China Education Group Holdings Ltd

00839: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$58.30	Vdqdzfm	Rxbpcbgsxr

China Education Group Falls on Market Sentiments; Shares Attractive

Cheng Wang

May 4, 2022

We transfer coverage and take a fresh look at China Education Group, or CEG, leading to a cut in our fair value estimate to HKD 13.20 from HKD 22 per share. The cut is mainly attributable to lower earnings growth assumptions for our 10-year stage II period. Our near-term earnings estimates are largely unchanged. We keep our narrow moat and stable moat trend rating. The shares are trading at about a 50% discount to our fair value estimate due to negative sentiment toward the education sector given policy concerns, which we think is not fully warranted for CEG.

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