China Education Group Holdings Ltd
00839: XHKG (HKG)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
HK$11.80 | Mxxggc | Zrgjvcyj |
China Education Group Falls on Market Sentiments; Shares Attractive
We transfer coverage and take a fresh look at China Education Group, or CEG, leading to a cut in our fair value estimate to HKD 13.20 from HKD 22 per share. The cut is mainly attributable to lower earnings growth assumptions for our 10-year stage II period. Our near-term earnings estimates are largely unchanged. We keep our narrow moat and stable moat trend rating. The shares are trading at about a 50% discount to our fair value estimate due to negative sentiment toward the education sector given policy concerns, which we think is not fully warranted for CEG.