| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 52.10 | 95 |
| Intrinsic value (DCF) | 14.63 | -45 |
| Graham-Dodd Method | 5.40 | -80 |
| Graham Formula | n/a |
East Buy Holding Limited (Koolearn Technology) is a leading Chinese online extracurricular education provider operating through three core segments: College Education, K12 Education, and Pre-school Education. Founded in 2005 and headquartered in Beijing, the company delivers comprehensive educational solutions including college and overseas test preparation for students and professionals, after-school tutoring for K12 students, and early childhood education through its Donut English-learning platform. The company's innovative business model includes pre-recorded online education packages distributed to institutional clients such as universities, public libraries, telecom operators, and streaming platforms, complemented by software, technology, and education advisory services. Operating in China's massive education technology sector, East Buy leverages digital platforms to address the growing demand for quality supplementary education across diverse age groups. As a Hong Kong-listed education technology stock, the company represents a significant player in China's evolving edtech landscape, serving millions of students through accessible, technology-driven learning solutions.
East Buy presents a compelling investment case with strong profitability metrics, including HKD 1.72 billion net income on HKD 6.53 billion revenue, representing a robust 26.3% net margin. The company maintains a healthy balance sheet with HKD 2.26 billion cash against minimal debt (HKD 94.8 million), providing financial flexibility. However, the extremely negative beta of -3.082 suggests high volatility and potential non-correlation with broader market movements, which may concern risk-averse investors. The absence of dividends indicates a growth-focused capital allocation strategy. The company operates in China's heavily regulated education sector, which has experienced significant regulatory changes in recent years, presenting both compliance challenges and potential opportunities for established, compliant players like East Buy. The strong operating cash flow of HKD 856 million supports ongoing operations and potential expansion initiatives.
East Buy Holding Limited competes in China's fragmented but rapidly evolving online education market with a multi-segment approach that differentiates it from single-focus competitors. The company's competitive advantage stems from its comprehensive educational ecosystem covering college, K12, and pre-school segments, allowing for cross-selling opportunities and diversified revenue streams. Its institutional distribution model through universities, libraries, and telecom operators provides stable B2B revenue alongside direct-to-consumer offerings. The company's technology infrastructure supports scalable content delivery across multiple platforms, including its proprietary Donut English-learning app. However, East Buy faces intense competition from both specialized education providers and technology giants expanding into edtech. The company must navigate China's complex education regulations, which have reshaped the industry following recent crackdowns on for-profit tutoring. Its ability to maintain compliance while innovating educational content delivery will be critical. The negative beta suggests the stock behaves differently from both the education sector and broader market, possibly reflecting unique risk factors or market perception specific to Chinese edtech companies post-regulatory changes. The company's strong cash position provides ammunition for strategic acquisitions or technology investments to strengthen its competitive positioning.