Keep a good future stock rating unchanged

J.P. Morgan released its research report today, keeping the stock rating of a good Future (NYSE:XRS) unchanged at "overweight" (overweight), with a target price of 32 dollars.

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

2014 fiscal year quarter and full year sales increase, EBIT profit margin growth exceeding expectations

-A good future operates one of the largest learning center networks in the Chinese market, providing comprehensive education and guidance services for the core subjects of primary and secondary schools.

-Good future strong revenue growth, mainly due to higher registered population growth. In the quarter of 2014, the number of registered students in the good future grew by 38.8%, the average price rose 5.1%. The 2014 Chinese Lunar New Year arrival time is earlier than 2013, providing a good factor for the future fourth-quarter results.

-A good future for the second consecutive quarter to obtain operating leverage. With the rapid growth of student enrolment and corresponding revenue growth, there is no need to increase sales, general services and administrative expenses for the same purpose in the future. The profit margin of EBIT (pre-tax profit) in the quarter was 17%, nearly one-fold compared with 9% in the same period last year. Annual EBIT profit margin rose 4.4% to 18.3%.

-Regional expansion and mergers and acquisitions. Using strong brands in the markets of Beijing and Shanghai, the future is speeding up its business expansion to new cities. A good future is using new online programs to improve branding and enrich students ' overall learning experience. Good future. The new investment in baby trees on January 14 is one example of its expansion into new markets (online services for infant parents and pre-school children), with the aim of providing more students for core, small and medium-scale counselling services.

-The main themes of the Analyst conference call (Eastern Time April 22 8 o'clock) include the new regional expansion plan, the future growth will be based mainly on the growth of registered students, the provision of innovative Internet services in Beijing and the eventual expansion of the country, and the continued use of a comprehensive incentive system to develop talent This is the most valuable asset for the future, and the use of new software control systems to improve the logistics sector.

-Good for the next 2014 fiscal year quarter net profit investor 144%, higher than we expect 6%. The EBIT profit margin of 17% per cent in the quarter was nearly one-fold compared with 9% last year. Good future EBIT profit margins rose for the first time in the third quarter of fiscal year 2014, when the margin increased from 10% to 16.2% in the third quarter of fiscal year 2013. We believe that the market may have thought that the EBIT profit margin for the good future will not continue to improve, but the fact is that the profit margin has increased in the quarter of 2014, which should help to ease the concerns and increase long-term expectations that future profit margins will continue to rise in the future.