Core Viewpoint - Minsheng Education (01569) expects a significant decrease in net profit for the six months ending June 30, 2025, projecting a reduction of approximately 56.4% compared to the net profit of about RMB 113 million for the six months ending June 30, 2024 [1] Group 1: Financial Performance - The anticipated net profit decline is primarily attributed to increased operational investments in schools within China, leading to a substantial rise in related costs compared to the same period in 2024 [1] - Additionally, the online education segment under the group has been adversely affected by market conditions, resulting in a significant drop in net profit compared to the six months ending June 30, 2024 [1]

智通财经APP讯，民生教育(01569)发布公告，集团截至2025年6月30日六个月止未经审核综合管理账目 所作之初步审阅以及公司目前所得资料，集团预计本期间的净利润将较截至2024年6月30日六个月止净 利润约人民币1.13亿元减少约56.4%。净利润预期下降的主要原因如下： 1.于本期间，集团中国营运学校持续加大办学投入，相关的成本与2024年6月30日六个月止同比有较大 幅度的增加。2.于本期间，集团旗下在线教育主体受到市场的影响，导致集团旗下在线教育主体的净利 润与2024年6月30日六个月止同比出现较大幅度的下滑。 ...

Core Viewpoint - Minsheng Education (01569.HK) expects a significant decline in net profit for the six months ending June 30, 2025, projecting a decrease of approximately 56.4% compared to the net profit of about RMB 113.2 million for the six months ending June 30, 2024 [1] Summary by Relevant Categories Financial Performance - The anticipated net profit for the period is expected to be substantially lower due to increased operational costs associated with the group's schools in China [1] - The online education segment under the group is also projected to experience a significant decline in net profit compared to the same period in 2024, influenced by market conditions [1]

Minsheng Education Group Company Limited 1569 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 並非基於已由本公司獨立核數師審核或審閱或由本公司審核委員會批准之數字或資料而 得出。因此，本集團之實際業績或會須予修訂及於需要時有所調整。 因此，股東及潛在投資者不應依賴該等財務資料，相信其會提供與經審核或審閱財務報 表相關之相同質量資料。 股東及潛在投資者於使用有關數據以評估本集團之財務狀況及營運業績時務請審慎行 事。本公司將於必要時就此刊發進一步公告。股東及潛在投資者務請細閱本公司將於 2025年8月底前所刊發本集團於本期間之年度業績公告。 承董事會命 民生教育集团有限公司 盈利預警 本公告由民生教育集团有限公司（「本公司」，連同其附屬公司及合併附屬實體統稱「本集 團」）根據香港聯合交易所有限公司證券上市規則（「上市規則」）第13.09條及香港法例第571 章證券及期貨條例第XIVA部之內幕消息之條文（定義見 ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 民生教育集团有限公司 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01569 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | USD | | 0.00001 | USD | | 100,000 | | 增加 / 減少 (-) | | | 0 | | | | USD | | 0 | | 本月底結存 | | | 10,000,000,000 | USD | | 0.00001 | USD | | 100,000 | 本月底法 ...

Financial Performance - The Group's revenue for the year ended 31 December 2024 was approximately RMB1,947.2 million, a decrease of 17.2% compared to RMB2,352.4 million in 2023[12]. - The gross profit for the same period was approximately RMB870.2 million, reflecting a gross margin of 44.7%[12]. - The Group's profit for the year was RMB47.7 million, a significant decline of 60.6% from RMB121.2 million in 2023[12]. - Total revenue decreased by approximately 17.2% to approximately RMB1,947.2 million for the year ended December 31, 2024, from approximately RMB2,352.4 million for the year ended December 31, 2023[77]. - The decrease in revenue was mainly due to the suspension of new student enrollment in online formal education, which began in the autumn of 2022[78]. - Gross profit decreased by approximately 31.0% from approximately RMB1,260.3 million for the year ended December 31, 2023, to approximately RMB870.2 million for the year ended December 31, 2024, with gross profit margin declining from approximately 53.6% to approximately 44.7%[87][91]. - Other income and gains decreased by approximately 17.5% from approximately RMB181.2 million for the year ended December 31, 2023, to approximately RMB149.5 million for the year ended December 31, 2024[88][92]. - Selling expenses decreased by approximately 21.5% from approximately RMB229.8 million for the year ended December 31, 2023, to approximately RMB180.3 million for the year ended December 31, 2024[95][99]. - Administrative expenses decreased by approximately 4.2% from approximately RMB504.4 million for the year ended December 31, 2023, to approximately RMB483.0 million for the year ended December 31, 2024[97][100]. - Other expenses increased by approximately 21.3% from approximately RMB153.2 million for the year ended December 31, 2023, to approximately RMB185.9 million for the year ended December 31, 2024, primarily due to impairment of goodwill and intangible assets[98][101]. - Finance costs decreased by approximately 22.0% from approximately RMB174.9 million for the year ended December 31, 2023, to approximately RMB136.4 million for the year ended December 31, 2024[103][106]. - The Group recorded a net profit of RMB47.7 million for the year ended December 31, 2024, compared to a net profit of approximately RMB121.2 million for the year ended December 31, 2023[105][108]. - Adjusted net profit for the Reporting Period decreased by approximately RMB93.9 million or approximately 34.3% compared to 2023, with an adjusted net profit margin dropping from approximately 11.7% to approximately 9.3%[111][112]. Assets and Liabilities - Total assets as of 31 December 2024 were approximately RMB11,255.4 million, with a gearing ratio of approximately 37.0%[17]. - As of December 31, 2024, the Group had net current assets of approximately RMB758.5 million, with current assets decreasing to approximately RMB4,222.3 million from RMB4,312.7 million as of December 31, 2023[113]. - Current liabilities decreased from approximately RMB3,775.2 million as of December 31, 2023, to approximately RMB3,463.8 million as of December 31, 2024, primarily due to the repayment of interest-bearing bank and other borrowings[114]. - The Group's interest-bearing bank and other borrowings amounted to approximately RMB2,198.3 million as of December 31, 2024, with effective interest rates ranging from 2.2% to 10.0% per annum[121][124]. - The gearing ratio increased to approximately 37.0% as of December 31, 2024, up from 35.9% as of December 31, 2023, due to a slight increase in interest-bearing borrowings[136]. Capital Expenditure and Commitments - The Group's capital expenditure on infrastructure capabilities was approximately RMB384.4 million during the reporting period[17]. - Capital expenditure for the year ended December 31, 2024, was approximately RMB384.4 million, mainly for the construction of school buildings and upgrading online education facilities[119][123]. - Capital commitments at the end of the Reporting Period included approximately RMB86.6 million for equipment and RMB164.6 million for buildings, totaling RMB342.996 million[117]. Education Services and Development - The Group aims to strengthen its position as a leading "Internet+" vocational education group by advancing high-quality development and building a digital service platform ecosystem[18]. - The Group operates over 1,900 learning centers across all 31 provinces in China, connecting approximately 3.1 million C-end users and 4 million job opportunities, serving a total scale of more than 50 million users[23]. - As of December 31, 2024, the Group managed 10 schools with a total student population of approximately 100,000, including around 61,000 full-time undergraduate students[25]. - The Group's online education services are supported by partnerships with approximately 350 domestic key universities and institutions, providing services through over 1,900 learning centers nationwide[31]. - The Group's vocational education network integrates eight business sectors, including on-campus education, online education services, and human resources services[23]. - The Group's schools offer a total of 119 undergraduate majors, 138 junior college majors, and 35 secondary vocational majors[25]. - The integration of industry and education has been promoted, with successful projects recognized by the Ministry of Education, including "New Engineering" and "New Liberal Arts" initiatives[26]. - The Group aims to continue benefiting from favorable policies in vocational education and plans to enhance its digital intelligence and employment service capabilities[20]. - The Group's comprehensive employment service capabilities connect colleges, students, and enterprises to achieve precise matching for talent employment[22]. - The Group's integration of industry and education focuses on strategic emerging industries such as artificial intelligence, big data, and blockchain[49]. - The Group cooperated with the Ministry of Industry and Information Technology and Baidu to issue Generative AI Training Standards and Certifications[49]. - The Group's education informatization services include a user-centric, end-to-end education service cloud platform[53]. - The Group's integrated platform supports collaboration in various strategic emerging industries, including AI and big data[52]. Government Support and Policies - The government allocated RMB31.257 billion to support the modernization and high-quality development of vocational education, which will benefit the Group's education businesses in China[15]. - The Chinese government allocated RMB 31.257 billion to support the modernization and high-quality development of vocational education in 2024[61]. - The National Education Work Conference in January 2024 emphasized enhancing the adaptability and attractiveness of vocational education[63]. - The Ministry of Human Resources and Social Security issued an action plan to cultivate digital talents to support the digital economy from 2024 to 2026[65]. - The Ministry of Education's policies are promoting the integration of various forms of continuing education, including online education, to enhance the sector's development[81]. Human Resources and Management - As of December 31, 2024, the Group employed approximately 6,700 employees, a decrease from approximately 6,900 employees in 2023[142][146]. - The Group reviewed and increased employee salaries in 2024 to motivate better performance, with increments based on performance, experience, and industry practices[143][146]. - The Group participates in various employee social security plans, including pension, medical, maternity, work-related injury, unemployment insurance, and housing provident fund[143][146]. - The Group provides training programs for existing and newly recruited employees and sponsors attendance at job-related training courses[144][146]. Leadership and Governance - Mr. Li Xuechun has over 20 years of experience in the education industry and has been the Chairman of the Board since January 17, 2006[147][149]. - Ms. Zhang Weiping, with over 20 years of experience in the education industry, serves as the Chief Executive Officer and has been with the Group since April 2007[151][152]. - Mr. Zuo Yichen, the President of the Company, has over 20 years of experience in finance and education, having joined the Group in August 2016[153][154]. - Mr. Lam Ngai Lung has served as the Chief Financial Officer since May 22, 2016, and has over 20 years of experience in accounting and finance[155]. - Mr. Liang Xingchao, aged 56, appointed as a non-executive director in December 2024, has been the deputy general manager of Shenzhen OCT Capital since December 2018[159]. - Ms. Li Yanping, aged 63, has over 30 years of experience in the financial service industry and has been a non-executive director since June 2017[160]. - Mr. Chan Ngai Sang, Kenny, aged 60, has over 35 years of experience in accounting and is an independent non-executive director since March 2017[164]. - Mr. Yu Huangcheng, aged 49, has served as an investment director at Kunwu Jiuding Capital since March 2010 and is an independent non-executive director since March 2017[165]. - Mr. Wang Wei Hung, Andrew, aged 69, has over 30 years of legal experience and has been an independent non-executive director since March 2017[168]. Risks and Challenges - Key operational risks include changes in market conditions of formal higher education and the regulatory environment in the PRC education industry[187]. - The Group's exposure to interest rate risk is primarily related to bank loans with floating interest rates, with no current use of derivative contracts for hedging[189]. - The Group faces competition from other school operators offering similar quality education and scale[187]. - The Group's management emphasizes the importance of risk management for its success[192]. - The Group has established risk management structures and measures to properly manage financial risks, detailed in the corporate governance report[197]. Legal and Arbitration Matters - The Group is involved in an arbitration dispute regarding a put option for the sale of 49% shares in Leed International, with the Vendors claiming an inflated exit price of approximately RMB2.18 billion[125]. - The Group has a dispute regarding the put option for the acquisition of 49% of Leed International, with the Vendors claiming an inflated exit price of RMB2,180,735,576.50[126]. - As of December 31, 2024, the Group made no provision related to the ongoing arbitration concerning the put option[127]. - The total principal amount of loans extended to Leed National Education Technology (Beijing) Limited is RMB400,000,000, secured by a pledge of 49% shares in Leed International[129]. - The Vendors and Leed National filed for arbitration claiming the obligation to repay the loan has been extinguished, while the Group counter-claimed for repayment of the principal and unpaid interest[129]. - As of December 31, 2024, certain buildings valued at approximately RMB79.2 million and time deposits of RMB551.3 million were pledged to secure bank loans[134]. - The conditional injunction order issued by the Grand Court of the Cayman Islands restricts the Group from enforcing share charges over the 49% stake in Leed International[132]. - The arbitration with CIETAC regarding the loan repayment is still ongoing as of the date of the annual report[131]. Future Outlook - The Group anticipates promising long-term prospects for its "internet +" vocational education business[84][89]. - The Group aims to increase student enrollment and raise tuition rates as part of its growth strategy[187]. - The Group aims to maintain a balance between funding continuity and flexibility through internally generated cash flows and other borrowings, regularly reviewing major funding positions to ensure adequate financial resources[196].

Core Viewpoint - Minsheng Education is implementing a new smart education ecosystem strategy, focusing on the dual development of "higher education + vocational education" and the integration of "campus education + online education" [2] Group 1: Company Overview - Minsheng Education Group was founded in 1998 and operates higher education and online education institutions in various regions including Beijing, Chongqing, Shandong, Yunnan, Inner Mongolia, Hong Kong, and countries like Singapore and Australia [2] - The company offers a wide range of educational services including associate, undergraduate, and graduate education, HSK (Chinese proficiency test), teacher training, IT online courses, and modern distance education public services [2] - As of November 2020, Minsheng Education had approximately 93,000 students enrolled in campus education (including about 56,000 undergraduates) and around 1.3 million students in online education [2] Group 2: Financial Performance - As of April 15, the stock price of Minsheng Education was HKD 0.131, up 2.34% from the previous trading day, with an intraday low of HKD 0.123, marking a near one-year low [1] - The net capital inflow on that day was HKD 99,800, with a total inflow of HKD 168,710 and outflow of HKD 68,900 [1] Group 3: Strategic Vision and Recognition - The company aims to become a leader in smart education and a trusted quality private higher education group, emphasizing the importance of technology in education [3] - Minsheng Education has received numerous accolades, including "National Advanced Social Organization" and "Top Ten Leading Brands in 2020" in the education industry, reflecting its recognition by educational authorities and society [3]

Financial Performance - Total revenue for the year ended December 31, 2024, was approximately RMB 1,947.2 million, a decrease of about 17.2% compared to 2023[4] - Adjusted EBITDA for the same period was approximately RMB 581.5 million, down approximately 41.2% from 2023[4] - Adjusted net profit for the year was approximately RMB 180.1 million, representing a decrease of about 34.3% compared to the previous year[4] - Gross profit for the year was approximately RMB 870.2 million, down from RMB 1,260.3 million in 2023[6] - The company reported a net profit of RMB 47.7 million for the year, compared to RMB 121.2 million in 2023[6] - Basic and diluted earnings per share for the year were RMB 0.0003, a significant decrease from RMB 0.0329 in 2023[8] - Other income and gains decreased by approximately 17.5% to about RMB 149.5 million for the year ended December 31, 2024, down from RMB 181.2 million for the year ended December 31, 2023, mainly due to a reduction in interest and investment income[75] - Selling expenses decreased by approximately 21.5% to about RMB 180.3 million for the year ended December 31, 2024, down from RMB 229.8 million for the year ended December 31, 2023, primarily due to a reduction and optimization of sales and marketing personnel[76] - Administrative expenses decreased by approximately 4.2% to about RMB 483.0 million for the year ended December 31, 2024, down from RMB 504.4 million for the year ended December 31, 2023, due to effective cost control[77] Assets and Liabilities - Total assets as of December 31, 2024, were approximately RMB 11,255.4 million, with net assets of approximately RMB 5,938.0 million[4] - Total liabilities as of December 31, 2024, were approximately RMB 5,318.0 million, compared to RMB 5,188.0 million in 2023[10] - The total assets of the group as of December 31, 2024, amounted to RMB 11,255,426,000, compared to RMB 11,366,568,000 in 2023, reflecting a slight decrease[21] - The total liabilities of the group were RMB 5,317,434,000 as of December 31, 2024, compared to RMB 5,415,429,000 in 2023, showing a reduction[22] - As of December 31, 2024, the company had a net current asset value of approximately RMB 758.5 million, with current assets decreasing from approximately RMB 4,312.7 million to RMB 4,222.3 million[86] - Current liabilities decreased from approximately RMB 3,775.2 million as of December 31, 2023, to approximately RMB 3,463.8 million as of December 31, 2024, primarily due to the repayment of certain interest-bearing bank and other borrowings[86] Capital and Investments - The capital debt ratio was approximately 37.0%, indicating a healthy level of leverage[4] - Capital expenditures for the year were RMB 384,385,000, with RMB 360,630,000 allocated to the campus education segment and RMB 23,755,000 to online education[21] - As of December 31, 2024, the group's capital commitments amounted to approximately RMB 342.996 million, a decrease of 27.0% from RMB 470.410 million in 2023[87] - The group had no significant investments, acquisitions, or disposals during the year ending December 31, 2024[101] - The group has ongoing arbitration regarding a dispute over the option to acquire 49% of Leed Education Holding Limited, with a claimed exit price of RMB 2,180,735,576.50[92] - The group has provided loans totaling RMB 400 million to Leed Education Technology (Beijing) Co., Ltd., secured by the 49% equity stake in Leed Group[95] Employee and Operational Metrics - As of December 31, 2024, the company employed approximately 6,700 employees, a decrease from 6,900 employees in 2023[103] - The company has reviewed and increased employee compensation for 2024 based on performance, experience, and industry standards[103] - The group operates or manages 10 schools across Chongqing, Shandong, Yunnan, and Inner Mongolia, with a total enrollment of approximately 100,000 students, including about 61,000 full-time undergraduates[44] - The group has established over 1,900 learning centers across 31 provinces, cities, and autonomous regions in China, serving a cumulative total of over 50 million students and users[43] Education Services and Partnerships - Campus education segment generated revenue of RMB 1,394,292,000, while online education segment contributed RMB 552,916,000 for the year ended December 31, 2024[19] - The group’s online education services have partnered with approximately 350 domestic key universities and established over 1,900 learning centers nationwide[48] - The group’s employment service platform connects approximately 42,000 employers with a job demand of about 4 million positions[55] - The group has linked approximately 310 million end-users and 400 million job positions, enhancing its employment service capabilities[43] - The education information service has partnered with over 400 institutions, serving over 13 million students through its online education platform, Youmook[58] Future Plans and Strategic Initiatives - The group plans to enhance the quality of higher education by optimizing teaching environments and strengthening professional teacher teams[65] - The group aims to advance a digital and intelligent service platform for learning, employment, and entrepreneurship, covering all aspects from enrollment to employment[66] - The group will accelerate the application of big data and artificial intelligence in its business areas to enhance talent cultivation[67] Tax and Regulatory Matters - The income tax expense for 2024 was reported as a negative RMB 36,307 thousand, a significant decrease from RMB 200,546 thousand in 2023, indicating a tax benefit[30] - The group did not declare any dividends for the current year, maintaining the same stance as in 2023[40] - The company did not declare any final dividends for the reporting period, compared to 0.98 HKD cents for the year ended December 31, 2023[107] - The independent auditor confirmed that the preliminary announcement data aligns with the consolidated financial statements for the year ended December 31, 2024[112] - The audit committee reviewed the company's accounting standards, internal controls, and financial reporting matters[111]

[Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides fundamental details about the company's identity and registration [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the group's operational performance, financial results, and strategic outlook for the reporting period [Business Review of the Reporting Period](index=5&type=section&id=Business%20Review%20of%20the%20Reporting%20Period) The Group, a leading 'Internet+' vocational education provider, saw campus education as its core with 100,000 students and progress in for-profit registration, while expanding other services to over 50 million users - The Group has established an integrated vocational education service system covering 'recruitment-assessment-teaching-practical training-examination-employment', with eight business segments including campus education, online education, and human resource services[5](index=5&type=chunk)[7](index=7&type=chunk) - Substantial progress has been made in the for-profit classification registration of campus education, with Yunnan University Dianchi College approved to be re-designated as a for-profit school, commencing enrollment under this designation in the 2024-2025 academic year[12](index=12&type=chunk)[14](index=14&type=chunk) Business Segment Key Data (As of June 30, 2024) | Business Segment | Key Data (As of June 30, 2024) | | :--- | :--- | | **Campus Education** | 10 schools, approximately 100,000 enrolled students | | **Online Education** | Approximately 350 partner institutions, serving about 630,000 students; MBAChina platform accumulated approximately 3.4 million registered users | | **Vocational Skills Enhancement** | Approximately 9 million cumulative teacher trainings; MOOC platform accumulated approximately 25 million users | | **Human Resources Services** | Approximately 900 partner HR agencies, 38,000 employers, connecting approximately 4.7 million C-end users | | **Education Informatization** | UMOOC platform partnered with over 400 institutions, serving over 13 million students | | **Examination and Assessment Services** | HSK online exams served over 180,000 cumulative candidates | [Future Outlook](index=15&type=section&id=Future%20Outlook) The Group's future strategy focuses on high-quality higher education development and building a digital service ecosystem covering learning, employment, and entrepreneurship, aligned with national policy support - The Group's development strategy aligns with national policy directions, including 'significantly improving the quality of vocational education' from the 2024 Government Work Report and 'accelerating the construction of an industry-education integration vocational education system' proposed by the Third Plenary Session of the 20th Central Committee[41](index=41&type=chunk) - Future core strategies include: - **High-Quality Development**: Continuously investing resources, optimizing teaching environment and faculty, and cultivating high-quality applied vocational talents - **Digital and Intelligent Ecosystem**: Comprehensively promoting the digitalization and intelligence of learning, employment, and entrepreneurship services, providing full-chain digital services for various schools and institutions[42](index=42&type=chunk)[44](index=44&type=chunk) [Financial Review of the Reporting Period](index=16&type=section&id=Financial%20Review%20of%20the%20Reporting%20Period) The Group's H1 2024 financial performance significantly declined, with total revenue down 10.7% due to reduced online education, leading to a 19.9% drop in gross profit and a 63.1% decrease in profit for the period Financial Indicators (RMB million) | Financial Indicator (RMB million) | H1 2024 | H1 2023 | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 1,079.8 | 1,209.0 | -10.7% | Reduced revenue due to cessation of online education enrollment | | **Cost of Sales** | 498.9 | 483.9 | +3.1% | Increase in staff salaries and allowances | | **Gross Profit** | 580.8 | 725.1 | -19.9% | Increased campus education expenses and decreased revenue | | **Gross Margin** | 53.8% | 60.0% | -6.2pp | - | | **Selling and Distribution Expenses** | 98.0 | 117.1 | -16.3% | Decrease in sales and marketing staff remuneration and promotion costs | | **Finance Costs** | 68.4 | 100.5 | -31.9% | Derecognition of interest on put option liability from acquisition of Lead Group | | **Income Tax Expense** | 72.8 | 30.2 | +141.1% | Provision for income tax for Group schools | | **Profit for the Period** | 113.2 | 306.5 | -63.1% | Decreased revenue and increased costs and expenses | | **Adjusted Net Profit** | 131.5 | 364.8 | -63.9% | Decline in operating performance | [Financial and Liquidity Position](index=20&type=section&id=Financial%20and%20Liquidity%20Position) The Group's liquidity tightened due to reduced cash and contract liabilities, with total interest-bearing borrowings at RMB 2.29 billion and a healthy gearing ratio of 38.0%, while facing a significant contingent liability from a put option dispute - As of June 30, 2024, current assets decreased to **RMB 3.67 billion** (end of 2023: RMB 4.31 billion), and current liabilities decreased to **RMB 3.19 billion** (end of 2023: RMB 3.78 billion), primarily due to a reduction in cash and cash equivalents and contract liabilities[53](index=53&type=chunk) - The gearing ratio (total interest-bearing borrowings/total equity) increased from **35.9%** at the end of 2023 to **38.0%**, remaining at a healthy level[61](index=61&type=chunk) - The Group is in an arbitration dispute with the seller of Lead Group regarding a put option for a 49% equity stake. The seller claims an exit price of approximately **RMB 2.18 billion**, which the company disputes. The put option liability has been derecognized, and no provision has been made for this arbitration[54](index=54&type=chunk)[55](index=55&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This section provides additional disclosures on shareholding, employee information, corporate governance, and significant events [Shareholding Structure](index=24&type=section&id=Shareholding%20Structure) As of June 30, 2024, Mr. Li Xuechun is the ultimate controlling shareholder with 71.71% stake, while Huachang International Limited holds 7.87% Shareholding Details | Shareholder Name | Capacity | Number of Shares | Shareholding Percentage | | :--- | :--- | :--- | :--- | | Mr. Li Xuechun | Controlling Shareholder (through controlled corporations) | 3,024,604,000 | 71.71% | | Huachang International Limited and parties acting in concert | Major Shareholder | 332,000,000 | 7.87% | [Share Option Scheme](index=26&type=section&id=Share%20Option%20Scheme) As of June 30, 2024, the company had 57,250,000 unexercised share options, with no changes in grants, exercises, cancellations, or lapses during the period - As of the end of the reporting period, **57,250,000** share options remained unexercised, with no changes to the share option scheme during the period[70](index=70&type=chunk)[73](index=73&type=chunk) [Corporate Governance and Other Disclosures](index=29&type=section&id=Corporate%20Governance%20and%20Other%20Disclosures) As of the reporting period end, the Group had approximately 6,900 employees, with no interim dividend recommended, and confirmed compliance with corporate governance codes - As of June 30, 2024, the Group had approximately **6,900** employees in mainland China and Hong Kong[73](index=73&type=chunk) - The Board did not recommend the payment of any dividend for the six months ended June 30, 2024[76](index=76&type=chunk)[81](index=81&type=chunk) - The company confirmed compliance with the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers under the Listing Rules during the reporting period[77](index=77&type=chunk)[78](index=78&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [Material Acquisitions, Litigation, and Covenants](index=31&type=section&id=Material%20Acquisitions%2C%20Litigation%2C%20and%20Covenants) Two material acquisitions remain uncompleted, the company faces significant litigation regarding the Lead Group acquisition, and loan agreements include covenants requiring the controlling shareholder to maintain at least a 51% stake - The acquisitions of a **51%** equity stake in Qufu Changyong Enterprise Management Consulting Co., Ltd. and a **51%** equity stake in Nanchang Hezhitong Education Consulting Co., Ltd. remain uncompleted as of the date of this interim report[86](index=86&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk)[93](index=93&type=chunk) - Loan agreements with institutions including International Finance Corporation (IFC), Bank of China Macau Branch, and Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) all contain specific performance covenants requiring controlling shareholder Mr. Li Xuechun to directly or indirectly hold not less than a **51%** equity stake in the company[102](index=102&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk) [Interim Condensed Consolidated Financial Statements and Notes](index=39&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements%20and%20Notes) This section presents the interim condensed consolidated financial statements and their accompanying notes, detailing the Group's financial position and performance [Financial Statements Overview](index=39&type=section&id=Financial%20Statements%20Overview) The financial statements reflect a challenging period with significant declines in revenue and profit, reduced cash reserves, negative operating cash flow, and continued investment in property and equipment Income Statement Items (RMB thousand) | Income Statement Items (RMB thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 1,079,786 | 1,209,022 | | Gross Profit | 580,838 | 725,077 | | Profit Before Tax | 185,932 | 336,722 | | Profit for the Period | 113,165 | 306,545 | | Profit Attributable to Owners of the Parent | 104,802 | 292,608 | | Basic Earnings Per Share (RMB) | 0.0248 | 0.0694 | Balance Sheet Items (RMB thousand) | Balance Sheet Items (RMB thousand) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Non-Current Assets | 7,110,772 | 7,053,903 | | Total Current Assets | 3,667,795 | 4,312,665 | | Total Current Liabilities | 3,188,231 | 3,775,242 | | Total Non-Current Liabilities | 1,571,415 | 1,640,187 | | Net Assets | 6,018,921 | 5,951,139 | | Total Equity | 6,018,921 | 5,951,139 | Cash Flow Statement Items (RMB thousand) | Cash Flow Statement Items (RMB thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (779,026) | (245,053) | | Net Cash Used in Investing Activities | (190,407) | (98,644) | | Net Cash Used in Financing Activities | (20,737) | (130,468) | | Net Decrease in Cash and Cash Equivalents | (990,170) | (474,165) | | Cash and Cash Equivalents at End of Period | 2,194,356 | 3,015,307 | [Key Notes to Financial Statements](index=49&type=section&id=Key%20Notes%20to%20Financial%20Statements) Notes to financial statements detail that revenue decline stemmed from online education, while campus education grew, with income tax provisions for for-profit registration, increased trade receivables, decreased contract liabilities, and total borrowings of RMB 2.29 billion - Due to ongoing for-profit classification registration for the Group's schools operating in mainland China, the Group has made a **25%** PRC corporate income tax provision on service fees collected for its academic education services[152](index=152&type=chunk) - As of June 30, 2024, total interest-bearing bank and other borrowings amounted to **RMB 2.286 billion**, of which **RMB 1.309 billion** were current liabilities[170](index=170&type=chunk) Segment Revenue (RMB thousand) | Segment Revenue (RMB thousand) | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | **Campus Education** | 752,217 | 741,142 | +1.5% | | **Online Education** | 327,569 | 467,880 | -30.0% | | **Total** | 1,079,786 | 1,209,022 | -10.7% | Major Revenue Sources (RMB thousand) | Major Revenue Sources (RMB thousand) | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Tuition Fees | 690,920 | 681,295 | +1.4% | | Accommodation Fees | 61,297 | 59,847 | +2.4% | | Distance Education Services | 209,296 | 341,118 | -38.6% | | Teacher Training Services | 13,570 | 45,255 | -70.0% |

[Interim Results Summary](index=1&type=section&id=Interim%20Results%20Summary) The group achieved key progress in for-profit school registration while experiencing a significant decline in core financial performance indicators during the period [Progress on For-Profit School Registration](index=1&type=section&id=1.%20Progress%20on%20For-Profit%20School%20Registration) The group achieved significant progress in for-profit school registration, with Dianchi College approved to operate as a for-profit entity from the 2024-2025 academic year - Yunnan University Dianchi College has been approved to convert into a for-profit private undergraduate institution, "Dianchi College," and will begin enrolling students under this status in the 2024-2025 academic year, marking a key milestone in the group's for-profit transformation[1](index=1&type=chunk) - Applications for for-profit school registration for other major schools within the group are still in various early stages[1](index=1&type=chunk) [Key Financial Performance Indicators](index=2&type=section&id=2.%20Key%20Financial%20Performance%20Indicators) The group experienced significant year-on-year declines in revenue, gross profit, and profit for the period, despite maintaining a healthy gearing ratio Overview of Key Financial Indicators for H1 2024 | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. RMB 1,079.8 million | Approx. RMB 1,209.0 million | -10.7% | | Gross Profit | Approx. RMB 580.8 million | Approx. RMB 725.1 million | -19.9% | | Profit for the Period | Approx. RMB 113.2 million | Approx. RMB 306.5 million | -63.1% | | Gross Profit Margin | Approx. 53.8% | Approx. 60.0% | -6.2 percentage points | Assets and Liabilities as of June 30, 2024 | Indicator | Amount | | :--- | :--- | | Total Assets | Approx. RMB 10,778.6 million | | Net Assets | Approx. RMB 6,018.9 million | | Gearing Ratio | Approx. 38.0% | [Interim Condensed Consolidated Financial Statements](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the group's consolidated financial performance and position, highlighting key changes in income, assets, and liabilities [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The group's revenue declined by 10.7%, leading to a substantial 63.1% decrease in profit for the period and a significant drop in basic earnings per share Core Data from Consolidated Statement of Profit or Loss (For the six months ended June 30) | Item (RMB '000) | 2024 (Unaudited) | 2023 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,079,786 | 1,209,022 | -10.7% | | Gross Profit | 580,838 | 725,077 | -19.9% | | Profit Before Tax | 185,932 | 336,722 | -44.8% | | Profit for the Period | 113,165 | 306,545 | -63.1% | | Profit Attributable to Owners of the Parent | 104,802 | 292,608 | -64.2% | | Basic Earnings Per Share (RMB) | 0.0248 | 0.0694 | -64.3% | [Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the group's total assets slightly increased, while cash and cash equivalents and contract liabilities significantly decreased Core Data from Consolidated Statement of Financial Position | Item (RMB '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 7,110,772 | 7,053,903 | +0.8% | | Total Current Assets | 3,667,795 | 4,312,665 | -14.9% | | **Total Assets** | **10,778,567** | **11,366,568** | **-5.2%** | | Total Current Liabilities | 3,188,231 | 3,775,242 | -15.6% | | Total Non-current Liabilities | 1,571,415 | 1,640,187 | -4.2% | | **Total Liabilities** | **4,759,646** | **5,415,429** | **-12.1%** | | **Net Assets** | **6,018,921** | **5,951,139** | **+1.1%** | - Cash and cash equivalents decreased from approximately **RMB 3.19 billion** at the end of 2023 to **RMB 2.19 billion**[5](index=5&type=chunk) - Contract liabilities, primarily advance tuition fees, significantly decreased from approximately **RMB 833 million** at the end of 2023 to **RMB 108 million**[5](index=5&type=chunk)[24](index=24&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the group's operating segments, revenue breakdown, and other significant financial items [Operating Segment Information](index=8&type=section&id=3.%20Operating%20Segment%20Information) Campus education revenue slightly increased but segment results declined, while online education revenue significantly decreased and turned to a loss, impacting overall group performance Segment Revenue and Results (For the six months ended June 30) | Segment (RMB '000) | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | **Segment Revenue** | | | | | Campus Education | 752,217 | 741,142 | +1.5% | | Online Education | 327,569 | 467,880 | -29.9% | | **Segment Results** | | | | | Campus Education | 283,924 | 394,152 | -28.0% | | Online Education | (2,372) | 50,251 | N/A (Profit to Loss) | [Revenue, Other Income and Gains](index=10&type=section&id=4.%20Revenue%2C%20Other%20Income%20and%20Gains) Total revenue declined by 10.7% due to a significant drop in online distance education services, while campus education fees showed stable growth Revenue from Contracts with Customers Breakdown (For the six months ended June 30) | Item (RMB '000) | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Tuition Fees | 690,920 | 681,295 | +1.4% | | Accommodation Fees | 61,297 | 59,847 | +2.4% | | Distance Education Services | 209,296 | 341,118 | -38.6% | | Teacher Training Services | 13,570 | 45,255 | -70.0% | | **Total** | **1,079,786** | **1,209,022** | **-10.7%** | [Other Financial Notes](index=12&type=section&id=Other%20Financial%20Notes) Impairment losses on financial assets significantly increased, income tax expense surged, and no interim dividend was declared, impacting the group's financial performance - Impairment loss on financial assets shifted from a net reversal of **RMB 1.84 million** in the prior period to a net loss of **RMB 58.14 million** in the current period, significantly impacting profit[17](index=17&type=chunk) - Income tax expense increased from **RMB 30.18 million** in the prior period to **RMB 72.77 million**, a year-on-year increase of **141.1%**, primarily due to income tax provisions made for the group's schools during the reporting period[18](index=18&type=chunk)[50](index=50&type=chunk) - The Board did not declare any interim dividend for the six months ended June 30, 2024[19](index=19&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's diverse business segments, strategic outlook, and a detailed review of its financial performance and liquidity position [Business Review](index=16&type=section&id=Business%20Review%20for%20the%20Reporting%20Period) The group operates as an "Internet+" vocational education provider across eight segments, serving over 50 million cumulative users with significant scale in campus and online education - The group has established eight major business segments, including campus education, online education, vocational skills enhancement, and human resource services, forming a nationwide vocational education network and talent employment service system[25](index=25&type=chunk) [Campus Education](index=16&type=section&id=1.%20Campus%20Education) Campus education, a cornerstone business, operates 10 schools with approximately 100,000 students, and one institution ranked 18th nationally among private universities Campus Education Business Scale | Item | Quantity | | :--- | :--- | | Number of Schools | 10 | | Total Student Enrollment | Approx. 100,000 | | Proportion of Full-time Undergraduates | Approx. 59% | | Undergraduate Programs | 121 | | Higher Vocational (Associate Degree) Programs | 146 | - Chongqing College of Humanities, Science and Technology, one of the group's institutions, ranked **18th** among national private universities in the 2024 Soft Science China University Rankings, retaining its position as the top private university in Chongqing[27](index=27&type=chunk) [Online Education Services](index=18&type=section&id=2.%20Online%20Education%20Services) Online education provides academic support to approximately 630,000 students through collaborations with 350 institutions, and its MBAChina platform has 3.4 million registered users - Online higher education continuing education services provide support to approximately **630,000** students through over **1,900** learning centers[29](index=29&type=chunk) - The MBAChina platform for management postgraduate education services has accumulated approximately **3.4 million** registered users and collaborates with over **200** domestic and international business schools[30](index=30&type=chunk) [Vocational Skills Enhancement and Training](index=18&type=section&id=3.%20Vocational%20Skills%20Enhancement%20and%20Training) This segment includes teacher continuing education and IT vocational training, with Aopeng Education training 9 million teachers and Mooc.net accumulating 25 million users - Teacher continuing education training has cumulatively trained approximately **9 million** teachers[32](index=32&type=chunk) - The IT vocational training platform Mooc.net has accumulated approximately **25 million** users[33](index=33&type=chunk) [Other Business Segments](index=20&type=section&id=Other%20Business%20Segments) The group is expanding into human resources, digital education, and examination services, with its HR platform connecting 4.7 million users and HSK online exams serving over 180,000 candidates - The human resources service platform "Youxueleyi" covers over **20** provinces and cities nationwide, connecting approximately **4.7 million** C-end users and **38,000** employers[35](index=35&type=chunk) - The HSK online examination service has established over **80** test centers domestically and internationally, cumulatively serving over **180,000** candidates[38](index=38&type=chunk) [Future Outlook](index=22&type=section&id=Future%20Outlook) The group plans to enhance high-quality higher education and build a digital service platform ecosystem integrating learning, employment, and entrepreneurship - Strategy one: Steadfastly pursue high-quality development in higher education, increasing resource investment, optimizing teaching environment and faculty, and cultivating high-quality applied talents[40](index=40&type=chunk) - Strategy two: Continue to build a digital intelligence service platform ecosystem integrating "learning, employment, and entrepreneurship," comprehensively promoting service digitalization and intelligence[41](index=41&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review%20for%20the%20Reporting%20Period) Total revenue declined by 10.7% due to reduced online education, while increased impairment losses and higher staff costs led to a significant 63.1% drop in profit for the period - Total revenue decreased by **10.7%**, primarily due to reduced online education revenue as Aopeng Education ceased network education enrollment[42](index=42&type=chunk) - Gross profit margin decreased from **60.0%** to **53.8%**, mainly due to increased campus education expenses[44](index=44&type=chunk) - Other net expenses increased from **RMB 6.7 million** to **RMB 59.7 million**, primarily due to increased impairment loss on financial assets[48](index=48&type=chunk) Reconciliation of Adjusted Net Profit (For the six months ended June 30) | Item (RMB '000) | 2024 | 2023 | | :--- | :--- | :--- | | Profit for the Period | 113,165 | 306,545 | | Add: Amortization of acquisition-related intangible assets, etc. | 21,570 | 65,482 | | **Adjusted Net Profit** | **131,547** | **364,822** | [Financial and Liquidity Position](index=26&type=section&id=Financial%20and%20Liquidity%20Position) The group maintains a healthy gearing ratio despite increased borrowings, but faces a significant contingent liability from an arbitration dispute over a put option - The gearing ratio (total interest-bearing borrowings/total equity) increased from **35.9%** at the end of 2023 to **38.0%** as of June 30, 2024, which the company considers a healthy level[60](index=60&type=chunk) - The group has a significant contingent liability: an arbitration dispute with the former shareholders of Lead Group regarding a put option for 49% equity, with the counterparty claiming approximately **RMB 2.18 billion**; the company believes the exercise of the option is invalid and has fulfilled its obligations regarding the granted option, thus no provision has been made[55](index=55&type=chunk) - Related to the aforementioned dispute, the recovery of the **RMB 400 million** loan principal and interest provided by the company to Lead Guojiao is also subject to arbitration[56](index=56&type=chunk) [Other Corporate Information](index=29&type=section&id=Other%20Corporate%20Information) This section covers the company's dividend policy, securities activities, and adherence to corporate governance standards [Dividends and Securities](index=29&type=section&id=Dividends%20and%20Securities) The Board did not declare an interim dividend, and no listed securities were purchased, sold, or redeemed during the reporting period - The Board did not declare an interim dividend for the six months ended June 30, 2024[64](index=64&type=chunk) - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[65](index=65&type=chunk) [Corporate Governance](index=29&type=section&id=Corporate%20Governance) The company maintained high corporate governance standards, complying with listing rules and having its interim results reviewed by the audit committee - The company complied with the provisions of the Corporate Governance Code in the Listing Rules of the Stock Exchange during the reporting period[62](index=62&type=chunk) - The company's Audit Committee has reviewed these interim results[66](index=66&type=chunk)