Transferring Coverage of China New Higher Education; FVE Cut to HKD 5.30

We transfer coverage and take a fresh look at China New Higher Education, or CNHE, leading to a cut in our fair value estimate to HKD 5.30 from HKD 9.90 per share. We have reduced our growth and margin assumptions to reflect the change in business strategy. The shares are trading at about a 50% discount to our fair value estimate due to negative sentiment toward the education sector, which we think is not warranted. We project a dividend yield of 8.6% for 2022 at the current price level. This looks attractive to us.