocks continued to hit new highs. As soon as the 810 draft came out, it had a critical impact on education stocks in the capital market and fell directly. The second time was the new pre-school rules. The latest one happened last month. The State Council issued a guideline on compulsory education. There was a clause in it that we referred to as Citizens Tongzhi. The capital market fell again. Although all three fell, But the posture is different. If we analyze it with a positive and optimistic attitude, we see a better phenomenon, it falls less and less. First, we believe that the bad news of the entire education stock is being fully released, and most investors in the capital market are beginning to accept this kind of bad news. Second, we believe that the valuation of education stocks is sufficiently reasonable. The value of the situation has now dropped to more than ten times, and it has entered the investment range.
I will take the trouble to tell you about crude oil and what are the problems in the three legal provisions. The first one is the 810 Incident, the draft of the new civil promotion law. The first sentence reflects a message that our company has begun to carry out strategic integration. Suddenly, it is written down. In the future, this expansion behavior will be regulated by policies, and it will also be regulated by policies. There are quite a few restrictions. The second sentence is the characterization of the legal positioning of the subject, and the agreement control is usually considered by the capital market as a VIE (sound) structure. The founder is Sina Group. It is with this structure that we have seen batch after batch of The company is logged into the Hong Kong stock market. Having said that, why is protocol control chilling? Direct access to the capital market is not allowed in China. Now many education companies listed in the United States and Hong Kong adopt this structure. In this regulation, we can see that the regulators have doubts about such a structure. Will there be any legal status in the future? It did not affect the education company much, and the market ushered in a slump with many uncertainties. The second one was on December 15th last year, the preschool education and kindergarten's guidance, conveyed two important opinions, it was finally listed in the past, and it can be very hilariousWhen buying private and non-private kindergartens, I tell you that you can't be so foolish, and you should look at my face when you buy it.
The second expression makes the market have a new interpretation, and the capital market begins to have such an interpretation. He believes that the VIE structure is a convenient interest entity, not an agreement control. This kind of speculation is confirmed, and the benefit is that the protocol control restricted in the 810 incident is not for VIE construction, and the VIE structure is liberated. Whether such an interpretation is true, we must wait for the final review draft to land. The last one is that if the number of applicants exceeds the number of applicants, random admissions by computer will be implemented. The market is worried about whether private education companies will have relatively large restrictions on their independent enrollment rights. Independent enrollment is the core manifestation of private companies. From this clause, the market interpretation of the number of applicants exceeding the enrollment plan is aimed at the school district housing. In the past, the enrollment in each school district was based on the ranking of this place. The number of people exceeded the planned number of recruits, and everyone held a lottery, which made the capital market very doubtful about private education and the next step of autonomy, ushering in the third decline in the market.
Let’s take a look at the macro level of education. This data shows that the education market will be more than 5 trillion in 2025, and 2.6 trillion in 2018 will be the starting point for the data. In the case of doubling, the annualized growth rate is about 10%. The relevant data interpretation of this picture can be found in many reports and news. Most interpretations are still positive. Here I might as well provide you with two perspectives. Is the ratio of the first 4% high or not? Low, because there is no harm if there is no comparison. The first is the OECD. The average proportion in such an organization is 4.8%. The proportion of European and American countries is at least 6%. You can easily make a judgment. Our 4% is still On the low side, although the absolute value has increased, it has hovered around 4% for too long. This figure was only achieved in 2012. As early as 1993, when the State Council was making relevant education development plans, we should have achieved this ratio at the end of the last century and in 2000. The real time is 2012, which is exactly 12 years behind the target. Financial investment in education is far from enough, and this gap can only be filled by private education.
We say that when any industry is going up, we can break it down to see its growth, one is price and the other is quantity. Let's see if there is room for growth in price. The blue line represents the education services in the CPI, the year-on-year growth rate of the month, and the red line is the overall CPI. After 2014, the blue line outperformed the overall CPI of the red line, which means that our education can be raised in price. From the data A level of verification can be done, and it cannot be ruled out that it is caused by the rise in housing prices.
This picture is made by ourselves. We can see two important dimensions and logic. The first is the policy direction and the second is the capitalization path. We divide the entire education industry into Four quadrants, according to each subdivision, we make a classification, looking from the upper right to the lower left, in such a structure, we pay more attention to private higher education, K12 education, currently K9 compulsory education, and the second is preschool education. , Early childhood education.
Let’s introduce the logic of the education sub-sectors we are optimistic about. What is the investment logic of the first private high school? There are about three pieces. The base of the school will increase in 2020. In 2020, the gross enrollment rate will increase from 88% to more than 90%. The second is the penetration rate. The penetration rate in high school education is not high enough, about 24%, and there is still a lot of room for improvement. The third logic is to interpret it from the perspective of policy. I just talked about a lot of negative things about policies. In fact, high school education has not seen policy restrictions and suppression. The reverse seems to be a disguised benefit. For higher education, some of its investment core logic overlaps, including the increase in the population of the right age. The gross enrollment rate of higher education is very low, ranging from 45-48%, compared with 60% in Europe and the United States. This gap is relatively large, and we need to catch up for a long time.
From the current data, it will reach 27% in 2020. The third one is what I want to emphasize. I just mentioned that this industry is subject to policy restrictions, but it is very rare that higher education is fully encouraged and supported by policies. This policy is encouraged and supported. The training and education of K12, the relevant regulatory documents from the beginning of the year to the end of the year, why do we start to be optimistic at this time? The core logic has three points. After the strong supervision in 2018, it is conducive to the gradual improvement of the concentration of the entire leader. Second, we believe that although the State Council is restricting K9 education and extracurricular education, the demand is realYes, this demand may be suppressed, but it cannot be eliminated. It cannot be ruled out that a new form will appear soon to make up for this education. The last one is shared by many companies. In the future, we will inject elements of technology into education to bring more audiences.
This is a listed company in Hong Kong and U.S. stocks. It corresponds to the investment quadrant just mentioned, and you can quickly find the investment targets you are interested in.
Our core point of view, the first is that we are evasive about the kindergarten and K9 education stages, because the policy is not clear. We are relatively optimistic about higher education, and we are just beginning to be optimistic about K12 education, so we can slowly start paying attention. All investment proposals have an assumption. A very important factor is that the final draft of the implementation regulations of the new civil promotion law has not been issued, and we will pay attention to it after it is issued. I would like to emphasize that when we were sorting out the investment context of the past two years, our policy regulators were promoting the equalization of education, popularizing fairness and universality, including everyone gathering here to talk about education topics, I believe we The goal of the company has this point. We hope to gather more and better high-quality resources and provide them to more audiences.
A brief introduction to Huasheng Securities. First, summarize Huasheng Securities in one sentence. What is Huasheng Securities? Huasheng Securities is a professional investment platform for Hong Kong and U.S. stocks under Sina. We have the gold master father "Sina", and our strength is not covered. Second, we are a professional investment platform for Hong Kong and U.S. stocks. The word "professional" is very important. For more platforms, we are professional. Professionalism is reflected not only on the C-side, but also on the B-side. Why are we professional on the C-side? We have licenses No. 1, 2, 4, and 9 issued by the Hong Kong Securities Regulatory Commission. No. 1 license means that we can carry out overseas trading business, No. 2 license is for futures business, No. 4 license is for securities consulting cultural relics, and No. 9 license is for capital To manage the business, we are now setting up a hotel investment fund with China Hotel, which is very sought after by investors. In the C-end, our commissions are very low. Our commissions are only about 3/10,000. You only need to download the APP, and you can log in in less than 3 minutes to start your overseas investment journey.
We have four major services for enterprises. The first one is that we have Weibo information resources, and Huasheng Securities itself has three positive views. The second is the No. 4 license, which issues analysis reports to the outside world. and give a rating. Similarly, we can invest as a mechanism, and we can also do IPO underwriting. The last point to focus on is ESOP service, which is called a systematic solution for corporate employee options. Why do we talk about such a service? Many listed companies will ask employees to provide stock incentive plans. We found that many companies are still in the maintenance stage, and many companies have begun to apply IT solutions. The system of friends has three major pain points. The first is that it is not friendly enough to use, and the second One is that the data informatization is not timely enough, and the third is that the cost is very expensive. We Huasheng Securities launched our ESOP service for the three major pain points of customers. The first one is low cost, domestic friendly, and information update is very timely.
In order to express the sincerity of Huasheng Securities to participate in this meeting, we have prepared a small gift for each participant. The shareholder card can be opened to enjoy two rights, the first is that Hong Kong stocks are free of commission 180 Yes, the second one is to give away 2 shares of the Hong Kong Stock Exchange. Everyone can communicate fully in the group, and we, Huasheng Securities, have set up a booth outside. If there is any business cooperation, we are very welcome. Thank you very much for listening.