Goldman maintains the technology to buy 20 dollars in target

Beijing time June 26 Evening News, Goldman Sachs today issued an investment report to maintain the the technology stock (nasdaq:tedu) "buy" rating, while maintaining the 20 dollar target share price unchanged.

The following is a summary of the contents of the report:

The State Council recently issued the "decision on speeding up the development of modern vocational education", fully deployed to accelerate the development of modern vocational education. The decision clarified the guiding ideology, basic principles, objective tasks and policy measures of speeding up the development of modern vocational education in the coming period, and put forward that "by 2020, the formation of adaptation to development needs, deep integration of production and education, communication between vocational education and general education, embodying lifelong educational concept, with Chinese characteristics, The modern vocational education system of the world level ". By 2020, the secondary vocational school students reached 23.5 million, the professional level of vocational education to 14.8 million people, the undergraduate level of vocational education to reach a certain scale. The continuing education of the employees reached 350 million.

Analysis：

The competition in the new job market of Chinese university graduates is very fierce. The Chinese education and Research computer network (CERNET) predicts that the number of Chinese undergraduates graduating this summer will reach 7 million, compared with 2006 at 4 million and 2001 at 1 million. According to a survey released recently by the Shanghai Bureau of Statistics, 50% of local graduates have yet to find jobs as of May.

These data indicate that demand for vocational training services is growing. The trend also introduces the technology revenues that have grown 3 times-fold in the past three years. The goal of the decision also echoes the recent development of the technology. Earlier this month, the technology and China's 6 colleges and universities agreed to build a professional cooperation agreement. We expect the the technology will continue to grow at a high rate over the next few years with the increase in user penetration and the expansion of service categories.

We expect the the technology in fiscal 2014 and fiscal 2015 to grow by 48% and 40% respectively, while net profit will grow by 88% and 68% per cent year-on-year.

Valuation: We maintain the the technology stock "buy" rating, while maintaining a 20 dollar target share price unchanged. (Li Ming)