[ET Net News Agency, 21 September 2020] Guotai Junan International initiated coverage
on Koolearn Technology (01797) with a "buy" rating and a target price of HK$42.83.
The research house cited a report by iResearch saying that the market size of China's
online education is estimated to be RMB400.4bn in 2020, up 24.1%. China's K-12 online
education users are projected to grow 139% to 63.9 million in 2020, with a 35% penetration
rate of K-12 online education, according to another report by the CAS Key Laboratory of
Big Data Mining and Knowledge Management.
Guotai Junan forecast the net profit of Koolearn to be -RMB476mn/-RMB276mn/RMB189mn in
FY2021-23, respectively. The continued loss in shareholders' profit is mainly due to
increasing teaching staff, course research costs and selling and marketing expenses for
the expansion of K-12 business. (KL)