SCHOLAR EDU(01769)

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思考乐教育20240630
-· 2024-07-01 01:10
这期的培训啊 包括其他的一些相关的活动呢也会逐渐的开展那我们也是看到公司作为这个华南的领先教培品牌呢一直也都有比较好的一个需求的增长包括扩张这块呢也在稳步的进行中那所以近期呢我们也是请到再次请到苏总来为大家做一个更新那首先呢我就先把时间交给苏总呢请苏总再为我们简单的 更新一下情况然后后续呢我们会在开放这个问答环节也欢迎大家提问苏总好的好的大家早上好我是许家集团的CFO苏伟恒非常感谢大家今天参加这个教育会也感谢天峰把我们主题一个很好的一个跟大家博众这个教育的一个机会 首先我跟大家简单介绍一下我们公司的一些最新情况第一就是我们公司今年有35家的经销区可以在深圳成立就是开业了我们去年年底在深圳里面有110家的学校今年15家已经增加到145家 所以现在我们基本上所有的一些区里面都可以找到我们的分项包括一些较偏的一些专卖地区包括一些新区等等基本上我们可以说是全覆盖第一第二就是我们今年也会开始收费有些提加的情况因为我们目前的收费基本上是跟21年是一样的就是21年 包括2023年24年上半年基本上也是没有改变的今年暑假开始我们的那个K九包括高中我们的一些政策课程都可以提五个点这样子然后我们之后吧也是按大概每年提早五个点的节 ...
思考乐教育20240628
2024-06-30 12:12
这期的培训啊 包括其他的一些相关的活动呢也会逐渐的开展那我们也是看到公司作为这个华南的领先教培品牌呢一直也都有比较好的一个需求的增长包括扩张这块呢也在稳步的进行中那所以近期呢我们也是请到再次请到苏总来为大家做一个更新那首先呢我就先把时间交给苏总呢请苏总再为我们简单的 更新一下情况然后后续呢我们会在开放这个问答环节也欢迎大家提问苏总好的好的大家早上好我是许家集团的CFO苏伟恒非常感谢大家今天参加这个教育会也感谢天峰把我们主题一个很好的一个跟大家博众这个教育的一个机会 首先我跟大家简单介绍一下我们公司的一些最新情况第一就是我们公司今年有35家的经销区可以在深圳成立就是开业了我们去年年底在深圳里面有110家的学校今年15家已经增加到145家 所以现在我们基本上所有的一些区里面都可以找到我们的分项包括一些较偏的一些专卖地区包括一些新区等等基本上我们可以说是全覆盖第一第二就是我们今年也会开始收费有些提加的情况因为我们目前的收费基本上是跟21年是一样的就是21年 包括2023年24年上半年基本上也是没有改变的今年暑假开始我们的那个K九包括高中我们的一些政策课程都可以提五个点这样子然后我们之后吧也是按大概每年提早五个点的节 ...
思考乐教育策略会交流
Tianfeng Securities· 2024-06-28 02:26
各位投资人早上好我是天风清访教育团队的子君欢迎大家参加我们今天 长沙特别会思考的教育的小组会最近也是临近上半年逐渐结束马上暑期的培训包括暑假的一些相关的活动也会逐渐的开展我们也是看到公司作为华南的领先教培品牌一直也都有比较好的需求的增长包括扩张这块也在稳步的进行中所以近期我们也是再次请到苏总来为大家做一个 首先我就先把时间交给苏总请苏总再为我们简单的更新一下情况然后后续我们会再开放问答环节欢迎大家提问苏总好的好的大家早上好我是西瓜大集团的CFO苏伟腾 非常感谢大家今天参加这个教育会也感谢天峰把我们组织一个很好的一个跟大家有活动的一个教育的机会首先我跟大家简单介绍一下我们公司的一些最新情况吧第一就是我们公司今年有35家的经销区可以在深圳成立就是开业了 我们去年年底在深圳里面有110家学校今年暑假已经增加到145家所以现在我们基本上所有的一些区里面都可以找到我们的分校包括一些较偏的一些专卖地区包括一些新区等等基本上我们可以说是全覆盖第一 第二就是我们今年也会开始收费有些提高的情况因为我们目前的收费基本上是跟二一年是一样的就是二一年包括二二年二三年二四年三八年基本上也是没有改变的今年暑假开始我们的黑酒包括高中我们的 ...
思考乐教育(01769) - 2023 - 年度财报
2024-04-19 13:21
Revenue and Profit Growth - Revenue increased by 41.9% from RMB 402.1 million in 2022 to RMB 570.6 million in 2023, driven by an increase in student enrollments and tutoring hours due to the expansion of learning centers[14] - Gross profit rose by 72.0% from RMB 138.7 million in 2022 to RMB 238.6 million in 2023, with gross margin improving significantly[32] - Adjusted net profit attributable to equity holders surged by 98.5% from RMB 54.4 million in 2022 to RMB 108.0 million in 2023, excluding non-operational items such as share-based compensation and losses from the live e-commerce business[32] - The company's pre-tax profit increased by 175.9% from RMB 42.3 million in 2022 to RMB 116.7 million in 2023[19] - The company's adjusted basic earnings per share increased from RMB 0.0979 in 2022 to RMB 0.1956 in 2023[23] Business Expansion and Strategy - The company plans to expand its "LeXue" brand, focusing on quality education in areas such as art, sports, painting, and international literacy, to meet diverse student needs and promote holistic development[36] - The company is exploring new opportunities, including educational tourism and international courses, to diversify its revenue base and contribute to long-term growth[32] - The number of learning centers increased during 2023, contributing to the growth in student enrollments and tutoring hours[14] - The company's future prospects and development strategies are outlined in the Chairman's Report on pages 6-7 of the annual report[105] Expenses and Cost Management - Sales expenses increased by 144.2% from RMB 4.7 million in 2022 to RMB 11.4 million in 2023, primarily due to advertising and exhibition expenses, as well as customer service costs related to the live e-commerce business, which was terminated at the end of 2023[17] - The live e-commerce business, which incurred a net loss of RMB 13.9 million in 2023, was terminated, and no significant related expenses are expected in 2024[7] Share Repurchase and Capital Management - The company repurchased a total of 10,397,000 shares on the Hong Kong Stock Exchange during the year ended December 31, 2023[43] - The company repurchased 438,000 shares from the market between January 1, 2024, and January 19, 2024, for a total consideration of HKD 997,000 (approximately RMB 906,000), to be held for cancellation[63] - The company repurchased a total of 330,000 shares on the Hong Kong Stock Exchange at a total cost of HKD 289,360, with the highest price per share at HKD 0.93 and the lowest at HKD 0.86[84] - The company's repurchased shares have not been canceled, and the board believes this will increase earnings per share and net asset value per share[84] Corporate Governance and Board Structure - The company has appointed three independent non-executive directors, constituting more than one-third of the board, to balance the interests of shareholders and enhance overall corporate governance[81] - The company's board decision-making mechanisms include provisions to avoid conflicts of interest, requiring directors to declare any significant interests in contracts or arrangements[81] - The company's board of directors includes four executive directors, one non-executive director, and three independent non-executive directors as of the annual report date[117] - The company has established four board committees: Audit Committee, Remuneration Committee, Nomination Committee, and Strategic Development Committee to oversee specific areas of corporate governance[192] Employee and Compensation Management - The company employed a total of 2,319 employees as of December 31, 2023, compared to 1,350 employees in 2022, representing a significant increase[54] - The company's compensation policy is aligned with market practices and is determined based on individual employee performance and experience[54] - The company's retirement and employee benefit plan details are provided in Note 39.17 of the consolidated financial statements[52] - The company's directors and top five highest-paid individuals' remuneration details are disclosed in the consolidated financial statements[115] - The company has adopted a share incentive plan and a share plan to provide rewards to eligible employees[116] - The company's share incentive plan aims to retain and attract talent by providing direct economic benefits to eligible participants, without diluting existing shareholders[198][199] - The board of directors has the authority to determine the number of incentive shares awarded to selected participants based on the company's financial condition and the participants' performance and rank[200] Legal and Compliance - The company has not issued any debentures during the year ended December 31, 2023[46] - The company has not been involved in any significant litigation or arbitration during the year ended December 31, 2023[47] - The company has arranged appropriate insurance for legal proceedings against directors and senior management[49] - The company's structural contracts remain legally enforceable as of December 31, 2023, with no violations of current Chinese laws and regulations[82] - The company has implemented measures to enhance control over its Chinese operating entities prior to the termination of structural contracts[82] - The company is committed to disclosing any significant adverse impacts from changes in foreign investment laws and ensuring compliance with these laws[78] - The company is not aware of any unfulfilled structural contracts or non-compliance with the measures as of the annual report date[82] - The company has maintained its structural contracts without significant changes as of the annual report date[83] - The company's legal advisor confirmed that the structural contracts are enforceable and compliant with Chinese laws as of December 31, 2023[82] Shareholder and Equity Management - The company's share premium available for distribution to shareholders was approximately RMB 79.8 million as of December 31, 2023[132] - The company's major shareholder, Tiansheng, held a 39.48% beneficial ownership interest in the company as of December 31, 2023[146] - Chen Qiyuan, the controlling shareholder, holds 219,395,000 shares, representing approximately 39.48% of the company's equity[164] - The company maintains a public float of at least 25% of its total issued shares, as required by the Hong Kong Stock Exchange listing rules[187] Share Option and Incentive Plans - The company's share option plan allows the board to grant options to eligible participants within 10 years from the adoption date, with an exercise price determined by the board[148] - The company's share option plan aims to retain, incentivize, and reward selected participants, with a nominal acceptance fee of HKD 1.00[150] - The company's board has the authority to determine the exercise price of share options, which must not be lower than the highest of the closing price, the average closing price of the preceding five trading days, or the par value of the shares[151] - The company granted 27,785,000 share options under the share option plan on February 6, 2023, with an exercise price of HKD 1.62 per share[152] - The fair value of each share option granted was estimated to be between HKD 0.81 and HKD 1.01 using a trinomial valuation model, with key inputs including a stock price of HKD 1.53, expected volatility of 86.32%, and a risk-free interest rate of 3.29% to 3.57%[154] - The maximum number of shares that can be granted under the share award plan is limited to 1% of the company's issued share capital as of the adoption date[157] - The total number of shares that may be issued upon the exercise of all share options granted under the share option plan is capped at 55,570,000 shares, representing 10% of the issued shares as of the annual report date[174] - The company granted a total of 27,785,000 share options to grantees under the share option plan on February 6, 2023, with vesting conditions tied to performance standards and employment duration[178] - The share options will vest in three tranches: 33% after the 2023 annual results announcement, 33% after the 2024 annual results announcement, and the remaining 34% after the 2025 annual results announcement[178] - The share option plan was terminated on February 27, 2024, and no further share options will be granted under this plan, although previously granted options remain exercisable[197] Financial and Operational Details - The company's top five suppliers accounted for less than 30% of the cost of revenue for the year ended December 31, 2023[107] - The company had no bank borrowings as of December 31, 2023, and December 31, 2022[111] - The company's property, plant, and equipment details are included in the consolidated financial statements[110] - The company's top five customers contributed less than 30% of the total revenue for the year ended December 31, 2023[127] - The company implemented environmental protection measures and encouraged employees to save energy and reduce waste, with no environmental violations reported for the year[128] - The company's environmental, social, and governance (ESG) performance and policies are detailed in the annual report[109] Dividend and Shareholder Returns - The company does not recommend paying a final dividend for the year ended December 31, 2023 (year ended December 31, 2022: none)[90] - The total number of shares available for future grants under the share plan is 38,899,000, with a service provider sub-limit of 5,557,000 shares[91] Auditors and Financial Reporting - PricewaterhouseCoopers was appointed as the auditor for the fiscal year ending December 31, 2023, and audited the financial statements prepared under International Financial Reporting Standards[189] Leadership and Management - The company's founder, Mr. Chen Qiyuan, is responsible for the overall formulation and guidance of the company's business strategy and development[65] - The company's CFO, Mr. Hua Ribao, is responsible for the financial management of the group[74] - The company's independent non-executive directors have service contracts with an initial fixed term of one year, terminable with at least three months' written notice[136] - The company's board has established a remuneration committee to review the company's remuneration policies and structures for directors and senior management based on performance and market practices[137]
合约负债高增52%,期待2024表现
Tianfeng Securities· 2024-04-04 16:00
港股公司报告 | 公司点评 港股总市值(百万港元) 2,333.94 一年内最高/最低(港元) 5.20/0.79 思考乐教育(01769) 证券研究报告 2024 年 03 月 30 日 投资评级 行业 非必需性消费/支援服 务 6 个月评级 买入(维持评级) 当前价格 4.2 港元 目标价格 港元 2023 年公司收入 5.7 亿元,同增 41.9%;毛利 2.4 亿元,同增 72%;归母 净利 0.86 亿,同增 58%;调后净利 1.08 亿元,同增 98.5%。 截止 2023 年底,思考乐现金及等价物以及定期存款 3.62 亿元,同增 21.2%, 系经营活动所得现金流入净额增长。合约负债(主要为预收学费)2.76 亿 元,同增 52%。 公司将加强公司旗下「乐学」品牌业务发展,包括美术、体育、绘画、表 演、书法、科学素养、国学、逻辑思维及国际素养等素质教育,配合学生 不同的需要,鼓励学生兴趣和特长发展,让孩子在「德、智、体、美、劳」 五方面得到均衡的发展,促进他们健康成长和全人发展,为学生提供优质 的服务。 港股总股本(百万股) 555.70 资产负债率(%) 56.12 发布 2023 年业绩 ...
思考乐教育(01769)发布年度业绩 股东应占溢利8598.8万元 同比增长58%
Zhi Tong Cai Jing· 2024-03-28 08:40
智通财经APP讯,思考乐教育(01769)发布截至2023年12月31日止年度业绩,集团收益人民币5.71亿元(单位下同),同比增长41.9%;股东应占溢利8598.8万元,同比增长58.0%;每股基本盈利15.58分。 公告称,集团积极寻求新的商机,并于截至2023年12月31日止年度推出教育旅游业务及国际课程。集团相信,新的业务举措将扩阔集团的收益基础,为长远发展带来贡献。 ...
思考乐教育(01769) - 2023 - 年度业绩
2024-03-28 08:30
Financial Performance - Adjusted net profit attributable to equity holders increased by 58.0% to RMB 86.0 million for the year ended December 31, 2023, compared to RMB 54.4 million for the previous year[3]. - Total revenue grew by 41.9% to RMB 570.6 million for the year ended December 31, 2023, up from RMB 402.1 million in the previous year[3]. - Adjusted basic earnings per share rose to RMB 19.56, a 99.8% increase from RMB 9.79 in the previous year[9]. - Adjusted diluted earnings per share increased to RMB 19.37, reflecting a 97.9% rise from RMB 9.79 in the previous year[9]. - The company recorded an operating profit of RMB 122.6 million for the year ended December 31, 2023[3]. - The profit before tax increased by 175.9% to RMB 116.7 million for the year ended December 31, 2023, compared to RMB 42.3 million in the previous year[26]. - Net profit for the year ended December 31, 2023, was RMB 84.5 million, up from RMB 53.9 million for the year ended December 31, 2022[43]. - The adjusted profit attributable to equity holders for the year was RMB 107,999,000, a significant increase of 98.5% from RMB 54,411,000 in the previous year[190]. Revenue Sources - Revenue from non-academic quality courses increased from RMB 369.8 million to RMB 518.9 million, with related tutoring hours growing from 4,282,148 to 5,973,028[3]. - The number of students enrolled in non-academic quality courses rose to 239,020, with total tutoring hours reaching 5,973,028, marking a 39.6% increase[7]. - The company launched educational tourism and international courses during the year ended December 31, 2023, aiming to expand its revenue base[18]. - The company's revenue increased by 41.9% from RMB 402.1 million for the year ended December 31, 2022, to RMB 570.6 million for the year ended December 31, 2023, primarily due to an increase in student enrollment and tutoring hours[48]. Expenses and Costs - The cost of sales rose by 26.1% from RMB 263.4 million for the year ended December 31, 2022, to RMB 332.1 million for the year ended December 31, 2023, mainly due to increased teacher salaries and property management fees[50]. - Sales expenses increased by 144.2% from RMB 4.7 million for the year ended December 31, 2022, to RMB 11.4 million for the year ended December 31, 2023, primarily due to increased advertising and exhibition expenses as well as customer service personnel costs related to live e-commerce activities[51]. - Administrative expenses rose by 48.7% from RMB 82.4 million for the year ended December 31, 2022, to RMB 122.6 million for the year ended December 31, 2023, mainly due to increases in administrative personnel and office expenses[52]. - Total expenses for 2023 amounted to RMB 481,107,000, an increase of 31.1% from RMB 366,730,000 in 2022[135]. Assets and Liabilities - The total assets amounted to RMB 1,033.2 million, compared to RMB 754.9 million as of December 31, 2022[67]. - The total equity increased from RMB 371.4 million as of December 31, 2022, to RMB 453.4 million as of December 31, 2023[67]. - The total current liabilities increased from RMB 300.8 million as of December 31, 2022, to RMB 450.8 million as of December 31, 2023[69]. - The total non-current liabilities rose from RMB 82.8 million as of December 31, 2022, to RMB 129.1 million as of December 31, 2023[68]. - The company’s total current liabilities increased to RMB 94,192,000 in 2023, compared to RMB 83,431,000 in 2022, reflecting an increase of 13.3%[145]. Cash Flow and Liquidity - Cash and cash equivalents increased by 21.2% to RMB 362.0 million as of December 31, 2023, compared to RMB 298.7 million at the end of 2022[29]. - The company maintains sufficient cash reserves and bank balances to manage liquidity risks, with no significant liquidity risk identified[104]. - For the year ended December 31, 2023, cash outflow from leasing financing activities was RMB 49,329,000, compared to RMB 40,557,000 for the year ended December 31, 2022, representing an increase of 21.9%[164]. Shareholder Information - The board does not recommend the payment of a final dividend for the year ended December 31, 2023, compared to no dividend for the year ended December 31, 2022[61]. - The company did not recommend the payment of a final dividend for the year ended December 31, 2023, consistent with the previous year[167]. - The total number of ordinary shares outstanding was 552,033,000 in 2023, slightly down from 555,700,000 in 2022[116]. Corporate Governance - The board of directors includes both executive and non-executive members, ensuring compliance with corporate governance standards[170]. - The company continues to comply with public shareholding requirements as per listing rules[85]. Future Plans and Strategies - The company plans to enhance the development of its "Le Xue" brand, focusing on various quality education programs to meet diverse student needs[4]. - The group plans to continue exploring new opportunities across different sectors to broaden its revenue base and enhance shareholder returns[20].
首次覆盖报告:供给出清,教培龙头受益
Guotai Junan Securities· 2024-03-11 16:00
Investment Rating - The report initiates coverage with a "Buy" rating for the company [2][3]. Core Views - The leading company in the education sector is expected to benefit from a significant supply reduction and has completed compliance ahead of others. The company is well-positioned in the Greater Bay Area and is likely to achieve a rapid recovery through non-academic quality education training and high school business [2]. - The company is projected to have net profits of 102 million, 150 million, and 218 million CNY for the years 2023, 2024, and 2025 respectively, with corresponding EPS of 0.18, 0.27, and 0.39 CNY [2]. Summary by Sections 1. Profit Forecast and Investment Recommendations - The company is expected to recover quickly due to the significant supply reduction post-"double reduction" policy, with a focus on K9 quality education and stable high school operations. The projected revenues for 2023-2025 are 5.65 billion, 8.11 billion, and 11.76 billion CNY, with growth rates of 40%, 44%, and 45% respectively [18][19]. 2. Company Overview - The company has undergone strategic adjustments since the "double reduction" policy, launching K9 quality education courses in 2021, which now account for 80% of its revenue. The high school business contributes approximately 15% to the overall revenue [2][28]. 3. Industry Analysis - The education industry is experiencing a significant supply reduction, with a 90% decrease in academic training institutions post-policy. The demand for education remains resilient, particularly in the Greater Bay Area, where the number of students in primary and secondary education is gradually increasing [2][42]. 4. Business Focus - The company is concentrating on non-academic quality education and high school tutoring, with a diverse range of over 288 products and 1012 scientific experiments designed to meet the needs of preschool and primary school users [2][28]. 5. Financial Performance - In the first half of 2023, the company reported revenues of 251 million CNY, a 31% increase year-on-year, with a gross profit of 104 million CNY and a gross margin of 41% [35][36]. The non-academic quality education segment accounted for 92% of total revenue [36].
港股异动 | 思考乐教育(01769)高开近7%领涨教育股 校外培训条例征求意见稿公布
Zhi Tong Cai Jing· 2024-02-09 01:32
智通财经APP获悉,教育股早盘集体高开,截至发稿,思考乐教育(01769)涨6.67%,报2.72港元;新东方-S(09901)涨6.4%,报68.2港元;天立国际控股(01773)涨5.67%,报3.17港元;卓越教育集团(03978)涨5.19%,报1.62港元。 消息面上,教育部研究形成《校外培训管理条例(征求意见稿)》,现面向社会公开征求意见。《征求意见稿》明确了校外培训成为学校教育有益补充的基本定位,明确了校外培训公益性的基本原则,明确了规范管理、提高质量、满足多样化文化教育需求的目标导向,明确了平衡机构、家长、学生、学校等各方权利义务关系并保障各方合法权益的立法价值,进一步完善了校外培训管理制度。《征求意见稿》在推进依法管理的同时,正视家长的合理培训需求,提出鼓励、支持少年宫、科技馆、博物馆等各类校外场馆(所)开展校外培训,引导非学科类校外培训机构参与学校课后服务等举措。 民生证券表示,本周民办教育协会发布编程类、舞蹈类校外培训指引,非学科培训政策不断清晰,行业监管延续保护合规、打击非法。从新东方、好未来等头部企业财报来看,行业景气度趋势确定。该行认为教培是未来2年少有的边际向上赛道,值得重视。大 ...
思考乐教育(01769) - 2023 - 中期财报
2023-09-20 08:57
[Company Information](index=3&type=section&id=Company%20Information) This section outlines the company's board, legal and auditing advisors, registered office, and key listing and banking details [Board of Directors and Legal Advisors](index=3&type=section&id=Board%20of%20Directors%20and%20Legal%20Advisors) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with audit, remuneration, nomination, and strategy development committees; legal advisors include Allen & Overy and Conyers Dill & Pearman - Board members include Chairman Mr. Chen Qiyuan (Executive Director) and CEO Mr. Qi Mingzhi (Executive Director)[5](index=5&type=chunk) - The Audit Committee is chaired by Mr. Wong Wai Tak, the Remuneration Committee by Ms. Yan Jiamin, and both the Nomination and Strategy Development Committees by Mr. Chen Qiyuan[5](index=5&type=chunk) [Auditor and Registered Office](index=3&type=section&id=Auditor%20and%20Registered%20Office) The company's auditor is PricewaterhouseCoopers, with its registered office in the Cayman Islands, headquarters in Shenzhen, China, and principal Hong Kong business location in Kowloon - The auditor is **PricewaterhouseCoopers**[5](index=5&type=chunk) - The registered office is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands[5](index=5&type=chunk) - The headquarters and principal place of business in China are located at Room 401–410, 4/F, Yunfeng Garden, No. 29 Youyi Road, Jianan Community, Nanhu Street, Luohu District, Shenzhen, China[5](index=5&type=chunk) [Shares and Banking Information](index=4&type=section&id=Shares%20and%20Banking%20Information) The company's shares were listed on June 21, 2019, with stock code 1769, and its principal bankers include China Merchants Bank, Industrial Bank, and Agricultural Bank of China - The listing date was **June 21, 2019**, with stock code **1769**[7](index=7&type=chunk) - Principal bankers include China Merchants Bank Co., Ltd. Shenzhen Cuizhu Branch, Industrial Bank Co., Ltd. Shenzhen Meilin Branch, and Agricultural Bank of China Co., Ltd. Shenzhen Jinfu Branch[7](index=7&type=chunk) [Company Profile](index=5&type=section&id=Company%20Profile) This section provides an overview of the company's core educational services, philosophy, and its strategic diversification into new business areas like live e-commerce [Educational Services and Philosophy](index=5&type=section&id=Educational%20Services%20and%20Philosophy) Thinkol Education Group is a leading private education service provider in South China, offering quality tutoring and after-school care with a philosophy of 'Extensive Learning, Dedicated Teaching, Achieving Students' - The company is a leading private education service provider in **South China**[21](index=21&type=chunk) - The educational philosophy is 'Extensive Learning, Dedicated Teaching, Achieving Students', with all courses taught in **small classes of no more than 20 students**[9](index=9&type=chunk) - After-school care services are provided to offer a safe and comfortable environment for students, fostering positive values and lifelong learning abilities[10](index=10&type=chunk) [Diversified Business Development](index=5&type=section&id=Diversified%20Business%20Development) The Group actively pursues diversification, expanding beyond 'Lexue' general education courses into live e-commerce, leveraging brand, technology, and resources to offer diverse, high-quality products - The 'Lexue' curriculum covers general education in art, sports, painting, performing arts, calligraphy, scientific literacy, traditional Chinese studies, logical training, and international literacy[22](index=22&type=chunk) - Exploring new opportunities, the Group has entered the live e-commerce business, offering food, beverages, daily necessities, and other products, aiming to build a high-quality, cost-effective e-commerce platform[23](index=23&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) This section presents a concise overview of the Group's key financial performance indicators for the period, highlighting revenue growth and a return to profitability [Key Financial Indicators](index=6&type=section&id=Key%20Financial%20Indicators) For the six months ended June 30, 2023, revenue increased by 31.3% to RMB251.3 million, operating profit turned positive to RMB49.7 million, and profit attributable to equity holders surged by 234.1% to RMB42.9 million Financial Highlights for the Six Months Ended June 30 | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Change (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | 251,323 | 191,428 | 59,895 | 31.3% | | Operating Profit/(Loss) | 49,656 | (54,703) | 104,359 | 190.8% | | Profit/(Loss) for the Period Attributable to Equity Holders | 42,938 | (32,027) | 74,965 | 234.1% | | Adjusted Profit/(Loss) for the Period Attributable to Equity Holders | 46,511 | (32,027) | 78,538 | 245.2% | Earnings/(Loss) Per Share | Item | 2023 (RMB cents) | 2022 (RMB cents) | Change (RMB cents) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Basic | 7.73 | (5.76) | 13.49 | 234.2% | | Diluted | 7.66 | (5.76) | 13.42 | 233.0% | | Adjusted Basic Earnings/(Loss) Per Share | 8.37 | (5.76) | 14.13 | 245.3% | | Adjusted Diluted Earnings/(Loss) Per Share | 8.29 | (5.76) | 14.05 | 244.0% | [Chairman's Report](index=7&type=section&id=Chairman%27s%20Report) This report summarizes the Group's financial performance, outlines future development strategies, and expresses gratitude to stakeholders for their continued support [Performance Summary](index=7&type=section&id=Performance%20Summary) The Group's core business remained profitable, achieving an operating profit of RMB49.7 million, with significant growth in quality-oriented courses and a return to net profit - The Group's principal business remained profitable, recording an operating profit of **RMB49.7 million**[28](index=28&type=chunk) - Revenue from quality-oriented courses increased from RMB179.0 million in the prior period to **RMB232.2 million**, with tutoring hours growing by **29.3%**[28](index=28&type=chunk) - Total revenue increased by **31.3%** year-on-year to **RMB251.3 million**, with net profit attributable to equity holders of **RMB42.9 million**, driven by increased tutoring hours, improved operating efficiency, and fair value gains on financial assets[28](index=28&type=chunk) [Future Outlook and Development Strategies](index=7&type=section&id=Future%20Outlook%20and%20Development%20Strategies) The Group is actively pursuing new opportunities in live e-commerce and strengthening its 'Lexue' quality education brand to achieve diversified growth, expand revenue, and enhance shareholder returns - Actively seeking new business opportunities, entering the live e-commerce sector, and leveraging brand, technology, resources, and talent to create a high-quality, cost-effective e-commerce platform[29](index=29&type=chunk) - Further strengthening the 'Lexue' brand in quality-oriented education, including courses in art, sports, painting, performing arts, calligraphy, scientific literacy, traditional Chinese studies, logical thinking training, and international literacy[29](index=29&type=chunk) - The Group will strive to promote comprehensive diversified development, utilizing brand influence and management experience to expand its revenue base, while rigorously implementing cost control measures and maintaining stable cash flow[29](index=29&type=chunk) [Acknowledgements](index=8&type=section&id=Acknowledgements) The Chairman, on behalf of the Board, extends gratitude to students, parents, management, employees, shareholders, government, and business partners for their support and dedication - The Chairman, on behalf of the Board, expresses gratitude for the loyalty and dedication of students, parents, management, and all employees[31](index=31&type=chunk) - Appreciation is extended to shareholders, various government authorities, and business partners for their support and trust[31](index=31&type=chunk) [Interim Financial Information Review Report](index=9&type=section&id=Interim%20Financial%20Information%20Review%20Report) This section presents the independent review report on the interim financial information, confirming its preparation in accordance with International Accounting Standard 34 [Review Conclusion](index=9&type=section&id=Review%20Conclusion) PricewaterhouseCoopers reviewed the interim financial information in accordance with ISRE 2410 and found no material matters indicating non-compliance with IAS 34 - The scope of review is less than that of an audit, thus no audit opinion is expressed[62](index=62&type=chunk) - The auditor, PricewaterhouseCoopers, concluded that nothing has come to their attention to suggest that the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[63](index=63&type=chunk)[64](index=64&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=10&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement details the Group's revenue, costs, and profit or loss for the interim period, showing a significant turnaround from a prior-year loss to a current-period profit [Revenue and Profit Performance](index=10&type=section&id=Revenue%20and%20Profit%20Performance) For the six months ended June 30, 2023, the Group reported revenue of RMB251,323 thousand, gross profit of RMB104,058 thousand, operating profit of RMB49,656 thousand, and profit for the period of RMB42,474 thousand, reversing the prior year's loss Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 251,323 | 191,428 | | Cost of Sales | (147,265) | (126,848) | | Gross Profit | 104,058 | 64,580 | | Selling Expenses | (5,133) | (1,566) | | Administrative Expenses | (50,420) | (34,963) | | Research and Development Expenses | (8,701) | (6,792) | | Other Income — Net | 4,134 | 2,975 | | Other Gains/(Losses) — Net | 5,718 | (78,937) | | Operating Profit/(Loss) | 49,656 | (54,703) | | Finance Costs | (2,774) | (3,826) | | Profit/(Loss) Before Income Tax | 46,882 | (58,529) | | Income Tax (Expense)/Credit | (4,408) | 25,689 | | Profit/(Loss) for the Period | 42,474 | (32,840) | | Profit/(Loss) Attributable to Equity Holders | 42,938 | (32,027) | | Profit/(Loss) Attributable to Non-controlling Interests | (464) | (813) | | Basic Earnings/(Loss) Per Share (RMB cents) | 7.73 | (5.76) | | Diluted Earnings/(Loss) Per Share (RMB cents) | 7.66 | (5.76) | [Interim Condensed Consolidated Statement of Financial Position](index=11&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the Group's financial position, detailing its assets, liabilities, and equity as of the reporting date [Asset Structure](index=11&type=section&id=Asset%20Structure) As of June 30, 2023, the Group's total assets amounted to RMB734,864 thousand, comprising RMB434,053 thousand in non-current assets and RMB300,811 thousand in current assets Interim Condensed Consolidated Statement of Financial Position (Assets) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 35,486 | 37,678 | | Right-of-Use Assets | 141,000 | 135,895 | | Investment Properties | 82,155 | 82,375 | | Intangible Assets | 2,768 | 2,454 | | Prepayments and Other Receivables | 22,993 | 10,931 | | Deferred Tax Assets | 19,686 | 20,264 | | Financial Assets at Fair Value Through Profit or Loss | 33,965 | 32,695 | | Financial Assets Measured at Amortised Cost | 96,000 | — | | **Total Non-current Assets** | **434,053** | **322,292** | | **Current Assets** | | | | Inventories | 301 | — | | Prepayments and Other Receivables | 24,689 | 16,566 | | Financial Assets at Fair Value Through Profit or Loss | 92,267 | 117,295 | | Fixed Deposits with Original Maturity Over Three Months | 9,047 | — | | Cash and Cash Equivalents | 174,507 | 298,737 | | Restricted Cash | — | 35 | | **Total Current Assets** | **300,811** | **432,633** | | **Total Assets** | **734,864** | **754,925** | [Liabilities and Equity Structure](index=11&type=section&id=Liabilities%20and%20Equity%20Structure) As of June 30, 2023, the Group's total equity was RMB416,150 thousand, and total liabilities were RMB318,714 thousand, with current liabilities amounting to RMB229,223 thousand Interim Condensed Consolidated Statement of Financial Position (Equity and Liabilities) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Equity** | | | | Share Capital | 3,775 | 3,775 | | Share Premium | 82,698 | 82,698 | | Shares Held for Employee Share Scheme | (2,203) | — | | Other Reserves | 36,815 | 32,338 | | Retained Earnings | 295,529 | 252,591 | | Capital and Reserves Attributable to Equity Holders of the Company | 416,614 | 371,402 | | Non-controlling Interests | (464) | — | | **Total Equity** | **416,150** | **371,402** | | **Liabilities** | | | | **Non-current Liabilities** | | | | Lease Liabilities | 89,491 | 82,764 | | **Total Non-current Liabilities** | **89,491** | **82,764** | | **Current Liabilities** | | | | Contract Liabilities | 128,851 | 181,524 | | Lease Liabilities | 35,417 | 34,169 | | Trade and Other Payables | 61,662 | 83,431 | | Current Income Tax Liabilities | 3,293 | 1,635 | | **Total Current Liabilities** | **229,223** | **300,759** | | **Total Liabilities** | **318,714** | **383,523** | | **Total Equity and Liabilities** | **734,864** | **754,925** | [Interim Condensed Consolidated Statement of Changes in Equity](index=13&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement illustrates the changes in the Group's equity components over the interim period, reflecting profits, share-based payments, and share acquisitions [Overview of Equity Changes](index=13&type=section&id=Overview%20of%20Equity%20Changes) For the six months ended June 30, 2023, total equity increased from RMB371,402 thousand to RMB416,150 thousand, driven by profit for the period and share-based payments, partially offset by share acquisitions for the employee share scheme Interim Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Item | Share Capital (RMB thousands) | Share Premium (RMB thousands) | Shares Held for Employee Share Scheme (RMB thousands) | Other Reserves (RMB thousands) | Retained Earnings (RMB thousands) | Total (RMB thousands) | Non-controlling Interests (RMB thousands) | Total Equity (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2023 | 3,775 | 82,698 | — | 32,338 | 252,591 | 371,402 | — | 371,402 | | Profit for the period | — | — | — | — | 42,938 | 42,938 | (464) | 42,474 | | Total comprehensive income for the period | — | — | — | — | 42,938 | 42,938 | (464) | 42,474 | | Acquisition of shares for employee share scheme | — | — | (2,203) | — | — | (2,203) | — | (2,203) | | Share-based payments | — | — | — | 4,477 | — | 4,477 | — | 4,477 | | Balance at June 30, 2023 | 3,775 | 82,698 | (2,203) | 36,815 | 295,529 | 416,614 | (464) | 416,150 | Interim Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Item | Share Capital (RMB thousands) | Share Premium (RMB thousands) | Other Reserves (RMB thousands) | Retained Earnings (RMB thousands) | Total (RMB thousands) | Non-controlling Interests (RMB thousands) | Total Equity (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2022 | 3,775 | 82,698 | 33,293 | 198,180 | 317,946 | (401) | 317,545 | | Loss for the period | — | — | — | (32,027) | (32,027) | (813) | (32,840) | | Total comprehensive income for the period | — | — | — | (32,027) | (32,027) | (813) | (32,840) | | Balance at June 30, 2022 | 3,775 | 82,698 | 33,293 | 166,153 | 285,919 | (1,214) | 284,705 | [Interim Condensed Consolidated Statement of Cash Flows](index=15&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the Group's cash inflows and outflows from operating, investing, and financing activities, resulting in a net decrease in cash and cash equivalents [Cash Flow Overview](index=15&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2023, net cash outflow from operating activities was RMB7,561 thousand, from investing activities RMB93,942 thousand, and from financing activities RMB23,707 thousand, leading to a net decrease in cash and cash equivalents of RMB125,210 thousand Interim Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (7,561) | 4,558 | | Net Cash (Used in)/Generated from Investing Activities | (93,942) | 21,719 | | Net Cash Used in Financing Activities | (23,707) | (62,186) | | Net Decrease in Cash and Cash Equivalents | (125,210) | (35,909) | | Cash and Cash Equivalents at Beginning of Period | 298,737 | 236,041 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | 980 | 173 | | Cash and Cash Equivalents at End of Period | 174,507 | 200,305 | [Notes to the Interim Financial Information](index=16&type=section&id=Notes%20to%20the%20Interim%20Financial%20Information) This section provides detailed explanatory notes to the interim financial statements, covering general information, accounting policies, risk management, and specific financial line items [General Information and Basis of Preparation](index=16&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The company, incorporated in the Cayman Islands, primarily provides private education services in China, with shares listed on the HKEX since June 21, 2019, and interim financial information prepared under IAS 34 on a going concern basis - The Company is an investment holding company primarily engaged in providing **private education services in China**[85](index=85&type=chunk) - The Company's shares were listed on The Stock Exchange of Hong Kong Limited on **June 21, 2019**[87](index=87&type=chunk) - The condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and on a **going concern basis**[89](index=89&type=chunk)[90](index=90&type=chunk) [Accounting Policies and Estimates](index=17&type=section&id=Accounting%20Policies%20and%20Estimates) Accounting policies applied in this period are consistent with the 2022 financial statements, incorporating new and revised standards not expected to have a significant impact, with management judgments and estimates made during preparation - The accounting policies applied in this financial information are consistent with those of the 2022 financial statements, except for the adoption of **new and revised standards**[93](index=93&type=chunk) - New or revised standards include insurance contracts, disclosure of accounting policies, definition of accounting estimates, and deferred tax related to assets and liabilities arising from a single transaction[95](index=95&type=chunk) - Management is required to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts in preparing the interim financial information[96](index=96&type=chunk) [Financial Risk Management](index=18&type=section&id=Financial%20Risk%20Management) The Group manages market (foreign exchange, interest rate), credit, and liquidity risks by maintaining sufficient cash and bank balances and investing in low-risk wealth management products, with fair value estimates primarily using discounted cash flow methods - The Group's activities are exposed to market risks (including foreign exchange risk and cash flow and fair value interest rate risk), credit risk, and liquidity risk[98](index=98&type=chunk) - Liquidity risk is managed by holding sufficient cash and bank balances and investing surplus cash reserves in **low-risk wealth management products**[15](index=15&type=chunk)[99](index=99&type=chunk) Financial Liabilities Maturity Analysis (As of June 30) | Item | Within One Year (RMB thousands) | One to Two Years (RMB thousands) | Two to Five Years (RMB thousands) | Over Five Years (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | **2023** | | | | | | | Trade Payables | 1,896 | — | — | — | 1,896 | | Other Payables | 6,752 | — | — | — | 6,752 | | Lease Liabilities | 40,407 | 31,306 | 43,964 | 112,986 | 228,663 | | **Total** | **49,055** | **31,306** | **43,964** | **112,986** | **237,311** | | **2022** | | | | | | | Trade Payables | 1,281 | — | — | — | 1,281 | | Other Payables | 11,042 | — | — | — | 11,042 | | Lease Liabilities | 37,138 | 29,928 | 35,393 | 100,219 | 202,678 | | **Total** | **49,461** | **29,928** | **35,393** | **100,219** | **215,001** | Financial Instruments Measured at Fair Value (As of June 30) | Item | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | **2023** | | | | | | Wealth Management Products | — | — | 92,267 | 92,267 | | Listed Equity Investments in Mainland China | 3,335 | — | — | 3,335 | | Unlisted Equity Investments in Mainland China | — | — | 30,630 | 30,630 | | **Total** | **3,335** | **—** | **122,897** | **126,232** | | **2022** | | | | | | Wealth Management Products | — | — | 117,295 | 117,295 | | Listed Equity Investments in Mainland China | 2,065 | — | — | 2,065 | | Unlisted Equity Investments in Mainland China | — | — | 30,630 | 30,630 | | **Total** | **2,065** | **—** | **147,925** | **149,990** | [Revenue and Segment Information](index=20&type=section&id=Revenue%20and%20Segment%20Information) The Group's primary operating decision-maker views the Group as a single operating segment of private education services, with its main market in Guangdong Province, China, generating RMB251,323 thousand in revenue from private education services and others for the six months ended June 30, 2023 - The Group's chief operating decision-maker (the Board) considers the Group as a **single operating segment** of private education services[118](index=118&type=chunk) - The Group's principal market is located in **Guangdong Province, China**, from which most of its revenue and operating profit are derived[115](index=115&type=chunk) Revenue by Timing of Recognition (For the six months ended June 30) | Revenue Source | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Private Education Services and Others | 251,323 | 191,428 | [Other Income and Gains](index=21&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2023, net other income was RMB4,134 thousand, primarily from sub-leasing, operating lease rentals, finance income, and government grants, while net other gains were RMB5,718 thousand, mainly due to reduced fair value losses on financial assets Other Income—Net (For the six months ended June 30) | Income Source | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Sub-lease — Net | 354 | 112 | | Rental income from operating leases | 1,467 | 1,456 | | Finance income | 792 | 194 | | Government grants | 1,521 | 1,213 | | **Total** | **4,134** | **2,975** | Other Gains/(Losses)—Net (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains/(losses) on financial assets at fair value through profit or loss | 3,669 | (80,491) | | Interest on financial assets measured at amortised cost | 630 | — | | Lease modification | 279 | 4,356 | | Net loss on disposal of property, plant and equipment | (20) | (1,508) | | Deposit loss | (226) | (510) | | Compensation expenses | (115) | (483) | | Fair value loss on investment properties | (400) | (360) | | Net foreign exchange gains | 980 | 173 | | Others | 921 | (114) | | **Total** | **5,718** | **(78,937)** | [Expenses by Nature](index=22&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2023, total Group expenses were RMB211,519 thousand, with employee benefit expenses being the largest component, and increases in depreciation, amortization, advertising, and exhibition expenses Expenses by Nature (For the six months ended June 30) | Expense Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Employee benefit expenses | 147,712 | 109,545 | | Depreciation and amortisation | 28,441 | 39,679 | | Advertising and exhibition expenses | 4,247 | 1,327 | | Teaching materials | 3,689 | 2,922 | | Property management expenses | 3,081 | 3,117 | | Professional service fees | 3,336 | 2,514 | | Office expenses | 2,827 | 1,584 | | Maintenance costs | 1,569 | 1,540 | | Operating expenses | 1,376 | — | | Utilities | 1,370 | 986 | | Other taxes | 1,192 | 765 | | Auditor's remuneration | 650 | 650 | | COVID-19 related rental concessions | — | (1,310) | | Impairment provision | 3,794 | (12) | | Others | 8,235 | 6,862 | | **Total** | **211,519** | **170,169** | [Finance Costs and Income Tax](index=23&type=section&id=Finance%20Costs%20and%20Income%20Tax) For the six months ended June 30, 2023, finance costs decreased by 27.5% to RMB2,774 thousand due to lower interest on lease liabilities and borrowings, while income tax shifted from a credit to an expense of RMB4,408 thousand due to increased taxable profit Finance Costs (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Interest expense on borrowings | — | 356 | | Interest expense on lease liabilities | 2,774 | 3,470 | | **Total** | **2,774** | **3,826** | Income Tax Expense/(Credit) (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Current tax — Current tax on profit/(loss) for the period | 3,830 | (1,459) | | Deferred income tax — Increase/(decrease) in deferred income tax | 578 | (24,230) | | **Income Tax Expense/(Credit)** | **4,408** | **(25,689)** | - The PRC corporate income tax rate is **25%**, but Shenzhen Thinkol enjoyed a **15% preferential tax rate** as a high-tech enterprise from 2020-2022, increasing to **25%** from January 1, 2023[133](index=133&type=chunk) - Under PRC tax regulations, enterprises can claim a **200% super deduction** for research and development expenses[136](index=136&type=chunk) [Earnings/(Loss) Per Share](index=25&type=section&id=Earnings%2F%28Loss%29%20Per%20Share) For the six months ended June 30, 2023, basic earnings per share were RMB7.73 cents and diluted earnings per share were RMB7.66 cents, both reversing from a loss in the prior year Basic Earnings/(Loss) Per Share (For the six months ended June 30) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Profit/(Loss) attributable to equity holders of the Company (RMB thousands) | 42,938 | (32,027) | | Weighted average number of ordinary shares in issue (thousands of shares) | 555,515 | 555,700 | | Basic earnings/(loss) per share (RMB cents) | 7.73 | (5.76) | Diluted Earnings/(Loss) Per Share (For the six months ended June 30) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Diluted earnings/(loss) per share (RMB cents) | 7.66 | (5.76) | | Weighted average number of ordinary shares in issue used as the denominator in calculating basic earnings/(loss) per share | 555,515,000 | 555,700,000 | | Adjustments for the calculation of diluted earnings/(loss) per share: share options | 5,349,000 | — | | Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings/(loss) per share | 560,864,000 | 555,700,000 | [Property, Plant and Equipment](index=27&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2023, the carrying value of property, plant and equipment was RMB35,486 thousand, with additions of RMB3,842 thousand and depreciation expense of RMB6,014 thousand during the period Movements in Property, Plant and Equipment (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | At beginning of period | 37,678 | 54,369 | | Additions | 3,842 | 901 | | Transferred to investment properties | — | (4,798) | | Disposals | (20) | (1,910) | | Depreciation expense | (6,014) | (4,453) | | At end of period | 35,486 | 44,109 | [Right-of-Use Assets and Leases](index=27&type=section&id=Right-of-Use%20Assets%20and%20Leases) As of June 30, 2023, total right-of-use assets amounted to RMB141,000 thousand, including RMB44,351 thousand for land use rights and RMB96,649 thousand for properties, with total lease liabilities of RMB124,908 thousand Right-of-Use Assets and Lease Liabilities (As of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Right-of-Use Assets** | | | | Land use rights | 44,351 | 45,300 | | Properties | 96,649 | 90,595 | | **Total** | **141,000** | **135,895** | | **Lease Liabilities** | | | | Current | 35,417 | 34,169 | | Non-current | 89,491 | 82,764 | | **Total** | **124,908** | **116,933** | Depreciation Expense on Right-of-Use Assets (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Properties | 21,292 | 34,006 | | Land use rights | 949 | 1,044 | | **Total** | **22,241** | **35,050** | - For the six months ended June 30, 2023, cash outflow for lease financing activities was **RMB21,504 thousand**, and for short-term lease operating activities was **RMB2,793 thousand**[147](index=147&type=chunk) [Investment Properties](index=28&type=section&id=Investment%20Properties) As of June 30, 2023, investment properties had a fair value of RMB82,155 thousand, with additions of RMB180 thousand and a revaluation loss of RMB400 thousand during the period, primarily leased out under operating leases Movements in Investment Properties (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | At beginning of period | 82,375 | 65,100 | | Additions | 180 | — | | Transferred from property, plant and equipment | — | 4,798 | | Transferred from land use rights | — | 12,482 | | Revaluation loss recognised in other gains/(losses)—net | (400) | (360) | | At end of period | 82,155 | 82,020 | - Investment properties were valued by Jones Lang LaSalle Corporate Appraisal and Advisory Limited using the **comparison approach** with reference to recent market transaction prices[152](index=152&type=chunk) - Investment properties are leased to tenants under operating leases, with rent paid monthly, and tenants may be required to provide deposits to mitigate credit risk[153](index=153&type=chunk) [Intangible Assets](index=29&type=section&id=Intangible%20Assets) As of June 30, 2023, intangible assets had a carrying value of RMB2,768 thousand, with additions of RMB500 thousand and amortization of RMB186 thousand during the period Movements in Intangible Assets (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | At beginning of period | 2,454 | 2,801 | | Additions | 500 | 56 | | Disposals | — | (53) | | Amortisation | (186) | (176) | | At end of period | 2,768 | 2,628 | [Prepayments and Other Receivables](index=30&type=section&id=Prepayments%20and%20Other%20Receivables) As of June 30, 2023, non-current prepayments and other receivables totaled RMB22,993 thousand, and current portions were RMB24,689 thousand, primarily comprising lease deposits, prepayments, loans to employees, and other receivables Prepayments and Other Receivables (As of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Included in non-current assets** | | | | Lease deposits | 9,458 | 13,636 | | Prepaid fund management fees | 676 | 273 | | Prepayments for renovation of leased properties | 12,127 | 327 | | Interest receivable | 801 | — | | Impairment provision | (69) | (3,305) | | **Subtotal** | **22,993** | **10,931** | | **Included in current assets** | | | | Lease deposits | 2,941 | 479 | | Prepayments | 11,727 | 2,414 | | Loans to employees | 4,083 | 3,450 | | Cash advances to employees | 2,872 | 2,724 | | Lease receivables | 4,158 | 3,821 | | Other receivables | 1,829 | 6,093 | | Impairment provision | (2,921) | (2,415) | | **Subtotal** | **24,689** | **16,566** | - Loans to employees primarily refer to **unsecured and interest-free loans** granted to certain employees for personal housing purchases[158](index=158&type=chunk) - The Group applies the simplified approach under IFRS 9 to measure expected credit losses, making provisions for **lifetime expected losses** for all other receivables[159](index=159&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=31&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2023, total financial assets at fair value through profit or loss were RMB126,232 thousand, mainly comprising wealth management products and listed/unlisted equity investments in Mainland China, with additions of RMB1,208,110 thousand and disposals of RMB1,235,537 thousand during the period Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Listed equity investments in Mainland China | 3,335 | 2,065 | | Unlisted equity investments in Mainland China | 30,630 | 30,630 | | **Subtotal** | **33,965** | **32,695** | | **Current assets** | | | | Wealth management products | 92,267 | 117,295 | | **Total** | **126,232** | **149,990** | Movements in Financial Assets at Fair Value Through Profit or Loss (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | At beginning of period | 149,990 | 179,854 | | Additions | 1,208,110 | 644,422 | | Fair value gains/(losses) | 3,669 | (80,491) | | Disposals | (1,235,537) | (671,200) | | At end of period | 126,232 | 72,585 | - Short-term investments primarily consist of wealth management products denominated in RMB, with expected annual returns ranging from **7.0% to 8.7%**, measured at fair value through profit or loss as their contractual cash flows do not solely comprise principal and interest payments[165](index=165&type=chunk) [Bank Balances and Cash](index=32&type=section&id=Bank%20Balances%20and%20Cash) As of June 30, 2023, total cash and bank balances were RMB183,554 thousand, with RMB167,307 thousand denominated in RMB and RMB16,244 thousand in HKD, and cash and cash equivalents at period-end were RMB174,507 thousand Bank Balances and Cash (As of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Cash and bank deposits | 183,554 | 298,737 | | Less: Fixed deposits with original maturity over three months | (9,047) | — | | **Total** | **174,507** | **298,737** | Cash and Bank Deposits by Currency (As of June 30) | Currency | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | RMB | 167,307 | 296,924 | | USD | 3 | 3 | | HKD | 16,244 | 1,810 | | **Total** | **183,554** | **298,737** | - As of June 30, 2023, there were **no restricted deposits** held by banks[168](index=168&type=chunk) [Share Capital and Share Schemes](index=33&type=section&id=Share%20Capital%20and%20Share%20Schemes) As of June 30, 2023, the company had 555,700,000 ordinary shares in issue with a par value of RMB3,774,897 thousand; the trustee acquired 1,508,000 shares for the employee share scheme at a total cost of RMB2,203 thousand, and 27,785,000 share options were granted on February 6, 2023, resulting in a share option expense of RMB4,477 thousand Share Capital Information (As of June 30) | Item | Number of Authorised Ordinary Shares | Par Value of Authorised Ordinary Shares (USD) | Par Value of Authorised Ordinary Shares (RMB) | Number of Issued Ordinary Shares | Par Value of Issued Ordinary Shares (USD) | Par Value of Issued Ordinary Shares (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2023 and June 30, 2023 | 1,000,000,000 | 1,000,000 | 6,860,633 | 555,700,000 | 555,700 | 3,774,897 | Shares Held for Employee Share Scheme (As of June 30) | Item | Number of Shares | RMB thousands | | :--- | :--- | :--- | | Balance at January 1, 2023 | — | — | | Acquisition of shares by trustee | 1,508,000 | 2,203 | | Balance at June 30, 2023 | 1,508,000 | 2,203 | - On February 6, 2023, the Company granted **27,785,000 share options** with an exercise price of **HKD1.62**, aiming to provide long-term incentives to employees[178](index=178&type=chunk)[179](index=179&type=chunk) - For the six months ended June 30, 2023, the total share option expense recognised was approximately **RMB4,477 thousand**[185](index=185&type=chunk) [Share Premium and Other Reserves](index=35&type=section&id=Share%20Premium%20and%20Other%20Reserves) As of June 30, 2023, share premium was RMB82,698 thousand and other reserves totaled RMB36,815 thousand, primarily due to an increase of RMB4,477 thousand from share-based payments Movements in Share Premium and Other Reserves (As of June 30) | Item | Share Premium (RMB thousands) | Merger Reserve (RMB thousands) | Capital Reserve (RMB thousands) | Share-based Payment Reserve (RMB thousands) | Revaluation Surplus (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2023 | 82,698 | (46,347) | 78,056 | 251 | 378 | 32,338 | | Share-based payments | — | — | — | 4,477 | — | 4,477 | | Balance at June 30, 2023 | 82,698 | (46,347) | 78,056 | 4,728 | 378 | 36,815 | [Dividends](index=35&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2023 - The Board does not recommend the payment of an interim dividend for the six months ended **June 30, 2023**[187](index=187&type=chunk) [Contract Liabilities and Trade and Other Payables](index=36&type=section&id=Contract%20Liabilities%20and%20Trade%20and%20Other%20Payables) As of June 30, 2023, contract liabilities were RMB128,851 thousand, primarily representing prepaid consideration for education services, while trade and other payables totaled RMB61,662 thousand, mainly comprising employee benefits payable and trade payables Contract Liabilities (As of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Deferred revenue — Education services | 128,851 | 181,524 | Trade and Other Payables (As of June 30) | Item | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 1,896 | 1,281 | | Employee benefits payable | 41,511 | 57,141 | | Other taxes payable | 11,433 | 13,927 | | Advance lease payments | 70 | 40 | | Other payables | 6,752 | 11,042 | | **Total** | **61,662** | **83,431** | - Trade payables are primarily related to the purchase of educational books and other teaching aids, with a typical credit period of **three months**[192](index=192&type=chunk) [Events After Reporting Period and Comparative Figures](index=37&type=section&id=Events%20After%20Reporting%20Period%20and%20Comparative%20Figures) Between July 1 and July 21, 2023, the trustee of the company's share award scheme acquired 2,692,000 ordinary shares for RMB3,106 thousand, and comparative figures have been reclassified without affecting total equity or profit/loss - Between July 1 and July 21, 2023, the trustee of the Company's share award scheme acquired **2,692,000 ordinary shares** for a total consideration of **RMB3,106 thousand**[35](index=35&type=chunk) - Comparative figures have been reclassified to conform with the current period's presentation, with **no impact on total equity or profit/(loss)**[36](index=36&type=chunk) [Management Discussion and Analysis](index=38&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's financial performance, liquidity, capital structure, risk management, and future outlook for the interim period [Financial Review](index=38&type=section&id=Financial%20Review) For the six months ended June 30, 2023, the Group's revenue grew by 31.3% to RMB251.3 million, gross profit increased by 61.1% to RMB104.1 million with a gross margin of 41.4%, operating profit turned positive to RMB49.7 million, and profit for the period was RMB42.9 million - Revenue increased by **31.3%** from RMB191.4 million to **RMB251.3 million**, primarily due to an increase in total student enrollments and tutoring hours[38](index=38&type=chunk) Revenue by Education Service Category (For the six months ended June 30) | Category | 2023 (RMB thousands) | 2022 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-academic quality-oriented courses and others | 232,216 | 178,966 | 29.8% | | Tutoring courses | 19,107 | 12,462 | 53.3% | | **Total** | **251,323** | **191,428** | **31.3%** | Student Enrollments and Tutoring Hours (For the six months ended June 30) | Category | 2023 Student Enrollments | 2023 Tutoring Hours | 2022 Student Enrollments | 2022 Tutoring Hours | Student Enrollments Change (%) | Tutoring Hours Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Non-academic quality-oriented courses | 107,908 | 2,675,300 | 83,646 | 2,068,795 | 29.0% | 29.3% | | Tutoring courses | 8,622 | 212,300 | 5,671 | 138,704 | 52.0% | 53.1% | | **Total** | **116,530** | **2,887,600** | **89,317** | **2,207,499** | **30.5%** | **30.8%** | - Cost of sales increased by **16.1%** to **RMB147.3 million**, mainly due to increased teacher remuneration[40](index=40&type=chunk) - Gross profit increased by **61.1%** to **RMB104.1 million**, with gross margin improving from **33.7% to 41.4%**[41](index=41&type=chunk) - Selling expenses increased by **227.8%** to **RMB5.1 million**, primarily due to increased advertising and exhibition expenses and customer service personnel expenses for the live e-commerce business[44](index=44&type=chunk) - Administrative expenses increased by **44.2%** to **RMB50.4 million**, mainly due to increased administrative staff expenses and office expenses[1](index=1&type=chunk) - Research and development expenses increased by **28.1%** to **RMB8.7 million**, primarily due to increased R&D personnel expenses[45](index=45&type=chunk) - Net other income increased by **39.0%** to **RMB4.1 million**, mainly due to increased finance income and government subsidies[46](index=46&type=chunk) - Net other gains were **RMB5.7 million**, compared to a loss of RMB78.9 million in the prior period, primarily due to a **RMB84.2 million reduction** in fair value losses on financial assets[47](index=47&type=chunk) - Finance costs decreased by **27.5%** to **RMB2.8 million**, mainly due to reduced interest expenses on lease liabilities and borrowings[48](index=48&type=chunk) - Profit before income tax was **RMB46.9 million**, reversing a loss of RMB58.5 million in the prior period[49](index=49&type=chunk) - Income tax expense was **RMB4.4 million**, compared to a credit of RMB25.7 million in the prior period, primarily due to increased taxable profit[50](index=50&type=chunk) - Profit for the period attributable to equity holders was **RMB42.9 million**, reversing a loss of RMB32.0 million in the prior period[52](index=52&type=chunk) Adjusted Profit/(Loss) for the Period Attributable to Equity Holders (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) for the period attributable to equity holders | 42,938 | (32,027) | 234.1% | | Add: Share option benefit expenses | 3,573 | — | Not applicable | | **Adjusted Profit/(Loss) for the period attributable to equity holders** | **46,511** | **(32,027)** | **245.2%** | [Liquidity, Financial Resources and Capital Structure](index=41&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2023, the Group's total equity was RMB416.2 million, cash and cash equivalents decreased by 41.6% to RMB174.5 million, and the Group had no bank borrowings, resulting in a zero debt-to-asset ratio - As of June 30, 2023, the Group's total equity was **RMB416.2 million** (December 31, 2022: RMB371.4 million)[56](index=56&type=chunk) - Cash and cash equivalents decreased by **41.6%** from RMB298.7 million to **RMB174.5 million**[56](index=56&type=chunk) - The Group had **no bank borrowings** as of June 30, 2023, and December 31, 2022, resulting in a **debt-to-asset ratio of 0%**[56](index=56&type=chunk) [Treasury Management Policy](index=41&type=section&id=Treasury%20Management%20Policy) The Group's treasury management policy involves investing surplus cash reserves in low-risk, short-term wealth management products to generate income, with investment decisions authorized by the Chairman and executed by the Treasury Department - The treasury management policy is to utilize surplus cash reserves to invest in **low-risk wealth management products** without affecting business operations or capital expenditures[15](index=15&type=chunk) - Investments are generally made in **medium-to-low risk and short-term** (typically not exceeding one year) wealth management products, including low-risk products issued by trust companies and commercial banks, money market instruments, debt instruments, and listed/unlisted securities[15](index=15&type=chunk) - Investment decisions are authorized by the Chairman of the Board, with the Treasury Department responsible for overall execution, tracking investment performance, and risk management[15](index=15&type=chunk) [Foreign Exchange Risk and Material Investments](index=42&type=section&id=Foreign%20Exchange%20Risk%20and%20Material%20Investments) The Group's revenue and expenses are primarily RMB-denominated, with cash in RMB and HKD, and currently no foreign currency hedging policy; no material investments, acquisitions, or disposals occurred during the period, but the Group will actively seek future investment opportunities - Most of the Group's revenue and expenses are denominated in **RMB**, and most cash and bank deposits are denominated in **RMB and HKD**, with **no foreign currency hedging policy** currently in place[17](index=17&type=chunk) - For the six months ended June 30, 2023, the Company did not undertake any **material investments, acquisitions, or disposals** of subsidiaries, associates, or joint ventures[18](index=18&type=chunk) - The Group will strive to adapt to rapidly changing market conditions and actively seek investment opportunities to broaden its revenue base and enhance future financial performance[18](index=18&type=chunk) [Dividends, Contingent Liabilities and Pledged Assets](index=42&type=section&id=Dividends%2C%20Contingent%20Liabilities%20and%20Pledged%20Assets) The Board does not recommend an interim dividend for the six months ended June 30, 2023, and as of that date, the Group had no material contingent liabilities, guarantees, pending litigations, or pledged assets - The Board does not recommend the payment of an interim dividend for the six months ended **June 30, 2023**[57](index=57&type=chunk) - As of June 30, 2023, the Group had **no material contingent liabilities, guarantees, or pending litigations**[58](index=58&type=chunk) - As of June 30, 2023, and December 31, 2022, the Group had **no pledged assets**[59](index=59&type=chunk) [Employees and Remuneration Policy](index=42&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group employed 1,757 staff, an increase from December 31, 2022, with remuneration policies aligned with market practices and reviewed to ensure competitiveness based on individual performance and experience - As of June 30, 2023, the Group employed a total of **1,757 employees** (December 31, 2022: 1,350 employees)[60](index=60&type=chunk) - Remuneration policies are consistent with prevailing market practices, determined based on individual employee performance and experience, and continuously reviewed to ensure **market competitiveness**[60](index=60&type=chunk) [Events After Reporting Period](index=42&type=section&id=Events%20After%20Reporting%20Period) No significant events impacting the Group have occurred after June 30, 2023, other than those disclosed in this interim report - Other than those disclosed in this interim report, no significant events affecting the Group have occurred after **June 30, 2023**[195](index=195&type=chunk) [Corporate Governance and Other Information](index=43&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the Group's adherence to corporate governance standards, including compliance with codes, audit committee functions, and information on directors', major shareholders', and share scheme interests [Corporate Governance Code and Model Code for Securities Transactions](index=43&type=section&id=Corporate%20Governance%20Code%20and%20Model%20Code%20for%20Securities%20Transactions) The company is committed to high corporate governance standards, complying with all applicable code provisions of the Listing Rules Appendix 14 and the Model Code for Securities Transactions by Directors and Relevant Employees for the six months ended June 30, 2023 - The Company has complied with all applicable code provisions of the Corporate Governance Code and Corporate Governance Report set out in **Appendix 14 of the Listing Rules**[198](index=198&type=chunk) - Directors and relevant employees have complied with the Model Code for Securities Transactions by Directors and Relevant Employees for the six months ended **June 30, 2023**[199](index=199&type=chunk) [Audit Committee](index=43&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors and chaired by Mr. Wong Wai Tak, is responsible for reviewing and overseeing the Group's financial reporting, risk management, and internal control systems, and has reviewed this interim report - The Audit Committee comprises three independent non-executive directors: **Mr. Wong Wai Tak (Chairman)**, Mr. Yang Xuezhi, and Ms. Yan Jiamin[199](index=199&type=chunk) - The Audit Committee has reviewed the Group's unaudited consolidated financial statements for the six months ended June 30, 2023, and this interim report, and met with the independent auditor, **PricewaterhouseCoopers**[206](index=206&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=43&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2023, neither the Company nor its subsidiaries or consolidated affiliated entities purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2023, neither the Company nor any of its subsidiaries or consolidated affiliated entities purchased, sold, or redeemed any of the Company's **listed securities**[200](index=200&type=chunk) [Directors' and Chief Executive's Interests in Shares](index=44&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares) As of June 30, 2023, directors and chief executives held interests in the company's shares, with Mr. Chen Qiyuan holding 39.42% through controlled corporations and Mr. Qi Mingzhi beneficially owning 2.31% Directors' and Chief Executive's Long Positions in the Company (As of June 30) | Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of the Company's Shareholding | | :--- | :--- | :--- | :--- | | Mr. Chen Qiyuan | Interest in controlled corporation | 219,130,000 | 39.42% | | Mr. Qi Mingzhi | Beneficial owner | 12,818,000 | 2.31% | Directors' and Chief Executive's Long Positions in Shenzhen Thinkol Culture Education Technology Development Co., Ltd. (As of June 30) | Name | Capacity/Nature of Interest | Amount of Registered Capital Held (RMB) | Approximate Percentage of Equity | | :--- | :--- | :--- | :--- | | Mr. Chen Qiyuan | Beneficial owner | 7,800,000 | 39% | [Substantial Shareholders' Interests in Shares](index=45&type=section&id=Substantial%20Shareholders%27%20Interests%20in%20Shares) As of June 30, 2023, substantial shareholders Tiansheng and Yuxiq International each held 39.42% of the company's equity, with Yuxiq International wholly owned by Executive Director and controlling shareholder Mr. Chen Qiyuan Substantial Shareholders' Interests in Shares and Underlying Shares (As of June 30) | Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of the Company's Shareholding | | :--- | :--- | :--- | :--- | | Tiansheng | Beneficial owner | 219,130,000 | 39.42% | | Yuxiq International | Interest in controlled corporation | 219,130,000 | 39.42% | - Tiansheng is owned by Yuxiq International with **100 voting shares**, and Yuxiq International is wholly owned by Mr. Chen Qiyuan, an Executive Director and controlling shareholder of the Company[213](index=213&type=chunk) [Share Option Scheme and Share Award Scheme](index=45&type=section&id=Share%20Option%20Scheme%20and%20Share%20Award%20Scheme) The Share Option Scheme, approved by shareholders on June 3, 2019, aims to incentivize employees and has a ten-year validity, while the Share Award Scheme, adopted on December 28, 2020, has seen the trustee purchase shares for future awards - The Share Option Scheme was approved and adopted by shareholders on **June 3, 2019**, and became effective upon the listing of shares, aiming to provide **long-term incentives** to selected participants[215](index=215&type=chunk) - The Share Option Scheme has a validity period of **ten years**, with approximately **five years and ten months** remaining as of the date of this interim report[218](index=218&type=chunk) Details of Movements in Share Option Scheme (For the six months ended June 30) | Name/Category of Grantee | Date of Grant | Exercise Price Per Share (HKD) | January 1, 2023 | Granted during the period | Exercised during the period | Lapsed/Cancelled during the period | Outstanding at June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Employees of the Group | February 6, 2023 | 1.62 | — | 27,785,000 | — | — | 27,785,000 | - The Share Award Scheme was approved and adopted by the Board on **December 28, 2020**; the trustee has purchased a total of **11,481,000 shares**, of which **7,281,000 shares** have been awarded to selected participants and **4,200,000 shares** are held by the trustee[224](index=224&type=chunk)[225](index=225&type=chunk) [Structured Contracts](index=47&type=section&id=Structured%20Contracts) Due to PRC legal restrictions on equity structures in education, the Group controls its PRC operating entities through structured contracts, has taken steps to meet qualification requirements, and monitors the potential impact of the Foreign Investment Law on these arrangements - Given PRC legal restrictions on the equity structure of businesses engaged by the Group, it controls its PRC operating entities and derives economic benefits through **structured contracts**[226](index=226&type=chunk)[228](index=228&type=chunk) - The Group has taken specific steps to demonstrate compliance with qualification requirements, including preparing to launch tutoring centers in Hong Kong and obtaining school registration certificates[235](index=235&type=chunk) - The Foreign Investment Law does not explicitly define contractual arrangements as foreign investment, but it may be considered a form of foreign investment in the future, creating **uncertainty for structured contracts**[232](index=232&type=chunk)[237](index=237&type=chunk) - For the six months ended June 30, 2023, and up to the date of this report, the structured contracts are **legally enforceable** and do not violate existing PRC laws and regulations[233](index=233&type=chunk) [Definitions](index=50&type=section&id=Definitions) This section provides a comprehensive glossary of key terms used throughout the report to ensure clarity and consistent understanding [Definitions of Terms](index=50&type=section&id=Definitions%20of%20Terms) This chapter defines key terms used in the report, such as Stock Exchange, Board, Corporate Governance Code, Company, COVID-19, Directors, Group, IFRS, Listing Rules, Model Code, PRC, Prospectus, Share Award Scheme, Scheme Rules, SFO, Shareholders, Shares, Share Option Scheme, Tiansheng, Trustee, Trust Deed, and Yuxiq International - This chapter provides definitions for key terms used in the report, such as 'Stock Exchange' referring to The Stock Exchange of Hong Kong Limited, and 'the Group' referring to the Company and its subsidiaries and consolidated affiliated entities[240](index=240&type=chunk)[241](index=241&type=chunk)