Goldman Sachs to raise target price for training institutions

Goldman Sachs believes the brands have entered competitive barriers, a study published yesterday by Goldman Sachs, which reported that the Chinese education concept stocks were undervalued, raising the prices of new Oriental, three-strong schools and schools. The report found that the increase in competition led to a sharp contraction in the overall education and training industry, but now the industry competition pattern has stabilized. Learning and thinking, new Oriental and learning are mostly in the implementation of focus on efficiency strategy, while the expansion of the business more disciplined, to enhance the utilization of learning centers. Their destructive scramble for market share has gone away and will focus on benign growth in the future. Learning and thinking and new Oriental respectively in mathematics and education and training to establish a leading position, while the major education to one-on-one personalized training is known for quality. As the competitive strength of China's education and training industry declines, we believe that the current development of the industry has created conditions for healthy, long-term profitability trends. The report notes that historically, China's education and training industry's valuations were generally low, and the 2014 price-to-earnings ratio was expected to be 10-13 times, well below the 18-25-fold forecast for essential consumer goods and high-end brand retailing. The historical average of the 12-month price-to-earnings ratio in New Oriental is 27 times times, suggesting there is still room for growth in its current valuation. We have raised the profit forecast interval of three companies by 1% to 7%, raising the target price range by 4% to 8% to reflect the growing rationality of China's education market competition pattern. Specifically, we will be learning to think of the target price from 14 U.S. dollars to 15 U.S. dollars, the new Oriental's target share price from 20.0 U.S. dollars to 21.5 U.S. dollars, the education of the target share price from 2.7 U.S. dollars to 2.8 U.S. dollars. Given its advantageous competitive position and huge room for growth, we maintain a "buy" rating of the learned stock. (Multi-Knowledge network Hou Jingtian)