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Equity Bottom-Up

China Kepei Education Group / Equity Bottom-Up

<ul>
 <li>
<a href="https://smartkarma.com/entities/china-kepei-education-group">Kepei Education</a> is a significant operator in China's private higher vocational education sector, a segment supported by favorable government policies aimed at cultivating a skilled workforce for economic transformation.</li>
 <li>The company exhibits an attractive valuation profile, trading at a discount to several peers on key metrics like P/E and P/B, and offers a high dividend yield. However, recent financial performance shows signs of margin pressure and declining profitability.</li>
 <li>Key risks for investors are centered on the highly regulated nature of China's education industry, intense competition for student enrollment, and the company's operational concentration on a few key campuses.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
Kepei Education is a significant operator in China's private higher vocational education sector, a segment supported by favorable government policies aimed at cultivating a skilled workforce for economic transformation.
  The company exhibits an attractive valuation profile, trading at a discount to several peers on key metrics like P/E and P/B, and offers a high dividend yield. However, recent financial performance shows signs of margin pressure and declining profitability.
  Key risks for investors are centered on the highly regulated nature of China's education industry, intense competition for student enrollment, and the company's operational concentration on a few key campuses.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Kepei Education (1890 HK) - Apr 2026

HK/China Equity Long-Short

Osbert Tang, CFA

China New Higher Education / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-new-university" target="_blank" data-smartkarma-citation="entities:23626:1" rel="noopener">China New Higher Education (2001 HK)</a>'s gearing (including contract liabilities) has come down to 61.2% in 1H25, from 69.9% in FY24 and 84.1% in FY23 - an encouraging trend. </li>
<li>Net profit grew 8.6%, even faster than the full-year consensus forecast of 3.5% growth. There are multiple drivers that support its medium-term outlook.</li>
<li>CNHE trades on 1.7x PER and 0.3x P/B, but the FY25 ROE is a solid 16.6%. Should the payout ratio remain unchanged, its yield will reach 28.4%.</li>
</ul>



China New Higher Education (2001 HK)'s gearing (including contract liabilities) has come down to 61.2% in 1H25, from 69.9% in FY24 and 84.1% in FY23 - an encouraging trend. 
Net profit grew 8.6%, even faster than the full-year consensus forecast of 3.5% growth. There are multiple drivers that support its medium-term outlook.
CNHE trades on 1.7x PER and 0.3x P/B, but the FY25 ROE is a solid 16.6%. Should the payout ratio remain unchanged, its yield will reach 28.4%.


China New Higher Education (2001 HK): Stays Cheap at 1.7x PER and 0.3x P/B

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong Dollar continues to trade at the strong end of its band  resulting in upward pressure on HIBOR in turn causing a further unwind of the HKD carry trade.</li>
<li>HSI shows the strongest market breadth in 15 years as nearly all members trade above 200 DMA.</li>
<li>
<a href="https://www.smartkarma.com/entities/xtep-international-holdings" target="_blank" data-smartkarma-citation="entities:18118:1" rel="noopener">Xtep International (1368 HK)</a> , <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> and <a href="https://www.smartkarma.com/entities/china-education-group-holdin" target="_blank" data-smartkarma-citation="entities:18218:1" rel="noopener">China Education Group (839 HK)</a> all had breakouts to form uptrends.  All are part of the consumption sector in China
</li>
</ul>


Hong Kong Dollar continues to trade at the strong end of its band  resulting in upward pressure on HIBOR in turn causing a further unwind of the HKD carry trade.
HSI shows the strongest market breadth in 15 years as nearly all members trade above 200 DMA.

Xtep International (1368 HK) , Xiaomi Corp (1810 HK) and China Education Group (839 HK) all had breakouts to form uptrends.  All are part of the consumption sector in China



Technically Speaking, Breakouts and Breakdowns: HONG KONG (OCTOBER 14)

Thematic (Sector/Industry)

<ul>
<li>The announcement of "Draft for Comments on the Regulations on the Management of off-campus Training" has led to a 43.6% rebound of the education sector from the 2024 trough.</li>
<li>The "Draft" has cleared regulatory worries on after-school tutoring of high school students and non-academic subjects. For higher education space, we like <a href="https://www.smartkarma.com/entities/china-east-education-holdings" target="_blank" data-smartkarma-citation="entities:27843:1" rel="noopener">China East Education (667 HK)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Techn (9901 HK)</a>, <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US),</a> and <a href="https://www.smartkarma.com/entities/gaotu-techedu-inc" target="_blank" data-smartkarma-citation="entities:28069:1" rel="noopener">Gaotu Techedu (GOTU US)</a> are the most direct beneficiaries of the "Draft".</li>
</ul>


The announcement of "Draft for Comments on the Regulations on the Management of off-campus Training" has led to a 43.6% rebound of the education sector from the 2024 trough.
The "Draft" has cleared regulatory worries on after-school tutoring of high school students and non-academic subjects. For higher education space, we like China East Education (667 HK). 

New Oriental Education &amp; Techn (9901 HK), TAL Education (TAL US), and Gaotu Techedu (GOTU US) are the most direct beneficiaries of the "Draft".


China Private Education: Trigger for the Sharp Rebound, and What Follows......

<ul>
<li>The sharp rally of China's higher education stocks on 18 Nov reflects positive sentiment from announcement of "Implementation Plan for the Project of Reaching the Standards for Running Vocational Schools".</li>
<li>For <a href="https://www.smartkarma.com/entities/china-education-group-holdin" target="_blank" data-smartkarma-citation="entities:18218:1" rel="noopener">China Education Group (839 HK)</a>, potential resumption of dividend will be a driver. The 48% increase in 2022/23 registered students and 10pp utilisation growth have secured FY23 outlook.  </li>
<li>CEG's premium valuations are justified by execution capability, asset quality and earnings outlook. FY23 consensus forecasts are just too low and upgrades will be positive catalysts.</li>
</ul>


The sharp rally of China's higher education stocks on 18 Nov reflects positive sentiment from announcement of "Implementation Plan for the Project of Reaching the Standards for Running Vocational Schools".
For China Education Group (839 HK), potential resumption of dividend will be a driver. The 48% increase in 2022/23 registered students and 10pp utilisation growth have secured FY23 outlook.  
CEG's premium valuations are justified by execution capability, asset quality and earnings outlook. FY23 consensus forecasts are just too low and upgrades will be positive catalysts.


China Private Education: A Massive Comeback?

China

China Kepei Education Group provides private vocational education services, offering profession-oriented and vocational education across engineering, economics, management, education, and art majors. The company operates degree-granting undergraduate institutions and secondary vocational schools, alongside services like consulting and technical training. It was founded in 2000 and is headquartered in Zhaoqing, People's Republic of China.

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China Kepei Education Group (1890 HK)

Primer: Kepei Education (1890 HK) - Apr 2026

Kepei Education is a significant operator in China's private higher vocational education sector, a segment supported by favorable government...

αSK

China New Higher Education (2001 HK): Stays Cheap at 1.7x PER and 0.3x P/B

China New Higher Education shows improved gearing and strong profit growth in 1H25, with a promising medium-term outlook and attractive valuation...

Osbert Tang, CFA

Technically Speaking, Breakouts and Breakdowns: HONG KONG (OCTOBER 14)

HKD strengthens, HIBOR moves higher and HK shorts become more expensive. HK market breadth reached its highest level in 15 years last week. Xtep,...

David Mudd

China Private Education: Trigger for the Sharp Rebound, and What Follows......

The "Draft for Comments" of regulations on after-school tutoring has supported the rebound of the education sector. China East Education, New...

Osbert Tang, CFA

China Private Education: A Massive Comeback?

China's latest announcements on vocational education suggested that private involvement in higher education will continue to be welcomed. We like...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Primer: Kepei Education (1890 HK) - Apr 2026

Kepei Education is a significant operator in China's private higher vocational education sector, a segment supported by favorable government...

αSK

China New Higher Education (2001 HK): Stays Cheap at 1.7x PER and 0.3x P/B

​China New Higher Education shows improved gearing and strong profit growth in 1H25, with a promising medium-term outlook and attractive valuation...

Osbert Tang, CFA

Technically Speaking, Breakouts and Breakdowns: HONG KONG (OCTOBER 14)

HKD strengthens, HIBOR moves higher and HK shorts become more expensive. HK market breadth reached its highest level in 15 years last week. Xtep,...

David Mudd

China Private Education: Trigger for the Sharp Rebound, and What Follows......

​The "Draft for Comments" of regulations on after-school tutoring has supported the rebound of the education sector. China East Education, New...

Osbert Tang, CFA

China Private Education: A Massive Comeback?

China's latest announcements on vocational education suggested that private involvement in higher education will continue to be welcomed. We like...

Osbert Tang, CFA

China New Higher Education shows improved gearing and strong profit growth in 1H25, with a promising medium-term outlook and attractive valuation...

The "Draft for Comments" of regulations on after-school tutoring has supported the rebound of the education sector. China East Education, New...