EQS-News: CLSA and Zhongtai Securities Reiterated BUY on China New Higher Education Target Prices Are Raised to HKD5.14 and HKD4.80 respectively

CLSA and Zhongtai Securities Reiterated BUY on China New Higher Education

Target Prices Are Raised to HKD5.14 and HKD4.80 respectively

(Hong Kong, April 29, 2020) China New Higher Education Group Limited ("China New Higher Education", together with its subsidiaries, the "Group"; stock code: 2001.HK) announced that both CLSA and Zhongtai Securities International believed that the valuation of the Group was attractive. They reiterated BUY on the Group and raised the target prices to HKD5.14 and HKD4.80 respectively, and were positive towards the future development of the Group.

In the research report, CLSA pointed out that the Group entered into settlement agreement with the counterparties of the Xinjiang Project, who agreed to pay back the Company's prepayments of RMB137 million, which removed the uncertainty in prepayment recovery. CLSA observed that the Group would continue to focus on the organic growth from the existing schools, and gradually rebuild the confidence of investors by seeking potential M&A deals. With the elimination of uncertainty of the Xinjiang Project and the positive policies of the market on higher education, CLSA raised the target price of China New Higher Education to HKD5.14, which was 43% higher than the previous target price at HKD3.20, and reiterated BUY rating.

Zhongtai Securities International believed that the Company could collect prepayment on Xinjiang Project soon and eliminate the negative impact of the legal litigation. The negative factors that had nagged at the Company over the past two years have no long existed, which not only benefits the Company, but also serves as a catalyst of revaluation. Meanwhile, the recovery of the prepayment could raise cash reserves and improve the balance sheet. Zhongtai Securities raised the estimated net profit of the Group by 5.1% to RMB530 million for FY2020 to reflect: 1) one-off reverse provision, and 2) interest income arising from the increase in cash reserves. Reiterated BUY, and the target price was raised to HKD4.80 to reflect the above favourable factors.

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About China New Higher Education Group Limited:

China New Higher Education Group Limited is a leading private formal higher education group in China with 20 years of education industry experience, specializing in providing higher education which focuses on applied sciences. The Group endeavors to help each student maximize their potential and live their life to the fullest. Since 2009, the Group has been operating schools in different provinces and regions, and its current school network covers 7 provinces in China, including Yunnan, Guizhou, Hubei, Heilongjiang, Henan, Guangxi, and Gansu.

The Group provides high quality higher education in a wide selection of fields in applied sciences. Its courses are designed to equip students with practical and readily applicable skills, helping to prepare them for the job market. As a leader in high-quality employment, the Group won the title of the Top 50 National Employment of the MOE, with an average employment rate of above 97%. The Group became a constituent stock of the Hang Seng Composite Small Cap Index and the Hang Seng Consumer Goods & Services Index in the Hang Seng Composite Index Series in August 2017, and was included as a constituent stock of the MSCI China Small Cap Index in November 2017 and included as a constituent stock of Shenzhen and Hong Kong Stock Connect in March 2018.

This press release is distributed by Wonderful Sky Financial Group Limited on behalf of China New Higher Education Group Limited.

For further information, please contact:

Wonderful Sky Financial Group Limited

Aileen Wang / Georgina Zhao

Tel: (852) 3970 2226/ (852) 3970 2236

Email: [email protected]