Catalysts:
Privatization
Stock down mainly because of macroeconomics in China and not because of fundamentals, recovery is to be expected
Risks:
Increased regulations in China, especially in the private education sector
Privatization likely to fail
Business still not profitable with high expenditures and slow growth of revenues in recent years
Financial Analysis:
Revenues of RMB 1.11 Billion in HY21 up from RMB 626 million in HY20
Operating loss of RMB 220 million in HY21 vs of RMB 664 million in HY20
Net loss of RMB 76.7 million in 2Q21 vs RMB 255 million in 2Q20
Balance Sheet
Total assets: RMB 1.86 Billion; total liabilities: RMB 3.18 Billion; book value: Negative RMB 1.31 Billion
Cash: RMB 257 million, debts: None, current assets: RMB 592 million, current liabilities: RMB 2.83 billion
Valuations:
My personal Biases:
Too much uncertainty to make a good valuation for now
Conclusion
Stock could recover as the Chinese markets recover but with such a balance sheet and cashflows, I would prefer to stay away from it as this would be just speculation
Outside my circle of competence
