Edvantage Earnings: Decent Enrolment Growth; Stable Gross Margin; Return to Cash Dividend a Positive

Edvantage delivered a decent fiscal first half (ending February 2023) with revenue and net income up 18.3% and 18.9% year on year, respectively. Student enrollment increased 12.2% to 85,603, exceeding its 83,000 target. We increase our fiscal 2023 earnings estimate slightly to CNY 652 million from CNY 627 million, but our fair value estimate remains HKD 6.10. The shares are attractive, and we think investors may warm to the return to a cash dividend following a script dividend last November that disappointed the market. Edvantage is trading on a projected 7% dividend yield.