[ET Net News Agency, 18 January 2021] Huatai Research lowered its target price for
Koolearn Technology (01797) to HK$39.5 from HK$40 and maintained its "buy" rating.
The research house said excessive online promotions and accelerated enrollment growth
likely caused online K-12 companies to incur huge losses the past summer. In view of
greater competition in 2H 2020, Huatai increased its FY2021/22 non-IFRS net loss forecasts
by 29.7%/50.8% to RMB958mn/RMB901mn.
It expects Koolearn to continue investing in course content and teaching staff
recruitment, while turning more prudent on student acquisition. Huatai expects industry
competition to rationalize in 2021 onwards, and companies to focus on teaching quality
that improves student retention and unit economics. It estimated non-IFRS net loss of
RMB958mn/RMB901mn/RMB451mn in FY2021/22/23. (KL)
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01797 EAST BUY
Nominal 
15.960 -1.660 (-9.421%) Others
18/01/2021 17:15
{I-bank focus}Huatai trims Koolearn (01797) to HK$39.5
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