gChinaEducationConsumerHotels/Leisure/GamingIndustryUpdateAsiaChinaIndustryChinaEducationDate26January2018DeutscheBankMarketsResearchTwo-childpolicybenefitsK12educationmarket;ExpertcallonJan29What'snew?NewbornsinChinashiftedtosecond-childin2017NationalBureauofStatistics(NBS)recentlyreportedthatatotalof17.23mbabieswerebornin2017,aslightdecreaseof0.63moverthetotalin2016(17.86mnewborns).Inaddition,therewere8.83msecond-childbirthsin2017,anincreaseof1.62mover2016.DB'sview-Increasednewbornsin2016/17benefitK12educationmarketinthelongtermAlthoughtherewasaslightyoydropofnewbornsandbirthrate,thesetwonumbersin2017recordedthesecondhighestsince2003.Afterthetwo-childpolicystartedtotakeeffectin2016,newborngrowthwasmainlydrivenbythesecond-childbirths.MorethanhalfofChinesenewborns(51.2%)in2017aresecondchildren(vs.c.40%in2016).Webelievetheincrementalnewbornsof1-2min2016/17willsoon(inthenext3-5years)becometheconsumptionpowerofthepre-schoolandyoungchildren’seducationmarket.IndustryspecialistconferencecallonChinaK12Education;MondayJan29,10:30amHKTWewillhostaconferencecallwithaspecialistinK12TutoringinChina,Mr.WentaoZhu(RegionalSchoolMasterofHefeiOnlymidEducation)■ChinaEducationUpdate-K12TutoringExpansionandPenetrationinChina;MondayJan29,10:30amHKT■When:29Jan2018,Monday*GroupConferenceCall(MandarinOnly)@10:30HKT/02:30LONtime/21:30(28thJan)NYtimeTallanZhouResearchAnalyst+852-22036464ToppicksNewOriental(EDU.N),USD101.69BuyTALEducation(TAL.N),USD28.99BuySource:DeutscheBankCompaniesfeaturedNewOriental(EDU.N),USD101.69Buy2017A2018E2019EP/E(x)26.339.829.3EV/EBITDA(x)17.033.122.7Price/book(x)6.77.05.7TALEducation(TAL.N),USD28.99Buy2017A2018E2019EP/E(x)36.867.946.1EV/EBITDA(x)28.157.534.3Price/book(x)10.416.111.6Source:DeutscheBankDeutscheBankAG/HongKongDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmak...
