China Education Group Earnings: Decent Enrollment Growth; On Track to Meet Full-Year Target

China Education Group delivered a decent fiscal first half (ended February) with revenue up 18% and adjusted net income up 15.1% year on year, hitting 49% and 53% of management’s full-year guidance, respectively. Student enrollment increased 10% to about 340,700. We are keeping our fiscal 2023 earnings estimate at CNY 2 billion, and our fair value estimate remains HKD 13.20 per share. The shares closed at a 47% discount to our fair value estimate on April 28. We think a successful for-profit classification would serve as a positive catalyst.