Chinese Education Companies to Achieve Margin Expansion and Topline Growth: A Wall Street Transcript Interview with Ella Ji, Executive Director and Senior Analyst at Oppenheimer & Co. Inc.
67 WALL STREET, New York - September 6, 2013 - The Wall Street Transcript has just published its Education Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Gainful Employment Clarification - Enrollment and Retention Trends - Economic Recovery and Enrollment Trends - Growth Drivers in Chinese Education Sector
Companies include: New Oriental Education & Techn (EDU), China Distance Education Holdi (DL), ATA, Inc. (ATAI), ChinaEdu Corporation (CEDU) and many more.
In the following excerpt from the Education Report, an expert analyst discusses the outlook for the sector for investors:
TWST: We spoke about a year ago, and at that time you were very bullish on the education services sector in China. What is your sentiment today, and why?
Ms. Ji: Actually, if you listened to our advice one year ago, over the past year Chinese education companies all achieved very good results. EDU was trading at around $13, $14 last year this time; it's up over 60% in the past year. XRS was trading at around the $9 level, and it's now more than $12; it's up more than 40%. DL, China Distance Education, was around $3 one year ago; it more than tripled in the past year, and it's now over $10.
Some other education names such as Xedua Education (XUE), a company that we do not cover but we are quite familiar with, also delivered very strong results; they are more than 30% up in the past year. So I would say the entire sector had quite a great year.
Looking forward, we maintain our positive stance on the sector. Actually, fundamentally speaking we think in the next 12 months these companies may deliver a higher-quality growth than in the past 12 months. By higher quality I mean we expect them to achieve margin expansion along with topline growth. We expect the EPS for the sector will accelerate in the next 12 months compared to the past year. So we continue to be bullish on this sector.
TWST: What, if any, impact has the overall slowdown in China's economy had on these companies?
Ms. Ji: I would say, generally speaking, there is not much impact on the sector. Education companies are quite defensive companies, and usually we do not see the demand on the market being much affected by the macro slowdown in China. Actually, in the past year most companies were still able to achieve price increases that are more than CPI increases in China. Generally...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
