Financial Performance - For the six months ended February 29, 2024, the company reported total revenue of RMB 640,111,000, an increase from RMB 548,044,000 for the same period in 2023, representing a growth of approximately 16.8%[37]. - Tuition fees accounted for RMB 587,932,000, up from RMB 509,476,000 in the previous year, indicating a year-over-year increase of about 15.4%[37]. - Boarding fees increased to RMB 52,179,000 from RMB 38,568,000, reflecting a growth of approximately 35.4%[37]. - The company achieved a profit before tax of approximately RMB 240.6 million, which is a year-on-year increase of about 9.6% from RMB 219.6 million[43]. - The company reported a net profit margin of 34.4%, down 4.8% from the previous year[52]. - The company recorded a gross profit of approximately RMB 344.8 million, an increase of about 6.8% from RMB 322.9 million year-on-year, resulting in a gross margin of 53.9%, down 5.0% from the previous year[39]. - Operating profit rose to RMB 287.6 million for the six months ended February 29, 2024, up from RMB 268.1 million for the same period in 2023, reflecting an increase of approximately 7.3%[139]. - Profit for the period attributable to owners of the company was RMB 219.9 million for the six months ended February 29, 2024, compared to RMB 215.1 million for the same period in 2023, marking a growth of about 2.0%[139]. - Basic and diluted earnings per share for the six months ended February 29, 2024, were RMB 0.183, compared to RMB 0.179 for the same period in 2023, representing an increase of approximately 2.2%[139]. Expenses and Costs - Employee benefit expenses increased to RMB 165,849,000, up from RMB 120,376,000, reflecting a growth of approximately 37.7%[19]. - Total sales costs, selling expenses, and administrative expenses reached RMB 367,456,000, an increase from RMB 297,205,000, representing a growth of approximately 23.6%[19]. - Financial income from bank interest was RMB 2,788,000, while financial expenses from bank loans amounted to RMB (44,234,000), resulting in a net financial expense of RMB (46,994,000) for the period[9]. - Financial expenses amounted to approximately RMB 49.8 million, a decrease of about 4.6% from RMB 52.2 million for the same period last year[42]. - Marketing expenses increased by approximately 114.3% to RMB 13.5 million due to higher promotional spending for the 2023/2024 academic year[56]. Assets and Liabilities - As of February 29, 2024, total borrowings (including principal and interest) amounted to RMB 2,697,680,000, with RMB 449,750,000 due within one year[32]. - The group's total assets amounted to RMB 6,959,028,000, a decrease from RMB 7,274,639,000 as of August 31, 2023, representing a decline of approximately 4.3%[117]. - The company's total equity increased to RMB 3,580,827,000 as of February 29, 2024, compared to RMB 3,366,207,000 as of August 31, 2023, reflecting an increase of about 6.4%[117]. - The total liabilities decreased to RMB 3,378,201,000 as of February 29, 2024, down from RMB 3,908,432,000 as of August 31, 2023, indicating a reduction of approximately 13.6%[118]. - The company reported cash and cash equivalents of RMB 424,321,000 as of February 29, 2024, a significant decrease from RMB 985,499,000 as of August 31, 2023, representing a decline of about 56.9%[117]. Student Enrollment and Education Services - The number of enrolled students was 54,077, a slight decrease of 0.1% from 54,109 students in the previous year[52]. - The total number of students enrolled as of February 29, 2024, was 54,077, a slight decrease of 0.1% from 54,109 in the previous year[97]. - The number of students at Huazhi College increased by 16.5% to 25,183 from 21,615 in the previous year[97]. - The occupancy rate for the total capacity of the schools is 81.2% for the 2023/2024 academic year, down from 88.9% in the previous year[77]. - The group operates three schools in Guangdong Province, all of which offer government-recognized degrees or certificates[95]. Taxation and Compliance - The group benefits from a reduced income tax rate of 15% for certain subsidiaries in China, as per local tax incentives[10]. - The company has not recorded taxable profits in Hong Kong for the six months ended February 29, 2024, and therefore has not made any provisions for Hong Kong profits tax[24]. - The company continues to benefit from tax incentives for educational services provided in mainland China, with no income tax expenses recognized for the period[23]. - The estimated average annual tax rate used for the six months ended February 29, 2024, was 9.1%, compared to 1.7% for the six months ended February 28, 2023[174]. Capital Expenditures and Commitments - For the six months ended February 29, 2024, the group recorded capital expenditures of approximately RMB 282.6 million, a decrease of about 4.8% compared to RMB 296.7 million for the six months ended February 28, 2023, primarily due to reduced expenditures on new campus construction[90]. - The company has significant capital commitments for property, plant, and equipment amounting to RMB 94,613,000 expected to be incurred within the next twelve months[123]. - The company has unutilized committed credit facilities totaling RMB 2.1 billion, valid until April 18, 2025, and is in discussions with several commercial banks for additional credit[47]. Governance and Risk Management - The company’s financial risk management policies have not changed during the reporting period[29]. - The company has implemented plans and measures to ensure sufficient cash flow for ongoing operations over the next twelve months[144]. - The company has maintained compliance with corporate governance codes and standards throughout the reporting period[135]. - The group actively monitors foreign exchange risks and considers hedging significant foreign currency risks when necessary[91]. - The company’s independent audit committee consists of three independent non-executive directors, ensuring the integrity and accuracy of the financial information[114].

Financial Performance - For the year ended August 31, 2023, the Group's revenue amounted to approximately RMB 1,083.3 million, representing an increase of approximately 19.3% from approximately RMB 907.8 million for the corresponding period last year [21]. - Gross profit for the year was RMB 624.6 million, an increase of 29.5% from RMB 482.2 million in the previous year [17]. - Profit for the year increased to RMB 393.0 million, reflecting a growth of 51.3% compared to RMB 259.8 million in the prior year [17]. - Adjusted net profit for the year was RMB 405.1 million, up 53.6% from RMB 263.8 million in the previous year [17]. - Earnings per share increased to RMB 0.328, representing a growth of 51.9% from RMB 0.216 in the previous year [17]. - The gross profit ratio improved to 57.7%, up from 53.1% in the previous year, indicating enhanced profitability [17]. - The group's revenue increased from approximately RMB 907.8 million for the year ended August 31, 2022, to approximately RMB 1,083.3 million for the year ended August 31, 2023, representing a growth of RMB 175.5 million [26]. - The Group's net profit for the year was RMB 393.0 million, up from RMB 259.8 million in the previous year, representing a year-on-year growth of approximately 51.2% [124]. - The Group recorded a profit before taxation of approximately RMB 398.2 million for the year ended August 31, 2023, which is an increase of approximately 42.8% year-on-year from RMB 278.9 million [112]. Student Enrollment and Educational Offerings - The number of student enrollments in the Group was 52,740, representing an increase of 11.9% from 47,131 as at August 31, 2022 [23]. - The increase in revenue was attributed to a rise in both student numbers and average tuition fees [23]. - Huali College saw a 22.4% increase in enrollment, with 21,567 students compared to 17,622 students in the previous year [44]. - Huali Vocational College's enrollment increased by 12.0%, reaching 20,532 students from 18,338 students [44]. - Huali Technician College experienced a decrease in enrollment by 4.7%, with 10,641 students compared to 11,171 students in the previous year [44]. - The total number of students enrolled across all schools increased to 52,740 for the academic year 2022/2023, up from 47,131 in 2021/2022 [55]. - The company offers a total of 38 undergraduate majors and 1,850 undergraduate programs across its schools [36]. - The Group continues to focus on applied science-focused and practice-oriented programs in its educational offerings [22]. Revenue Sources and Tuition Fees - Tuition fees accounted for approximately 93.0% of total revenue for the year ended August 31, 2023 [48]. - Huali College's tuition revenue increased by 29.2% to RMB623.5 million, while Huali Vocational College's tuition revenue rose by 16.5% to RMB275.7 million [50]. - The average tuition fees per student increased to RMB19,110 for the year ended August 31, 2023, compared to RMB17,748 in the previous year [55]. - The average tuition fee for Huali College rose to RMB28,908, up from RMB27,391 in the previous year [55]. - Boarding fees increased by 5.8% to RMB75.4 million, with Huali College seeing a significant rise of 47.4% in boarding fees [50]. Campus and Infrastructure Development - The Group operates three schools, maintaining the same number as the previous year, which supports its stable educational offerings [18]. - The Group plans to enhance campus construction and improve teaching quality to boost profitability [29]. - The school capacity for the Zengcheng campus increased to 29,556 in the 2022/2023 academic year from 28,971 [68]. - The company aims to align its educational services with local economic development to cultivate high-quality skilled talents [75]. Strategic Plans and Future Outlook - The company aims to develop a diversified non-formal vocational education business focusing on an asset-light model for sustainable long-term growth [29]. - The Group plans to register its three schools as for-profit private schools, subject to further detailed local rules and regulations [86]. - The Group intends to align its educational services with local economic development to cultivate high-quality skilled talents [75]. - The Group's expansion strategy through acquisitions will not be impacted by the new implementation rules [93]. Management and Governance - The board consists of seven directors, including four executive directors and three independent non-executive directors [145]. - The management team has a diverse background in education and finance, enhancing the company's strategic direction [175]. - The company emphasizes civic engagement, with board members actively participating in local governance and educational initiatives [177]. - The company is committed to continuous improvement in educational standards and training methodologies [164].

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份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。 China Vocational Education Holdings Limited 中國職業教育控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1756） 截至2023年8月31日止年度之年度業績公告 摘要 於2023年 於2022年 百分比 8月31日 8月31日 變動 變動 學校數目 3 3 – – 就讀學生人數 52,740 47,131 5,609 11.9% 截至2023年 截至2022年 8月31日 8月31日 百分比 止年度 止年度 變動 變動 （人民幣千元）（人民幣千元）（人民幣千元） 收入 1,083,304 907,762 175,542 19.3% 毛利 624,604 482,151 142,453 29.5% 年內利潤 393,047 259,784 133,263 51.3% 經調整純利(1) 405,132 263,838 141,294 53.6% ...

Revenue and Income - Revenue for the six months ended February 28, 2023, was RMB 548,044,000, an increase of 19.3% from RMB 459,465,000 for the same period in 2022[5]. - Tuition fees accounted for RMB 509,476,000, up from RMB 423,307,000, representing a growth of 20.3% year-over-year[5]. - Other income for the six months ended February 28, 2023, totaled RMB 16,990,000, an increase of 17.9% compared to RMB 14,402,000 in the prior year[9]. - For the six months ended February 28, 2023, the profit attributable to owners of the Company was RMB 215,055,000, an increase of 50% compared to RMB 143,461,000 for the same period in 2022[42]. - The basic earnings per share for the six months ended February 28, 2023, was RMB 0.179, up from RMB 0.120 in the previous year, reflecting a growth of 49.2%[42]. - For the six months ended February 28, 2023, the comprehensive income was RMB 3,111,670, an increase from RMB 2,896,615 for the same period last year[166]. Expenses and Costs - Employee benefit expenses rose to RMB 120,376,000, a 22.1% increase from RMB 98,546,000 in the previous year[13]. - Total expenses for the period were RMB 297,205,000, up from RMB 276,752,000, reflecting a growth of 7.4%[13]. - Interest expenses on bank borrowings amounted to RMB 48,710,000, slightly increasing from RMB 47,637,000 year-over-year[19]. - Interest expenses on other borrowings due to a related party were RMB 9,178,000, up from RMB 8,625,000, reflecting a rise of 6.4%[19]. - Interest expenses on the discount of long-term payables for property, plant, and equipment decreased significantly to RMB 1,523,000 from RMB 6,444,000, a reduction of 76.4%[19]. - The Group's financial strategy includes capitalizing interest expenses in property, plant, and equipment, which amounted to RMB 8,822,000, down from RMB 17,344,000[19]. Assets and Liabilities - The Group's assets are primarily located in mainland China, with approximately 99% of carrying values situated there[3]. - As of February 28, 2023, total assets amounted to RMB 2,040,605, up from RMB 1,825,550 as of September 1, 2022, reflecting growth in the company's asset base[166]. - The total liabilities as of February 28, 2023, were RMB 3,459,805, compared to RMB 3,437,624 as of August 31, 2022, showing a slight increase of approximately 0.6%[192][197]. - The Group's maximum exposure to credit risk was the carrying value of trade and other receivables, which were all denominated in RMB as of February 28, 2023[71]. - The total borrowings amounted to RMB 2,471,746,000 as of February 28, 2023, an increase from RMB 2,449,419,000 as of August 31, 2022[93]. Taxation - The estimated average annual income tax rate for the six months ended February 28, 2023, was 1.7%, a significant decrease from 7.2% for the same period in 2022[26]. - Certain wholly-owned subsidiaries in minority autonomous regions enjoyed a preferential corporate income tax rate of 15%[24]. - The Group did not recognize any income tax expense for the income from the provision of educational services in respect of the PRC Operating Entities during the period[24]. - The current tax on profits for the period was RMB 4,515,000 for the six months ended February 28, 2023, compared to RMB 13,070,000 for the same period in 2022[39]. Cash Flow and Financial Position - For the six months ended February 28, 2023, net cash generated from operating activities was RMB 10,995,000, an increase from RMB 9,589,000 in the same period last year[169]. - The total cash and cash equivalents decreased to RMB 538,352,000 as of February 28, 2023, down from RMB 803,845,000 as of August 31, 2022, a decline of 33.0%[76]. - The Group's current liabilities exceeded its current assets by RMB 671,311,000 as of February 28, 2023[173]. - The net decrease in cash and cash equivalents for the period was RMB (265,520,000), compared to RMB (322,784,000) in the previous year[169]. - The Group's cash flow projection indicates sufficient financial resources to continue as a going concern[173]. Related Party Transactions - Amounts due from related parties as of February 28, 2023, included RMB 13,864,000 from Yunfu Bilingual School and RMB 14,638,000 from Hualiyuan Technology[138]. - Amounts due to related parties included RMB 53,408,000 owed to Huali Construction and its subsidiaries as of February 28, 2023[138]. - Loans from related parties, specifically Huali Construction and its subsidiaries, totaled RMB 123,000,000[124]. - The Group's total liabilities to related parties amounted to RMB 69,574,000 as of February 28, 2023, compared to RMB 60,648,000 as of August 31, 2022[138]. Investments and Property - The Group reported a fair value gain on investment properties of RMB 100,000 for the six months ended February 28, 2023[11]. - The closing net book amount for investment properties as of February 28, 2023, was RMB 183,670, slightly up from RMB 183,352 as of February 28, 2022, reflecting a marginal increase of 0.17%[57]. - The company recognized revaluation gains of RMB 100 as other gains for the six months ended February 28, 2023, compared to no gains recognized in the same period of the previous year[57]. Educational Developments - Huali College was officially converted into an independently established private general undergraduate college in May 2021, enhancing its educational offerings[155]. - The company is focused on developing new educational programs and technologies to enhance its vocational training offerings[155]. - The company continues to expand its market presence in South China, which includes Guangdong, Guangxi, and Hainan provinces[157]. Financial Risk Management - The Group's activities expose it to various financial risks, including market risk and liquidity risk, which are actively monitored and managed[179]. - The Group's financial risk management information should be read in conjunction with the 2022 Financial Statements for a comprehensive understanding[179]. - The Group's interim financial information has been prepared on a going concern basis, reflecting its ability to meet financial obligations[175].

[Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) The Group achieved significant growth in revenue and profit, increased student enrollment, and improved gross and adjusted net profit margins for the six months ended February 28, 2023 Key Financial and Operating Data for the Six Months Ended February 28, 2023 | Indicator | Six Months Ended Feb 28, 2023 | Six Months Ended Feb 28, 2022 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Number of Schools | 3 | 3 | – | – | | Enrolled Students | 54,109 | 48,468 | 5,641 | 11.6% | | Revenue (RMB thousands) | 548,044 | 459,465 | 88,579 | 19.3% | | Gross Profit (RMB thousands) | 322,875 | 249,786 | 73,089 | 29.3% | | Profit for the Period (RMB thousands) | 215,055 | 142,927 | 72,128 | 50.5% | | Adjusted Net Profit (RMB thousands) | 216,532 | 141,844 | 74,688 | 52.7% | | Earnings Per Share (RMB) | 0.179 | 0.120 | 0.059 | 49.2% | | Gross Margin | 58.9% | 54.4% | +4.5% | | | Operating Margin | 48.9% | 43.7% | +5.2% | | | Net Profit Margin | 39.2% | 31.1% | +8.1% | | | Adjusted Net Profit Margin | 39.5% | 30.9% | +8.6% | | - During the reporting period, the Group achieved significant growth in both revenue and profit, with an increase in student enrollment, and improvements in gross margin and adjusted net profit margin[226](index=226&type=chunk)[221](index=221&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides a comprehensive review of the Group's financial performance, business operations, future strategies, and corporate governance practices for the reporting period [Financial Review](index=2&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group's revenue, gross profit, profit before tax, and adjusted net profit all achieved significant growth, primarily due to increased student enrollment and average tuition fees, while selling expenses decreased, capital expenditures reduced, and the financial position remained robust Comparison of Key Financial Indicators | Indicator | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | 548,044 | 459,465 | 88,579 | 19.3% | | Gross Profit | 322,875 | 249,786 | 73,089 | 29.3% | | Operating Profit | 268,126 | 200,588 | 67,538 | 33.7% | | Profit Before Tax | 219,570 | 155,997 | 63,573 | 40.8% | | Profit for the Period | 215,055 | 142,927 | 72,128 | 50.5% | | Adjusted Net Profit | 216,532 | 141,844 | 74,688 | 52.7% | | Gross Margin | 58.9% | 54.4% | +4.5% | | | Operating Margin | 48.9% | 43.7% | +5.2% | | - Selling expenses decreased by **33.7% to RMB 6.3 million**, primarily due to changes in marketing strategy and reduced promotional expenses for the 2022/2023 academic year[224](index=224&type=chunk) - Capital expenditure decreased by **41.7% to RMB 296.7 million**, mainly due to reduced construction costs for new school campuses[35](index=35&type=chunk) - The debt ratio (borrowings as a percentage of total assets) was **37.0%**, a slight increase from **36.7%** as of August 31, 2022, but the Group maintains sufficient liquidity to meet daily management and capital expenditure needs[236](index=236&type=chunk)[10](index=10&type=chunk) [Business Overview](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A6%BD) As a leading private higher and vocational education group in South China, the Group operates three schools with a total student enrollment of 54,109, an 11.6% year-on-year increase, with tuition and boarding fee revenue growing significantly, school utilization rates remaining high, and multiple industry awards and recognitions received - The Group operates three schools: Huali College (undergraduate), Huali Vocational College (junior college), and Huali Technician College (technical school), offering application-science-focused, practice-oriented curricula[13](index=13&type=chunk)[239](index=239&type=chunk) Comparison of Enrolled Students | School | Feb 28, 2023 | Feb 28, 2022 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Huali College | 21,615 | 17,662 | 3,953 | 22.4% | | Huali Vocational College | 21,582 | 19,343 | 2,239 | 11.6% | | Huali Technician College | 10,912 | 11,463 | (551) | (4.8%) | | **Total** | **54,109** | **48,468** | **5,641** | **11.6%** | Comparison of Tuition and Boarding Fee Revenue | Revenue Type | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Tuition Fees | 509,476 | 423,307 | 86,169 | 20.4% | | Boarding Fees | 38,568 | 36,158 | 2,410 | 6.7% | | **Total Revenue** | **548,044** | **459,465** | **88,579** | **19.3%** | - School utilization rate at Zengcheng campus increased from **82.1% to 92.1%**, and at Jiangmen campus significantly increased from **23.4% to 91.1%**, indicating improved utilization of educational capacity[273](index=273&type=chunk) [Future Outlook](index=13&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group will leverage the advantages of the Guangdong-Hong Kong-Macao Greater Bay Area, focus on high-quality academic vocational education, enhance educational capacity through campus expansion, and develop asset-light non-academic vocational education businesses for diversified and sustainable growth - The Group will fully leverage its geographical advantages in the Guangdong-Hong Kong-Macao Greater Bay Area, steadfastly pursuing a high-quality and high-level academic vocational education development path[73](index=73&type=chunk) - Expand educational capacity through campus expansion to support future student enrollment growth and business diversification[73](index=73&type=chunk) - Vigorously develop the second curve of vocational education business, focusing on an asset-light model and diversifying non-academic vocational education offerings[73](index=73&type=chunk) [Significant Events After Reporting Period](index=13&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E9%96%93%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) No significant events affecting the Company or its subsidiaries occurred after the reporting period and up to the date of this announcement - No significant events affecting the Company or any of its subsidiaries occurred after the reporting period and up to the date of this announcement[74](index=74&type=chunk) [Employees and Remuneration Policy](index=13&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group strictly adheres to labor laws and regulations, prohibits discrimination, and ensures equal employment opportunities, recruiting high-quality teachers, providing continuous training, and offering a remuneration policy based on industry characteristics and market factors, along with social insurance and benefits - As of February 28, 2023, the Group had **2,189 employees**, an increase from **2,065** as of February 28, 2022[78](index=78&type=chunk) - The remuneration policy is formulated under the guidance of Chinese law, based on industry characteristics and market factors, and provides employees with social insurance schemes and various benefits[59](index=59&type=chunk) - The Group actively recruits high-quality teachers with profound theoretical and practical knowledge and relevant industry work experience, and provides continuous training[58](index=58&type=chunk)[77](index=77&type=chunk) [Interim Dividend](index=14&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board resolved not to declare any dividend for the reporting period - The Board resolved not to declare any dividend for the reporting period (six months ended February 28, 2022: nil)[60](index=60&type=chunk)[79](index=79&type=chunk) [Corporate Governance Practices](index=15&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Company complies with the Corporate Governance Code, but the Chairman and Chief Executive Officer roles are held by the same person, an arrangement the Board believes provides strong and consistent leadership, enhancing decision-making efficiency - The Company has complied with all code provisions of the Corporate Governance Code, except for Mr. Zhang Zhifeng holding both the Chairman and Chief Executive Officer positions[81](index=81&type=chunk)[61](index=61&type=chunk) - The Board believes that Mr. Zhang Zhifeng serving concurrently as Chairman of the Board and Chief Executive Officer provides strong and consistent leadership for the Group, enhancing decision-making and execution efficiency[61](index=61&type=chunk) [Standard Code for Securities Transactions](index=15&type=section&id=%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted the Standard Code as a code of conduct for securities transactions by directors and relevant employees, and confirmed compliance with it during the reporting period - The Company has adopted the Standard Code as the Group's code of conduct to regulate securities transactions by directors and relevant employees of the Group[82](index=82&type=chunk) - Following specific inquiries, all Directors confirmed full compliance with the required standards set out in the Standard Code throughout the reporting period[82](index=82&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=15&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the six months ended February 28, 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[83](index=83&type=chunk) [Audit Committee and Review of Unaudited Condensed Consolidated Financial Information](index=16&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%8F%8A%E5%AF%A9%E9%96%B1%E6%9C%AA%E7%B6%93%E5%AF%A9%E8%A8%88%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended February 28, 2023, including accounting principles and practices - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended February 28, 2023[101](index=101&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=16&type=section&id=%E5%88%8A%E8%BC%89%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the HKEX website and the Company's website, and the interim report will be dispatched to shareholders and published on the same websites in due course - This interim results announcement has been published on the HKEX website and the Company's website, and the interim report will be dispatched to shareholders and published on the same websites in due course[102](index=102&type=chunk) [Interim Condensed Consolidated Financial Statements](index=17&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's interim condensed consolidated statement of comprehensive income and statement of financial position, detailing financial performance and asset-liability structure [Interim Condensed Consolidated Statement of Comprehensive Income](index=17&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended February 28, 2023, the Group's revenue grew by 19.3% to RMB 548,044 thousand, profit for the period increased by 50.5% to RMB 215,055 thousand, and basic earnings per share were RMB 0.179 Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 548,044 | 459,465 | | Cost of Sales | (225,169) | (209,679) | | Gross Profit | 322,875 | 249,786 | | Selling Expenses | (6,295) | (9,527) | | Administrative Expenses | (65,741) | (57,546) | | Other Income | 16,990 | 14,402 | | Net Other Gains | 297 | 3,473 | | Operating Profit | 268,126 | 200,588 | | Finance Income | 3,637 | 3,092 | | Finance Expenses | (52,193) | (47,683) | | Net Finance Expenses | (48,556) | (44,591) | | Profit Before Income Tax | 219,570 | 155,997 | | Income Tax Expense | (4,515) | (13,070) | | Profit for the Period | 215,055 | 142,927 | | Total Comprehensive Income for the Period | 215,055 | 143,461 | | Profit Attributable to Owners of the Company | 215,055 | 143,461 | | Basic and Diluted Earnings Per Share (RMB) | 0.179 | 0.120 | [Interim Condensed Consolidated Statement of Financial Position](index=19&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of February 28, 2023, the Group's total assets were RMB 6,679,120 thousand, total liabilities were RMB 3,567,450 thousand, and total equity was RMB 3,111,670 thousand, with property, plant and equipment within non-current assets increasing, while cash and cash equivalents decreased Interim Condensed Consolidated Statement of Financial Position | Indicator | Feb 28, 2023 (RMB thousands) | Aug 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 6,058,458 | 5,817,694 | | - Property, plant and equipment | 4,411,979 | 4,152,634 | | Current assets | 620,662 | 850,855 | | - Cash and cash equivalents | 538,352 | 803,845 | | **Total Assets** | **6,679,120** | **6,668,549** | | **Equity** | | | | Total Equity | 3,111,670 | 2,896,615 | | **Liabilities** | | | | Non-current liabilities | 2,275,477 | 2,400,487 | | Current liabilities | 1,291,973 | 1,371,447 | | **Total Liabilities** | **3,567,450** | **3,771,934** | | **Total Equity and Liabilities** | **6,679,120** | **6,668,549** | - Property, plant and equipment amounted to approximately **RMB 4,412.0 million**, an increase of approximately **10.1%** compared to February 28, 2022[8](index=8&type=chunk) - Bank balances and cash amounted to approximately **RMB 538.4 million**, a decrease of approximately **3.4%** compared to February 28, 2022[9](index=9&type=chunk) - As of February 28, 2023, the Group's current liabilities exceeded its current assets by **RMB 671,311 thousand**, but the Directors believe the Group has sufficient financial resources to meet future obligations[127](index=127&type=chunk)[128](index=128&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes on the Group's accounting policies, financial risk management, segment information, and specific financial statement line items for the interim period [1 General Information](index=21&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) China Vocational Education Holdings Limited, incorporated in the Cayman Islands, primarily provides private higher education services in China, with its shares listed on the Main Board of the Hong Kong Stock Exchange, and the COVID-19 pandemic has not had a significant adverse impact on the Group's financial position or operating results - The Company is incorporated in the Cayman Islands and primarily provides private higher education services in China[94](index=94&type=chunk) - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since November 25, 2019[110](index=110&type=chunk) - The COVID-19 pandemic has not had any significant adverse impact on the Group's financial position or operating results[126](index=126&type=chunk) [2 Basis of Preparation](index=21&type=section&id=2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the HKICPA, and on a going concern basis, as the Directors believe the Group has sufficient financial resources to meet future obligations - This interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[96](index=96&type=chunk) - The Directors believe that the Group will have sufficient financial resources to meet its financial obligations falling due within the next twelve months from February 28, 2023, and thus it is prepared on a going concern basis[128](index=128&type=chunk) [3 Accounting Policies](index=22&type=section&id=3%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The accounting policies applied are consistent with those of the previous financial year and the corresponding interim reporting period, with certain new and amended standards applied for the first time, which are not expected to have a significant impact on the financial statements - The accounting policies applied are consistent with those of the previous financial year and the corresponding interim reporting period, except for the income tax estimate disclosed in Note 11[98](index=98&type=chunk) - The Group has applied certain new and amended standards for the first time for the annual reporting period beginning September 1, 2022, which are not expected to have a significant impact on the current or future periods[114](index=114&type=chunk)[130](index=130&type=chunk) [4 Estimates and Assumptions](index=23&type=section&id=4%20%E4%BC%B0%E8%A8%88%E5%8F%8A%E5%81%87%E8%A8%AD) The management judgments, estimates, and assumptions made in preparing this interim financial information are the same as those applied in the 2022 financial statements - In preparing this interim financial information, management has made significant judgments in applying the Group's accounting policies and key sources of estimation. Estimates and assumptions are the same as those applied in the 2022 financial statements[116](index=116&type=chunk)[131](index=131&type=chunk) [5 Financial Risk Management](index=24&type=section&id=5%20%E9%87%91%E8%9E%8D%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group faces market risks (foreign exchange, interest rate) and liquidity risk, with no changes in risk management policies during the reporting period, and manages liquidity through internal cash flows and bank borrowings, while estimating fair values for financial instruments - The Group's activities are exposed to various financial risks: market risk (including foreign exchange risk, cash flow interest rate risk, and fair value interest rate risk) and liquidity risk[117](index=117&type=chunk) - There were no changes in any risk management policies during the six months ended February 28, 2023[134](index=134&type=chunk) [5.1 Financial Risk Factors](index=24&type=section&id=5.1%20%E9%87%91%E8%9E%8D%E9%A2%A8%E9%9A%AA%E5%9B%A0%E7%B4%A0) This interim financial information does not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the 2022 financial statements - This interim financial information does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the 2022 financial statements[151](index=151&type=chunk) [5.2 Liquidity Risk](index=24&type=section&id=5.2%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E9%A2%A8%E9%9A%AA) The Group monitors and maintains levels of cash and cash equivalents that management deems sufficient for working capital and to mitigate the impact of cash flow fluctuations - The Group monitors and maintains levels of cash and cash equivalents that management considers adequate for the Group's working capital and to mitigate the effects of fluctuations in cash flows[152](index=152&type=chunk) Maturity Analysis of Non-derivative Financial Liabilities (February 28, 2023) | | Less than 1 year (RMB thousands) | 1 to 2 years (RMB thousands) | 2 to 5 years (RMB thousands) | More than 5 years (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Borrowings (principal plus interest) | 414,207 | 482,488 | 1,284,041 | 802,465 | 2,983,201 | | Accrued expenses and other payables (excluding non-financial liabilities) | 344,850 | 62,180 | – | – | 407,030 | | Amounts due to related parties | 69,574 | – | – | – | 69,574 | | **Total** | **828,631** | **544,668** | **1,284,041** | **802,465** | **3,459,805** | [5.3 Fair Value Estimation](index=25&type=section&id=5.3%20%E5%85%AC%E5%B9%B3%E5%80%BC%E4%BC%B0%E8%A8%88) Due to the short-term nature of the Group's financial assets and liabilities, their carrying amounts approximate their fair values, and fair values of non-current borrowings are estimated using discounted cash flow methods - Due to the short-term nature of the Group's financial assets and financial liabilities, their carrying amounts approximate their fair values[138](index=138&type=chunk) - The fair value of non-current borrowings is estimated using the discounted cash flow method, based on market interest rates for financial instruments with substantially similar terms and characteristics available to the Group at the respective reporting date[138](index=138&type=chunk) [6 Segment Information](index=26&type=section&id=6%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group primarily provides private higher education and related services in China, with all revenue derived from mainland China, and while each school constitutes an operating segment, their segment information is aggregated into a single reportable segment due to similar services, customer types, and regulatory environments - The Group primarily provides private higher education and related services in China, with all revenue derived from businesses in mainland China and from customers in mainland China[123](index=123&type=chunk)[124](index=124&type=chunk) - Each school constitutes an operating segment, but due to the similarity of services provided, customer types, and regulatory environment, their segment information is aggregated into a single reportable segment[139](index=139&type=chunk) [7 Other Income](index=27&type=section&id=7%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) During the reporting period, other income increased by 18.1% to RMB 17.0 million, primarily due to increases in service income, rental income, and government grants Composition of Other Income | Item | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | | :--- | :--- | :--- | | Service income | 8,414 | 5,807 | | Rental income | 5,562 | 5,391 | | Government grants | 1,681 | 435 | | Book sales income | 1,333 | 2,769 | | **Total** | **16,990** | **14,402** | - Other income was approximately **RMB 17.0 million**, an increase of approximately **18.1%** compared to approximately **RMB 14.4 million** in the same period last year[225](index=225&type=chunk) - Government grants significantly increased from **RMB 435 thousand to RMB 1,681 thousand**[142](index=142&type=chunk) [8 Net Other Gains](index=27&type=section&id=8%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) During the reporting period, net other gains significantly decreased to RMB 0.3 million, primarily due to higher net exchange gains in the same period last year Composition of Net Other Gains | Item | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains on investment properties | 100 | – | | Gains/(losses) on disposal of property, plant and equipment | 44 | (447) | | Net exchange gains | 27 | 3,404 | | Others | 126 | 516 | | **Total** | **297** | **3,473** | - The Group recorded other gains of approximately **RMB 0.3 million**, a decrease of approximately **RMB 3.2 million** compared to approximately **RMB 3.5 million** in the same period last year, mainly due to a decrease in net exchange gains[5](index=5&type=chunk) [9 Expenses by Nature](index=28&type=section&id=9%20%E6%8C%89%E6%80%A7%E8%B3%AA%E5%8A%83%E5%88%86%E7%9A%84%E9%96%8B%E6%94%AF) During the reporting period, total cost of sales, selling expenses, and administrative expenses amounted to RMB 297,205 thousand, an increase of 7.4% year-on-year, with employee benefit expenses and depreciation of property, plant and equipment significantly increasing, while student status management fees and promotional expenses decreased Comparison of Expenses by Nature | Item | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | | :--- | :--- | :--- | | Employee benefit expenses | 120,376 | 98,546 | | Depreciation of property, plant and equipment | 67,321 | 55,909 | | Student status management fees | 17,861 | 30,746 | | Depreciation of right-of-use assets | 16,811 | 17,160 | | Property management fees | 15,321 | 14,016 | | Promotional expenses | 3,563 | 7,102 | | **Total cost of sales, selling and administrative expenses** | **297,205** | **276,752** | - Employee benefit expenses increased to **RMB 120.4 million**, reflecting higher personnel costs[143](index=143&type=chunk) - Student status management fees decreased to **RMB 17.9 million**, primarily related to the Huali College conversion agreement[143](index=143&type=chunk) [10 Net Finance Expenses](index=29&type=section&id=10%20%E8%B2%A1%E5%8B%99%E9%96%8B%E6%94%AF%E6%B7%A8%E9%A1%8D) During the reporting period, net finance expenses increased to RMB 48,556 thousand, primarily due to higher interest expenses on bank borrowings, partially offset by a decrease in capitalized interest expenses Composition of Net Finance Expenses | Item | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | | :--- | :--- | :--- | | Bank interest income | 3,637 | 3,092 | | Interest expenses on bank borrowings | (48,710) | (47,637) | | Interest expenses on other borrowings from related parties | (9,178) | (8,625) | | Less: Interest expenses capitalized on property, plant and equipment | 8,822 | 17,344 | | **Net finance expenses** | **(48,556)** | **(44,591)** | - The Group recorded finance expenses of approximately **RMB 52.2 million**, an increase of approximately **9.4%** compared to approximately **RMB 47.7 million** in the same period last year[32](index=32&type=chunk) - Interest expenses capitalized on property, plant and equipment decreased from **RMB 17,344 thousand to RMB 8,822 thousand** in the same period last year[159](index=159&type=chunk) [11 Income Tax Expense](index=29&type=section&id=11%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for the reporting period significantly decreased by 65.6% to RMB 4,515 thousand, primarily due to China's corporate income tax preferential policies and management's estimate of the annual tax rate - The Group recorded tax expenses of approximately **RMB 4.5 million**, a decrease of approximately **65.6%** compared to approximately **RMB 13.1 million** in the same period last year[33](index=33&type=chunk) [(a) Cayman Islands Profits Tax](index=29&type=section&id=%28a%29%20%E9%96%8B%E6%9B%BC%E7%BE%A4%E5%B3%B6%E5%88%A9%E5%BE%97%E7%A8%85) The Company and its direct subsidiaries, incorporated as exempted limited liability companies in the Cayman Islands, are exempt from income tax - The Company and its direct subsidiaries are incorporated as exempted limited liability companies in the Cayman Islands and are therefore exempt from income tax[160](index=160&type=chunk) [(b) Hong Kong Profits Tax](index=29&type=section&id=%28b%29%20%E9%A6%99%E6%B8%AF%E5%88%A9%E5%BE%97%E7%A8%85) No provision for Hong Kong profits tax was made as the Group recorded no assessable profits in Hong Kong during the reporting period - No provision for Hong Kong profits tax has been made as the Group recorded no assessable profits in Hong Kong during the reporting period[147](index=147&type=chunk) [(c) China Corporate Income Tax](index=30&type=section&id=%28c%29%20%E4%B8%AD%E5%9C%8B%E4%BC%81%E6%A5%AD%E6%89%80%E5%BE%97%E7%A8%85) The corporate income tax rate for the Group's entities in mainland China is 25%, with certain wholly-owned subsidiaries registered in ethnic minority autonomous regions enjoying a preferential rate of 15%, and management believes income from academic education services is exempt from corporate income tax - The corporate income tax rate applicable to the Group's entities in mainland China ('China Entities') is **25%**[162](index=162&type=chunk) - Certain wholly-owned subsidiaries of the Group registered in ethnic minority autonomous regions in China enjoy a preferential corporate income tax rate of **15%**[149](index=149&type=chunk) - Management believes that, in accordance with relevant Chinese tax regulations, local tax authorities will not levy corporate income tax on income derived from providing academic education services[174](index=174&type=chunk) [(d) United States of America ('US') Corporate Income Tax](index=30&type=section&id=%28d%29%20%E7%BE%8E%E5%88%A9%E5%A0%85%E5%90%88%E8%A1%86%E5%9C%8B%EF%BC%88%E3%80%8C%E7%BE%8E%E5%9C%8B%E3%80%8D%EF%BC%89%E4%BC%81%E6%A5%AD%E6%89%80%E5%BE%97%E7%A8%85) No provision for US corporate income tax was made as the Group recorded no assessable profits in the US during the reporting period - No provision for US corporate income tax has been made as the Group recorded no assessable profits in the US during the reporting period[175](index=175&type=chunk) [(e) Income tax expense is recognized based on management's estimate of the weighted average actual annual income tax rate for the full financial year](index=31&type=section&id=%28e%29%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF%E6%A0%B9%E6%93%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E5%B0%8D%E5%AE%8C%E6%95%B4%E8%B2%A1%E6%94%BF%E5%B9%B4%E5%BA%A6%E7%9A%84%E9%A0%90%E6%9C%9F%E5%8A%A0%E6%AC%8A%E5%B9%B3%E5%9D%87%E5%AF%A6%E9%9A%9B%E5%B9%B4%E5%BA%A6%E6%89%80%E5%BE%97%E7%A8%85%E7%8E%87%E7%9A%84%E4%BC%B0%E8%A8%88%E8%80%8C%E7%A2%BA%E8%AA%8D%E3%80%82) The estimated average annual tax rate used for the six months ended February 28, 2023, was 1.7%, a significant decrease from 7.2% for the six months ended February 28, 2022 - The estimated average annual tax rate used for the six months ended February 28, 2023, was **1.7%**, a significant decrease from **7.2%** for the six months ended February 28, 2022[177](index=177&type=chunk) Analysis of Income Tax Expense | Item | Six Months Ended Feb 28, 2023 (RMB thousands) | Six Months Ended Feb 28, 2022 (RMB thousands) | | :--- | :--- | :--- | | Current tax on profit for the period | 3,622 | 11,167 | | Deferred income tax | 114 | 7 | | Deferred withholding tax | 779 | 1,896 | | **Total** | **4,515** | **13,070** | [12 Earnings Per Share](index=32&type=section&id=12%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share for the reporting period were RMB 0.179, an increase from RMB 0.120 in the same period last year, and diluted earnings per share were the same as basic earnings per share due to the absence of potential dilutive ordinary shares [(a) Basic](index=32&type=section&id=%28a%29%20%E5%9F%BA%E6%9C%AC) Basic earnings per share are calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares outstanding - Basic earnings per share are calculated by dividing the profit attributable to owners of the Company for the six months ended February 28, 2023 and 2022 by the weighted average number of ordinary shares outstanding[166](index=166&type=chunk) Calculation of Basic Earnings Per Share | Indicator | Six Months Ended Feb 28, 2023 (Unaudited) | Six Months Ended Feb 28, 2022 (Unaudited) | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousands) | 215,055 | 143,461 | | Weighted average number of ordinary shares in issue (thousands) | 1,200,000 | 1,200,000 | | Basic earnings per share (expressed in RMB per share) | 0.179 | 0.120 | [(b) Diluted](index=32&type=section&id=%28b%29%20%E6%94%A4%E8%96%84) Diluted earnings per share are the same as basic earnings per share because there were no outstanding potential dilutive ordinary shares during the reporting period - Diluted earnings per share presented are the same as basic earnings per share because there were no outstanding potential dilutive ordinary shares during the six months ended February 28, 2023 and 2022[168](index=168&type=chunk) [13 Trade and Other Receivables](index=33&type=section&id=13%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of February 28, 2023, total trade and other receivables amounted to RMB 58,647 thousand, a significant increase from August 31, 2022, primarily driven by tuition fees receivable from students and government subsidies receivable Composition of Trade and Other Receivables | Item | Feb 28, 2023 (RMB thousands) | Aug 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 47,369 | 13,123 | | - Tuition fees receivable from students | 29,836 | 12,951 | | - Government subsidies receivable for tuition fee waivers granted to students | 17,051 | – | | Other receivables | 11,278 | 15,589 | | **Total** | **58,647** | **28,712** | - Tuition fees receivable from students increased from **RMB 12,951 thousand to RMB 29,836 thousand**, and government subsidies receivable for tuition fee waivers granted to students newly amounted to **RMB 17,051 thousand**[180](index=180&type=chunk) - Management closely monitors the credit quality and recoverability of these receivables and believes the expected credit risk is very low[172](index=172&type=chunk) [14 Accrued Expenses and Other Payables and Amounts Due to Related Parties](index=35&type=section&id=14%20%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E4%BB%A5%E5%8F%8A%E6%87%89%E4%BB%98%E9%97%9C%E8%81%AF%E6%96%B9%E6%AC%BE%E9%A0%85) As of February 28, 2023, total accrued expenses and other payables amounted to RMB 420,739 thousand, a decrease from August 31, 2022, with notable reductions in amounts payable for Huali College conversion compensation and student status management fees Composition of Accrued Expenses and Other Payables | Item | Feb 28, 2023 (RMB thousands) | Aug 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Payables for construction and purchase of non-current assets | 247,677 | 224,472 | | Amounts payable for Huali College conversion compensation | 51,678 | 103,404 | | Student status management fees payable | 42,344 | 61,207 | | Sundry fees received from students | 11,132 | 24,623 | | Government subsidies payable to students | 8,033 | 31,740 | | **Total** | **420,739** | **498,115** | - Amounts payable for Huali College conversion compensation decreased from **RMB 103,404 thousand to RMB 51,678 thousand**[183](index=183&type=chunk) - Student status management fees payable decreased from **RMB 61,207 thousand to RMB 42,344 thousand**[183](index=183&type=chunk) [15 Capital Commitments](index=36&type=section&id=15%20%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of February 28, 2023, the Group's contracted but unprovided capital commitments amounted to RMB 462,651 thousand, primarily for the construction and purchase of property, plant and equipment, a decrease from August 31, 2022 Comparison of Capital Commitments | Item | Feb 28, 2023 (RMB thousands) | Aug 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Contracted but not provided for | 462,651 | 627,237 | - Contracted but not provided for capital commitments amounted to **RMB 462,651 thousand**, a decrease of **26.3%** compared to **RMB 627,237 thousand** as of August 31, 2022[184](index=184&type=chunk) - Capital commitments are primarily for the construction and purchase of property, plant and equipment[203](index=203&type=chunk) [Definitions](index=37&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms and abbreviations used in the report, such as 'Academic Year', 'Corporate Governance Code', and 'the Group', to ensure accurate understanding of the report's content - This section provides definitions for key terms and abbreviations used in the report, such as 'Academic Year', 'Corporate Governance Code', 'the Group', etc., to ensure readers' accurate understanding of the report's content[186](index=186&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) [Other Information](index=40&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section lists the Company's executive and independent non-executive directors and clarifies that English names for Chinese entities, laws, or government departments are translations, with Chinese names prevailing in case of discrepancy - The Company's executive directors are Mr. Zhang Zhifeng, Mr. Ye Yaming, Mr. Zhang Yude, and Mr. Zou Kang; independent non-executive directors are Ms. Zhao Lijuan MH JP, Mr. Yang Ying, and Mr. Ding Yi[215](index=215&type=chunk) - The English names of the China Entities (including schools), Chinese laws or regulations, and Chinese government departments mentioned in this announcement are translations of their Chinese names, and in case of any discrepancy, the Chinese names shall prevail[214](index=214&type=chunk)

Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million, representing a Y% growth compared to the previous year[10]. - For the year ended August 31, 2022, the Group's revenue amounted to approximately RMB 907.8 million, representing an increase of approximately 3.0% from approximately RMB 881.7 million for the corresponding period last year[13]. - The Group's profit for the year was RMB 259.8 million, an increase of 81.1% compared to RMB 143.5 million in the previous year[13]. - The adjusted net profit for the year was RMB 263.8 million, a decrease of 11.8% from RMB 299.1 million in the previous year[13]. - The earnings per share increased to RMB 0.216, representing an increase of 80.0% compared to RMB 0.120 in the previous year[13]. - The gross profit margin was 53.1%, slightly down from 53.4% in the previous year[13]. - The operating profit ratio improved to 42.3%, up from 25.5% in the previous year[13]. - The net profit ratio increased to 28.6%, compared to 16.3% in the previous year[13]. - The Group's cost of sales amounted to approximately RMB 425.6 million, increased by approximately 3.5% year-on-year from approximately RMB 411.1 million for the year ended August 31, 2021[86]. - The Group recorded a gross profit of approximately RMB 482.2 million, representing an increase of approximately 2.5% year-on-year from approximately RMB 470.5 million for the year ended August 31, 2021[86]. - The Group recorded a profit before taxation of approximately RMB 278.9 million for the year ended August 31, 2022, an increase of approximately 64.4% year-on-year from approximately RMB 169.6 million for the year ended August 31, 2021[88]. - Taxation for the year ended August 31, 2022, was approximately RMB 19.2 million, representing a decrease of approximately 26.8% year-on-year from approximately RMB 26.2 million for the year ended August 31, 2021[91]. Enrollment and Education Growth - User enrollment in vocational programs reached Z, marking an increase of A% year-over-year, indicating strong demand for vocational education[10]. - The Group operated three schools, maintaining student enrolment at 47,131, an increase of 1.0% from 46,669 in the previous year[13]. - The total student enrollment across the three schools was 47,131, with Huali College having 17,622 students, Huali Vocational College 18,338 students, and Huali Technician College 11,171 students[24]. - The total student enrollment increased by 462 students, representing a 1.0% growth compared to the previous year[26]. - Huali Technician College saw a significant increase in enrollment, with 11,171 students, up by 1,631 students or 17.1% from the previous year[26]. - Huali Vocational College's enrollment decreased by 484 students, a decline of 2.6% compared to the previous year[26]. - Huali College experienced a decrease in enrollment of 685 students, representing a 3.7% decline[26]. - The revenue growth was primarily attributed to the increase in student enrollment and average tuition fees[32]. - Average tuition fees per student rose from RMB 17,428 in 2021 to RMB 17,748 in 2022, reflecting an increase of 1.8%[38]. Strategic Initiatives and Future Plans - The company has set a future revenue guidance of $B million for the next fiscal year, reflecting a C% increase from the current year[10]. - New product offerings in the vocational training sector are expected to launch in Q1 2023, aimed at enhancing the learning experience and expanding market reach[10]. - The company is actively pursuing market expansion strategies, targeting D new regions in China to increase its footprint in the vocational education sector[10]. - The Group plans to expand its school network in China and abroad to increase student enrolment[16]. - The Group aims to improve profitability by optimizing pricing and sources of revenue[16]. - The Group plans to enhance its position in private higher education by implementing demand-driven construction of existing schools and new campuses, aiming to expand student enrollment capacity by over 5,000 students at Huali College[68]. - The new Jiangmen Yamen campus of Huali Technician College is under construction with a total planned area of approximately 253,300 sq. m, expected to accommodate over 20,000 students and to be operational by September 2023[68]. - The Group is actively expanding its vocational education and training business, which is expected to become a new revenue growth point, with considerable revenue growth anticipated in the future[68]. Awards and Recognition - The company received multiple awards during the reporting period, including the "Investment and Financing Mode Innovation Practice Award" from Shanghai People's Radio[52]. - Huali Vocational College was recognized for its "University Students Love Anchor Volunteer Service Team" by the Guangzhou Zengcheng District Live E-commerce Association[52]. - Huali Technician College won the "Outstanding Organization Award" at the "A Century of Greater Bay Area" Skills + New Media Innovation Competition[54]. - Huali College received the "Second Prize of Undergraduate Group" in the Guangdong University New Media Influence competition[54]. - The company achieved recognition in the Guangdong Private University Party's History Knowledge Contest, receiving multiple awards including "Outstanding Organization Award" and "Second Prize of Undergraduate Group"[56]. - Huali Technician College was awarded the "Outstanding Organization Award" in the Guangdong Vocational Skills Contest Advertising Design Competition[56]. - The company continues to focus on enhancing educational quality and operational achievements, as evidenced by the numerous awards received during the reporting period[51]. Governance and Management - The company has a board consisting of seven directors, including four executive directors and three independent non-executive directors[108]. - The board's composition reflects a balance of executive and independent oversight, ensuring effective governance[108]. - The management team is focused on strategic development and operational efficiency to drive growth in the vocational education market[113]. - The company is committed to leveraging its leadership's expertise to navigate the evolving educational landscape in China[111]. - The management team includes professionals with extensive backgrounds in finance and education, contributing to strategic decision-making[126]. - The company is actively expanding its governance structure with independent directors to enhance corporate oversight[121]. Compliance and Regulatory Environment - The Group's compliance with relevant laws and regulations is outlined, highlighting significant impacts on operations[154]. - The Implementation Rules for the Law for Promoting Private Education of the PRC will not have any impact on the Group's expansion strategy through acquisition[82]. - The Group intends to register its three schools as for-profit private schools based on the current regulatory environment[82]. - There are uncertainties regarding the interpretation and application of the Amendment affecting various aspects of private school operations[86]. - The Group's recent developments include compliance with the Law for Promoting Private Education of the PRC, which allows for the establishment of both non-profit and for-profit private schools[71]. Shareholder Information - As of August 31, 2022, the total number of issued shares was 1,200,000,000 shares[170]. - Mr. Zhang Zhifeng and Mr. Zhang Yude each hold 900,000,000 shares, representing a 75.0% shareholding in the company[168]. - The Board has resolved not to declare any final dividend for the year ended August 31, 2022, compared to a final dividend of HK$0.0502 per share for the year ended August 31, 2021, amounting to HK$60,240,000[159]. - The Company has adopted a dividend policy to distribute no less than 30% of the distributable net profit attributable to shareholders[159]. - The Group faces concentration risks as all schools are located in Guangdong Province[159]. - The dividend policy will continue to be reviewed periodically, with no assurance that dividends will be declared in any specific period[159].

Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million for the interim period, representing a Y% growth compared to the previous year[9]. - Revenue increased by RMB14.1 million, or 3.2%, from RMB445.4 million for the six months ended February 28, 2021, to RMB459.5 million for the six months ended February 28, 2022[12]. - Profit for the period was RMB142.9 million, an increase of RMB3.3 million or 2.4% compared to RMB139.6 million for the same period last year[12]. - Adjusted net profit decreased by RMB14.4 million, or 9.2%, from RMB156.2 million for the six months ended February 28, 2021, to RMB141.8 million for the six months ended February 28, 2022[12]. - Gross profit increased by RMB10.4 million, or 4.4%, from RMB239.4 million for the six months ended February 28, 2021, to RMB249.8 million for the six months ended February 28, 2022[12]. - Total comprehensive income for the six months ended February 28, 2022, was RMB 143,461,000, an increase of 2.0% compared to RMB 139,583,000 for the same period in 2021[129]. - Earnings per share attributable to the owner of the Company for the period was RMB 0.120, up from RMB 0.116 in the previous year, reflecting a growth of 3.4%[129]. Enrollment and Market Expansion - User data showed an increase in enrollment numbers, with a total of Z students enrolled, reflecting a growth of A% year-over-year[9]. - The number of students at Huali Technician College increased from 9,857 in the 2020/2021 school year to 11,463 in the 2021/2022 school year[12]. - As of February 28, 2022, the total student enrollment across the three schools was 48,468, with 17,662 at Huali College, 19,343 at Huali Vocational College, and 11,463 at Huali Technician College[30]. - The Group plans to enhance student enrollment through demand-driven investments in existing schools and improving educational quality[58]. - The company is expanding its market presence, targeting D new regions for educational services in the upcoming fiscal year[9]. Cost Management and Operational Efficiency - The company aims to improve operational efficiency, targeting a reduction in costs by F% through streamlined processes and resource allocation[9]. - Selling expenses decreased by RMB10.4 million, or 52.3%, from RMB20.0 million to RMB9.5 million, attributed to changes in marketing strategies[15]. - Administrative expenses increased by RMB10.7 million, or 22.8%, from RMB46.9 million to RMB57.6 million, primarily due to higher administrative staff costs and other expenses[15]. - Cost of sales increased by RMB3.7 million, or 1.8%, from RMB206.0 million for the six months ended February 28, 2021, to RMB209.7 million for the six months ended February 28, 2022[12]. Strategic Initiatives and Future Outlook - The company provided an optimistic outlook for the next quarter, projecting revenue growth of B% based on current market trends and user engagement[9]. - New product development initiatives are underway, with the launch of C new courses aimed at enhancing vocational training offerings[9]. - Strategic acquisitions are being considered to enhance the company's educational portfolio and market reach[9]. - The Group has identified M&A targets in economically developed regions of China to expand its school network, focusing on private colleges with growth potential[61]. Financial Position and Capital Management - As of February 28, 2022, the Group had cash and cash equivalents of RMB 557.6 million and total borrowings of RMB 2,550.4 million, with RMB 1,972.1 million repayable within five years[25]. - The Group's debt ratio as of February 28, 2022, was 40.0%, an increase from 36.7% as of August 31, 2021[25]. - The Group's capital expenditures for the six months ended February 28, 2022, were RMB 509.2 million, primarily related to the establishment of new school premises and upgrading existing facilities[25]. - The Group had unused long-term banking facilities totaling RMB 829,616,000 as of February 28, 2022, which management believes are adequate for capital expenditure and working capital purposes[149]. Governance and Corporate Practices - The company has complied with all corporate governance code provisions except for the separation of the roles of chairman and chief executive officer, which are held by Mr. Zhang Zhifeng[82]. - The company is committed to enhancing its corporate governance practices to align with statutory and professional standards[82]. - The company has three independent non-executive directors on the board to ensure a balance of power and authority[82]. - The company actively recruits high-quality teachers with relevant industry experience and provides ongoing training to adapt to market changes[77]. Taxation and Compliance - The Group's entities in Mainland China are subject to a corporate income tax rate of 25%[192]. - No income tax expense was recognized for the income from the provision of educational services in respect of the PRC Operating Entities during the period[192]. - The Group's income tax expenses analysis shows a total of RMB 13,070,000 for the six months ended February 28, 2022, compared to RMB 11,810,000 for the same period in 2021[200].

Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million, representing a Y% growth compared to the previous year[10]. - Revenue for the year ended August 31, 2021, was RMB 881.7 million, an increase of RMB 120.2 million or 15.8% from RMB 761.5 million in the previous year[18]. - Gross profit for the year was RMB 470.5 million, reflecting a growth of 4.0% from RMB 452.6 million[18]. - Profit for the year decreased to RMB 143.5 million, a decline of 53.2% from RMB 306.7 million in the previous year[18]. - Adjusted net profit was RMB 299.1 million, down 11.4% from RMB 337.7 million[18]. - Earnings per share decreased to RMB 0.120, a decline of 55.8% from RMB 0.270[18]. - The gross profit ratio decreased to 53.4%, down from 59.4%[18]. - The operating profit ratio fell to 25.5%, a decrease of 21.0 percentage points from the previous year[18]. - For the year ended August 31, 2021, the Group's revenue was approximately RMB 881.7 million, representing an increase of approximately 15.8% year-on-year from approximately RMB 761.5 million[101]. - The Group's cost of sales amounted to approximately RMB 411.1 million, increased by approximately 33.1% year-on-year from approximately RMB 308.9 million for the year ended August 31, 2020[101]. - The Group recorded a gross profit of approximately RMB 470.5 million, representing an increase of approximately 4.0% year-on-year from approximately RMB 452.6 million for the year ended August 31, 2020[101]. - The gross profit margin for the year ended August 31, 2021, was 53.4%, down by 6.0 percentage points year-on-year compared to the previous period[101]. - The increase in revenue was attributed to increases in both student enrollment and average tuition fees during the reporting period[101]. Student Enrollment and Education Expansion - User data showed an increase in active users, reaching Z million, which is an A% increase year-over-year[10]. - The number of student enrollments increased to 46,669, representing a growth of 7.7% compared to the previous academic year[18]. - The company plans to expand its school network in China and abroad to increase student enrollment[24]. - As of August 31, 2021, Huali University Group had a total enrollment of 46,669 students across its three schools[30]. - Huali College enrolled 18,307 students, up 3.1% from 17,765 in the prior year[40]. - Huali Vocational College saw an enrollment of 18,822 students, marking a 7.1% increase from 17,581[40]. - Huali Technician College had 9,540 students, with a notable increase of 19.7% from the previous year[40]. - The company plans to expand its school operations in response to the rising higher education enrollment rate, projected to reach 60.0% by 2025[36]. - The establishment of a new junior college is planned to provide higher education and vocational education in Jiangmen City, Guangdong Province[36]. - The Group plans to develop new campuses, including a new campus in Jiangmen Binhai expected to accommodate 25,000 students, with the first phase completed in September 2021 for 4,000 students[82]. - The new campus of Huali Technician College in Jiangmen City is under construction, with a first phase capacity of 6,000 students expected to be completed by August 2022[82]. - The Group is focusing on endogenous growth by improving existing school facilities and enhancing education quality to increase student enrollment[82]. Financial Outlook and Guidance - The company provided guidance for the next fiscal year, projecting revenue growth of B% and an expected total revenue of $C million[10]. - The financial outlook remains positive, with a commitment to sustainable growth and shareholder value[10]. - The Group's financial performance and future expansion plans will influence dividend payments[170]. - The Group's annual report includes a fair review of business performance and future outlook[167]. Operational Efficiency and Cost Management - The company has implemented new strategies to enhance operational efficiency, targeting a reduction in costs by H%[10]. - Selling expenses increased by approximately 68.4% from approximately RMB15.5 million for the year ended August 31, 2020, to approximately RMB26.1 million for the year ended August 31, 2021[103]. - Administrative expenses increased by approximately 4.1%, from RMB99.1 million for the year ended August 31, 2020, to approximately RMB103.2 million for the year ended August 31, 2021[103]. - Other income increased by approximately 79.1% year-on-year, from approximately RMB19.6 million for the year ended August 31, 2020, to approximately RMB35.1 million for the year ended August 31, 2021[103]. - Other losses amounted to approximately RMB151.9 million for the year ended August 31, 2021, representing an increase of approximately 45.0 times year-on-year compared to approximately RMB3.3 million for the year ended August 31, 2020[103]. - Finance expenses recorded were approximately RMB63.5 million for the year ended August 31, 2021[103]. Governance and Management - The company has a strong governance structure with independent directors overseeing compliance and corporate governance matters[143]. - The management team includes experienced professionals with backgrounds in finance and education, enhancing the company's operational capabilities[149]. - The company is committed to maintaining high standards of corporate governance and compliance through its board and committee structures[145]. - Mr. Ye Yaming served as the CEO from December 18, 2017, until November 19, 2021, and was responsible for the overall operation and management of the Group[125]. - Mr. Zhang Yude was appointed as the COO on November 19, 2021, focusing on vocational education and training business[130]. - The Group has a strong emphasis on vocational education, with management experienced in both education and training sectors[130]. Environmental and Social Responsibility - The company emphasized its focus on environmental, social, and governance (ESG) initiatives, aiming for a more sustainable business model[10]. - The Group's environmental policies and performance are addressed in the "Environmental, Social and Governance Report" section[162]. Dividend Policy - The Board has adopted a dividend policy to distribute no less than 30% of distributable net profit to shareholders[170]. - A final dividend of HK$0.0502 per ordinary share is recommended for the year ended August 31, 2021, subject to shareholder approval[170]. - The proposed final dividend is subject to shareholder approval at the upcoming AGM[174].

华 立 大 学 集 团 有 限 公 司 Huali University Group Limited (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號：1756 Interim Report 中期報告 Contents 目錄 02 | --- | --- | --- | --- | |-------------------------------------------------------------------------|-------|--------------------------------------------------------------------------------------------|-------| | | | | | | Corporate Information 公司資料 | | Interim Condensed Consolidated Balance Sheet 中期簡明綜合資產負債表 | | | Financial H ...

2020 Annual Report 年度報告 华 立 大 学 集 团 有 限 公 司 Huali University Group Limited (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號：1756 Contents 目錄 | --- | --- | --- | |-------------------------------------------------------------------|-------|------------------------------------------------------------------| | Corporate Information 公司資料 | 02 | Independent Auditor's Report 獨立核數師報告 | | | | | | Financial Highlights 財務摘要 | 05 | Consolidated Statement of Comprehensive Inco ...