Key Points Industry and Company Overview - **Company**: Skarlo Education - **Industry**: Education, specifically after-school tutoring and training - **Location**: Focus on Shenzhen and Guangdong Province, with plans to expand to Guangzhou Growth and Expansion - **Shenzhen Expansion**: Over 145 campuses in Shenzhen, with plans to open 10 more during the winter break, reaching 150-160 by the end of the year, a 40% increase. - **Guangzhou Expansion**: Re-entry into the Guangzhou market with ongoing campus selection and headquarters renovation. Expected to start operations by the end of the year or early next year. - **Course Performance**: High school courses saw a 50% increase in revenue, and configuration growth of over 30%. Winter courses are prepared and a large promotional event was held on November 11th. Business Strategy - **New Business Lines**: Plans to add international and study abroad programs, with one international campus in Futian and plans to open 1-2 more in Nanchang and Futian. - **Profitability**: Expected to maintain a 20% profit margin for the full year of 2024, with a slight decrease in the second half due to costs associated with re-entering the Guangzhou market and opening new campuses. Market and Competition - **Market Demand**: Strong demand for after-school tutoring and training, with a focus on middle and low-income families. - **Competition**: Industry remains fragmented, with both small independent institutions and large chains operating. Skarlo Education has a competitive advantage as a regulated chain institution. Policy and Regulations - **Policy Stability**: Stable policies in Guangdong Province, with higher barriers to entry for non-disciplinary training institutions. - **Beijing Policy**: Positive signal for the industry's healthy development, with detailed guidelines for the application of licenses and the division of responsibilities between city and district education bureaus. Financial Performance - **Revenue Growth**: Revenue growth of about 2 percentage points compared to last year, with an increase of 5 percentage points announced, but slightly lower due to discounts for early enrollment or multiple subject enrollment. - **Profitability**: Profit margin in the first half of the year was stable compared to the same period last year, but slightly lower in the second half due to increased costs associated with re-entering the Guangzhou market and opening new campuses. Future Outlook - **Guangzhou Market**: Expected to start operations in January 2025, with a focus on full-grade, full-subject experience classes and high school B classes. Plans to expand the Guangzhou market over one year and contribute to overall business growth from 2026 onwards. - **Long-term Growth**: Focus on expanding the Guangzhou market, improving product and teaching quality, and consolidating and expanding the Greater Bay Area market.

Summary of Conference Call Company and Industry Overview - The conference call involved a discussion about the company "思考乐" (Thinker Education) and its operations in the K-12 education sector, particularly focusing on the competitive landscape in Shenzhen and Guangzhou [1][2][3]. Key Points and Arguments 1. **Expansion Plans**: The company currently operates over 145 locations in Shenzhen and plans to open approximately 10 new locations during the winter break, aiming for a total of 150-160 locations by the end of 2024, representing over 40% growth compared to the previous year [1][2]. 2. **Market Recovery in Guangzhou**: The company is preparing to re-enter the Guangzhou market by the end of this year, with site selection and renovations already underway [1][2]. 3. **Course Performance**: The company reported over 50% growth in high school tuition collections year-on-year, with overall course revenue growth exceeding 30% [2][4]. 4. **Competitive Landscape**: The education market in Guangdong is described as stable, with a mix of established players and new entrants. The company is observing changes in parental spending behavior due to economic conditions [3][4][8]. 5. **Regulatory Environment**: Recent policy changes in Beijing regarding private education are seen as positive for the industry, promoting healthy and orderly development [6][7]. 6. **Demand Trends**: There is a growing demand for educational services, particularly among students facing high school entrance exams, with an expected increase in the number of students participating in training programs [9][10]. 7. **High School Segment Growth**: The high school segment is projected to contribute 18-20% of total revenue in 2024, with expectations to exceed 20% in subsequent years [19]. 8. **Financial Health**: The company maintains a healthy financial position, with over 500 million to 600 million in cash reserves, and is considering dividend distributions if conditions allow [19][20]. 9. **Future Outlook**: The company aims to strengthen its presence in Guangzhou and enhance its service offerings, leveraging its experienced team to capture market share [21][22]. Additional Important Insights - **Pricing Strategy**: The average course price has increased by approximately 2% year-on-year, with discounts offered for early registrations and multi-course enrollments [12]. - **Operational Efficiency**: The company is focusing on increasing the capacity of existing locations while also expanding its network, indicating a balanced growth strategy [10][11]. - **Impact of Small Institutions**: The presence of smaller, unregulated institutions (referred to as "小黑班") is acknowledged, but the company believes its compliance and quality of service will attract parents back to formal institutions [16][17]. This summary encapsulates the key discussions and insights from the conference call, highlighting the company's strategic direction, market dynamics, and financial health.

Financial Performance - Revenue for the six months ended June 30, 2024, reached RMB 399,113,000, representing a 58.8% increase from RMB 251,323,000 in the same period of 2023[8]. - Operating profit increased to RMB 113,819,000, up 129.2% from RMB 49,656,000 year-over-year[8]. - Profit attributable to owners for the period was RMB 82,652,000, a 92.5% increase compared to RMB 42,938,000 in the previous year[8]. - Basic earnings per share rose to RMB 15.21, reflecting a 96.8% increase from RMB 7.73 in the prior period[9]. - Adjusted profit attributable to owners was RMB 93,542,000, marking a 101.1% increase from RMB 46,511,000 year-over-year[8]. - The group's operating profit for the six months ended June 30, 2024, was RMB 113.8 million, with total revenue increasing by 58.8% to RMB 399.1 million compared to RMB 251.3 million for the same period last year[11][16]. - The net profit attributable to owners for the six months ended June 30, 2024, was RMB 82.7 million, up from RMB 42.9 million in the same period last year, primarily due to increased tutoring hours and improved operational efficiency[11]. - The gross profit increased by 70.2% to RMB 177.1 million, with the gross margin rising from 41.4% to 44.4%[21]. - The group's profit before tax increased by 132.5% from RMB 46.9 million for the six months ended June 30, 2023, to RMB 109.0 million for the six months ending June 30, 2024[30]. - Income tax expenses rose by 506.8% from RMB 4.4 million for the six months ended June 30, 2023, to RMB 26.8 million for the six months ending June 30, 2024, primarily due to an increase in taxable profit[31]. Operational Strategies - The company aims to diversify its offerings, including educational tourism and international courses, to broaden its revenue base[6]. - Future strategies include expanding into new markets and enhancing product offerings to meet diverse student needs[6]. - The group continues to focus on student-centered teaching methods, with class sizes typically not exceeding 20 students[6]. - The group is committed to providing quality after-school care services, ensuring a safe and nurturing environment for students[6]. - The group launched educational tourism and international courses starting July 2023, aiming to broaden its revenue base for long-term development[12]. Market and Growth Outlook - The company plans to continue expanding its market presence and investing in new product development to drive future growth[52]. - The company is expected to continue its growth trajectory in the private education sector, leveraging its strong market position in Guangdong Province[83]. - The company plans to actively seek investment opportunities to enhance its revenue base and improve future financial performance[43]. - The company is expanding its market presence in Southeast Asia, targeting a 15% market share by 2025[165]. - New product launches are expected to contribute an additional $50 million in revenue by the end of 2024[165]. Financial Position and Liquidity - Total equity as of June 30, 2024, was RMB 532.1 million, up from RMB 453.4 million as of December 31, 2023[39]. - Cash and cash equivalents increased by 7.7% from RMB 256.5 million to RMB 276.2 million during the same period[39]. - The group's current liabilities amounted to RMB 459.3 million as of June 30, 2024, compared to RMB 450.8 million as of December 31, 2023[39]. - The debt-to-equity ratio was 5.6% as of June 30, 2024, compared to 0% as of December 31, 2023, indicating the introduction of bank borrowings[39]. - The company reported a net cash flow from operating activities for the six months ended June 30, 2024, of RMB 41,699,000, a significant improvement compared to a cash outflow of RMB 7,561,000 in the same period of 2023[69]. - The company’s cash flow from interest received increased to RMB 2,461,000, up from RMB 792,000 in the previous year, indicating improved financial management[69]. - The group maintained a cash reserve and utilized bank financing to mitigate liquidity risk, with no significant liquidity risk identified by the board[77]. Shareholder and Governance Matters - The board does not recommend the payment of an interim dividend for the six months ending June 30, 2024, consistent with the previous year[44]. - The company has complied with all applicable corporate governance codes as of June 30, 2024[139]. - The company has established an audit committee to oversee financial reporting and risk management[140]. - The company’s share repurchase is expected to enhance earnings per share and increase net asset value per share for shareholders[141]. Employee and Compensation - The company has acquired a total of 1,540,000 shares at a total cost of HKD 6,977,000 (approximately RMB 6,370,000) under the share incentive plan[48]. - The total share-based payment expense recognized for the six months ended June 30, 2024, is approximately RMB 13,930,000, compared to RMB 4,477,000 for the same period in 2023[129]. - The total number of stock options that are vested and exercisable as of June 30, 2024, is 9,169,050[124]. Risk Management - The group’s financial risk management plan focuses on minimizing market risks, including foreign exchange and interest rate risks[76]. - The group has not experienced any significant changes in risk management functions or policies since December 31, 2023[76]. - The group plans to conduct annual assessments of the fair value of Level 3 financial instruments, seeking external valuation experts as necessary[82]. Research and Development - Research and development expenses increased by 21.3% to RMB 10.6 million, driven by higher personnel costs in R&D[25]. - Research and development expenses increased by 10% to $20 million, focusing on innovative educational technologies[165].

Investment Rating - The investment rating for the company is "Buy" with a current price of 5.86 HKD and a target value of 6.23 HKD [1]. Core Insights - The company reported a strong performance in the first half of 2024, achieving revenue of 400 million RMB, a year-on-year increase of 58.8%. The gross margin was 44.4%, and net profit reached 82.65 million RMB, up 92.5% year-on-year. Adjusted net profit was 93.54 million RMB, reflecting a 101.1% increase, exceeding market expectations [2]. - The significant growth in student enrollment supported the impressive revenue performance, with contract liabilities showing strong results, providing solid support for the full-year performance. The non-academic quality courses generated revenue of 370 million RMB, a year-on-year increase of 57.8%, while tutoring courses achieved revenue of 32.58 million RMB, up 70.6%. The number of enrolled students reached 184,000, a 58.2% increase year-on-year, with total class hours at 4.564 million, also up 58.1%. Contract liabilities at the end of the first half of 2024 were 250 million RMB, a 93.2% increase year-on-year, laying a strong foundation for revenue in the second half and future renewals [2]. - The improvement in operational efficiency has led to enhanced profitability, with a gross margin of 44.38%, an increase of 3.0 percentage points year-on-year. The sales and management expense ratios were 1.6% and 16.7%, respectively, down 0.4 and 6.8 percentage points year-on-year, benefiting from an optimized competitive landscape and improved operational efficiency. The adjusted net profit margin was 23.4%, up 4.9 percentage points year-on-year [2]. - The company is pursuing long-term development through diversification in non-academic areas, having launched educational tourism and international courses since July 2023. The company aims to strengthen its "LeXue" brand, which includes art, sports, painting, performance, calligraphy, scientific literacy, traditional culture, logical thinking training, and international literacy, to promote comprehensive diversification in the future [2]. - Based on the strong performance in the first half of 2024, the profit forecast has been adjusted upwards. The expected adjusted net profits for 2024-2026 are 170 million RMB, 240 million RMB, and 310 million RMB, respectively. The company is given a 22x PE valuation for 2024, resulting in a target value of 6.23 HKD per share [2]. Financial Summary - The company's main revenue for 2024 is projected to be 852 million RMB, with a growth rate of 49.3%. The adjusted net profit is expected to be 174 million RMB, reflecting a growth rate of 60.9% [3]. - The gross margin is expected to remain strong, with a projected rate of 44.0% in 2024, and the adjusted net profit margin is expected to be 20.4% [9]. - The company's return on equity (ROE) is projected to be 28.2% in 2024, indicating strong profitability [9].

Investment Rating - The report assigns an "Outperform" rating to the company, indicating a positive outlook compared to the market benchmark [2][3]. Core Insights - The company has shown significant growth in its non-academic education products, with a revenue of 399 million RMB in H1 2024, representing a year-on-year increase of 58.8% [2]. - The adjusted net profit for the same period reached 94 million RMB, reflecting a 101.1% increase year-on-year, driven by effective cost management and expansion of its school network [2][3]. - The company opened 35 new branches in H1 2024, bringing the total to 145, which supports its growth strategy in the education sector [2]. - The contract liabilities increased by 93.2% year-on-year to 249 million RMB, indicating strong future revenue potential [2]. - The company has initiated new business lines in educational tourism and international courses, which are expected to contribute to future revenue growth [2]. Financial Summary - For the fiscal years 2024 to 2026, the company is projected to achieve revenues of 843 million RMB, 1.15 billion RMB, and 1.54 billion RMB, respectively, with corresponding adjusted net profits of 174 million RMB, 238 million RMB, and 324 million RMB [3][5]. - The gross margin is expected to improve from 41.8% in 2023 to 44.5% by 2026, reflecting enhanced operational efficiency [5]. - The company's net profit margin is projected to increase from 15.1% in 2023 to 19.7% in 2026, indicating a positive trend in profitability [5].

港股公司报告 | 公司点评 | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------- ...

2024 年 08 月 16 日 思考乐教育（1769.HK） 上半年业绩大幅增长，盈利改善 思考乐教育是中国华南地区领先民办教育服务提供商，成立于 2012 年。双减后公 司调整经营战略，聚焦素质教育和高中辅导业务。23 年开始快速扩张，截至 24 上 半年公司拥有学习中心超过 145 家，并且业绩得到显著恢复与提升。我们看好其未 来成长空间，建议关注。 报告摘要 上半年净利润大幅增长。2024 年上半年公司收入达到 4.0 亿，同比增长 58.8%，归母净利润达到 0.8 亿，同比增长 92.5%，经调整归母净利润 0.9 亿， 同比增长 101.1%。调整项主要为员工股权激励费用 0.1 亿元。公司毛利率达到 44.4%，同比提升 3 个百分点，经调整净利率为 23.4%，同比提升 4.9 个百分 点。盈利能力提升是因为思考乐的营运效率提升，以及教培行业经过双减后处 在快速复苏中，行业竞争与价格竞争趋缓，租金成本大幅减少等。 各项业务均处于快速发展中。目前思考乐在深圳市拥有最多的牌照数，学习中 心超过 145 家，同比增长 57.6%。分业务看，非学业素质课程收入 3.7 亿，同 比增长 57.8%，辅 ...

Investment Rating - The report maintains an "Accumulate" rating for the company [2][9]. Core Views - The company's performance in H1 2024 met prior forecasts, with core results exceeding expectations driven by operational improvements, including increased store count, higher average transaction value, and enhanced employee productivity [2]. - The non-academic quality business segment significantly contributed to revenue growth, accounting for 92% of total revenue, with a 58% year-on-year increase [2]. - The company is projected to achieve adjusted net profits of 178 million, 249 million, and 330 million yuan for 2024, 2025, and 2026 respectively, with EPS estimates of 0.32, 0.44, and 0.58 yuan [2]. Financial Summary - For H1 2024, the company reported revenue of 399 million yuan, a 59% increase year-on-year, and a gross profit of 177 million yuan, reflecting a 70% increase [2]. - The gross margin improved to 44%, up 3 percentage points, while the adjusted net profit margin reached 23.44%, an increase of 4.93 percentage points [2]. - The number of students served increased by 57% to 169,700, with total class hours rising by 57% to 4.2029 million [2]. - The company’s employee count grew by 48% to 2,603, with revenue per employee increasing by 7% to 150,000 yuan [2][5].

Summary [Financial Summary](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) Sikale Education Group's unaudited interim results for the six months ended June 30, 2024, show significant growth in revenue, operating profit, profit attributable to owners, and earnings per share 2024 H1 Key Financial Data (Unaudited) | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | 399,113 | 251,323 | 147,790 | 58.8% | | Operating Profit | 113,819 | 49,656 | 64,163 | 129.2% | | Profit for the period attributable to owners | 82,652 | 42,938 | 39,714 | 92.5% | | Adjusted profit for the period attributable to owners | 93,542 | 46,511 | 47,031 | 101.1% | | Basic EPS (RMB cents) | 15.21 | 7.73 | 7.48 | 96.8% | | Diluted EPS (RMB cents) | 14.76 | 7.66 | 7.10 | 92.7% | | Adjusted Basic EPS (RMB cents) | 17.21 | 8.37 | 8.84 | 105.6% | | Adjusted Diluted EPS (RMB cents) | 16.71 | 8.29 | 8.42 | 101.6% | Non-IFRS Measures [Adjusted Profit for the Period Attributable to Owners](index=2&type=section&id=%E6%8B%A5%E6%9C%89%E4%BA%BA%E5%BA%94%E5%8D%A0%E6%9C%9F%E5%86%85%E7%BB%8F%E8%B0%83%E6%95%B4%E6%BA%A2%E5%88%A9) The company defines adjusted profit attributable to owners as profit for the period excluding non-operating performance items like share option benefit expenses, to accurately assess the Group's financial performance - Share option benefit expenses increased by **204.8%** from **RMB 3.6 million** in 2023 to **RMB 10.9 million** in 2024[2](index=2&type=chunk) - Adjusted profit for the period attributable to owners increased by **101.1%** year-on-year to **RMB 93.542 million**[2](index=2&type=chunk) [Adjusted Earnings Per Share](index=3&type=section&id=%E7%BB%8F%E8%B0%83%E6%95%B4%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Adjusted earnings per share provides investors with a clearer measure of operating performance by excluding non-cash expenses such as share option benefit expenses - Adjusted basic earnings per share increased by **105.6%** from **RMB 8.37 cents** in 2023 to **RMB 17.21 cents** in 2024[4](index=4&type=chunk) - Adjusted diluted earnings per share increased by **101.6%** from **RMB 8.29 cents** in 2023 to **RMB 16.71 cents** in 2024[6](index=6&type=chunk) - The weighted average number of shares used to calculate adjusted diluted earnings per share slightly decreased from **560,864,000 shares** in 2023 to **559,942,000 shares** in 2024 due to share option adjustments[6](index=6&type=chunk) Management Discussion and Analysis [Performance Overview](index=5&type=section&id=%E4%B8%9A%E7%BB%A9%E6%A6%82%E8%A7%88) The Group's core business remains profitable, with significant growth in revenue and net profit driven by business transformation and the vigorous development of non-academic quality courses - Operating profit reached **RMB 113.8 million**[7](index=7&type=chunk) - Revenue from quality-oriented courses increased from **RMB 232.2 million** in the prior period to **RMB 366.5 million**, with related tutoring class hours increasing from **2,675,300** to **4,202,896**[7](index=7&type=chunk) - Total revenue increased by **58.8%** year-on-year to **RMB 399.1 million**[7](index=7&type=chunk) - Net profit attributable to owners increased by **92.5%** year-on-year to **RMB 82.7 million**, primarily due to increased tutoring class hours and improved operating efficiency[7](index=7&type=chunk) [Future Prospects and Development Strategies](index=5&type=section&id=%E6%9C%AA%E6%9D%A5%E5%89%8D%E6%99%AF%E5%8F%8A%E5%8F%91%E5%B1%95%E7%AD%96%E7%95%A5) The Group will expand education tourism and international courses, strengthen 'Lexue' brand quality education, and actively seek new business opportunities for diversified development, while strictly controlling costs and enhancing service quality and operational efficiency - Education tourism business and international courses were launched since July 2023 to broaden the revenue base[8](index=8&type=chunk) - The Group will further strengthen quality education under the 'Lexue' brand, including art, sports, painting, performing arts, calligraphy, scientific literacy, traditional Chinese studies, logical thinking training, and international literacy[8](index=8&type=chunk) - Looking ahead, the Group will pursue comprehensive diversified development, leverage brand influence to seek new business opportunities, and continue to strictly control costs, maintain stable cash flow, and enhance service quality and operational efficiency[8](index=8&type=chunk) Financial Review [Revenue](index=6&type=section&id=%E6%94%B6%E7%9B%8A) The Group's revenue increased by **58.8%** year-on-year, primarily driven by a significant increase in total student enrollments and tutoring class hours, with non-academic quality courses contributing the most Revenue by Education Service Category | Revenue Category | 2024 (RMB thousands) | 2023 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Non-academic quality courses and other tutoring courses | 366,525 | 232,216 | 57.8% | | Tutoring courses | 32,588 | 19,107 | 70.6% | | **Total** | **399,113** | **251,323** | **58.8%** | Student Enrollments and Completed Tutoring Class Hours by Education Service Category | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Non-academic quality courses student enrollments | 169,739 | 107,908 | 57.3% | | Non-academic quality courses tutoring class hours | 4,202,896 | 2,675,300 | 57.1% | | Tutoring courses student enrollments | 14,666 | 8,622 | 70.1% | | Tutoring courses tutoring class hours | 361,356 | 212,300 | 70.2% | | **Total student enrollments** | **184,405** | **116,530** | **58.2%** | | **Total tutoring class hours** | **4,564,252** | **2,887,600** | **58.1%** | [Cost of Sales](index=7&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales increased by **50.7%** to **RMB 222.0 million**, primarily due to higher teacher salaries and right-of-use asset amortization, but the increase was lower than revenue growth, indicating improved operating efficiency - Cost of sales increased by **50.7%** to **RMB 222.0 million**[11](index=11&type=chunk) - Primarily due to increased teacher salaries and amortization of right-of-use assets, driven by learning center network expansion and business growth[11](index=11&type=chunk) - The increase in cost of sales was lower than the increase in revenue, reflecting improved operating efficiency[11](index=11&type=chunk) [Gross Profit and Gross Margin](index=7&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit increased by **70.2%** to **RMB 177.1 million**, with gross margin improving from **41.4%** to **44.4%**, reflecting enhanced profitability - Gross profit increased by **70.2%** to **RMB 177.1 million**[12](index=12&type=chunk) - Gross margin improved from **41.4%** to **44.4%**[12](index=12&type=chunk) [Selling Expenses](index=7&type=section&id=%E9%94%80%E5%94%AE%E5%BC%80%E6%94%AF) Selling expenses increased by **26.6%** to **RMB 6.5 million**, primarily due to higher student activity expenses - Selling expenses increased by **26.6%** to **RMB 6.5 million**[13](index=13&type=chunk) - Primarily due to increased student activity expenses[13](index=13&type=chunk) [Administrative Expenses](index=7&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses increased by **11.5%** to **RMB 56.2 million**, mainly due to higher administrative staff expenses, partially offset by a decrease in impairment provisions - Administrative expenses increased by **11.5%** to **RMB 56.2 million**[14](index=14&type=chunk) - Primarily due to increased administrative staff expenses, partially offset by a decrease in impairment provisions[14](index=14&type=chunk) [Research and Development Expenses](index=7&type=section&id=%E7%A0%94%E5%8F%91%E5%BC%80%E6%94%AF) Research and development expenses increased by **21.3%** to **RMB 10.6 million**, primarily due to higher R&D personnel expenses - Research and development expenses increased by **21.3%** to **RMB 10.6 million**[15](index=15&type=chunk) - Primarily due to increased R&D personnel expenses[15](index=15&type=chunk) [Other Income](index=8&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Net other income increased by **56.2%** to **RMB 6.5 million**, primarily driven by higher finance income, but partially offset by a decrease in government grants - Net other income increased by **56.2%** to **RMB 6.5 million**[16](index=16&type=chunk) - Primarily due to an increase in finance income of **RMB 3.9 million**, partially offset by a decrease in government grants of **RMB 1.1 million**[16](index=16&type=chunk) [Other Gains—Net](index=8&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E2%80%94%E5%87%80%E9%A2%9D) Net other gains decreased by **38.9%** to **RMB 3.5 million**, mainly due to net foreign exchange losses, partially offset by an increase in lease modifications - Net other gains decreased by **38.9%** to **RMB 3.5 million**[17](index=17&type=chunk) - Primarily due to a net foreign exchange loss of **RMB 0.5 million** (compared to a gain of **RMB 1.0 million** in the prior period), partially offset by an increase in lease modifications of **RMB 1.3 million**[17](index=17&type=chunk) [Finance Costs](index=8&type=section&id=%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) Finance costs increased by **73.6%** to **RMB 4.8 million**, primarily due to higher interest expenses on lease liabilities and borrowings - Finance costs increased by **73.6%** to **RMB 4.8 million**[18](index=18&type=chunk) - Primarily due to increased interest expenses on lease liabilities and borrowings[18](index=18&type=chunk) [Profit Before Income Tax](index=8&type=section&id=%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%8E%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before income tax increased by **132.5%** to **RMB 109.0 million**, indicating a significant improvement in the Group's overall profitability - Profit before income tax increased by **132.5%** to **RMB 109.0 million**[19](index=19&type=chunk) [Income Tax Expense](index=8&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense increased by **506.8%** to **RMB 26.8 million**, primarily due to a substantial increase in taxable profit - Income tax expense increased by **506.8%** to **RMB 26.8 million**[20](index=20&type=chunk) - Primarily due to increased taxable profit[20](index=20&type=chunk) [Profit for the Period Attributable to Owners](index=8&type=section&id=%E6%8B%A5%E6%9C%89%E4%BA%BA%E5%BA%94%E5%8D%A0%E6%9C%9F%E5%86%85%E6%BA%A2%E5%88%A9) Profit for the period attributable to owners increased by **92.5%** to **RMB 82.7 million**, reflecting a significant increase in value created for shareholders - Profit for the period attributable to owners increased by **92.5%** to **RMB 82.7 million**[21](index=21&type=chunk) Liquidity, Financial Resources and Capital Structure [Overview](index=9&type=section&id=%E6%A6%82%E8%A7%88) The Group's total equity and cash and cash equivalents increased, but net current assets decreased, while new bank borrowings led to an increase in the gearing ratio - Total equity increased from **RMB 453.4 million** as of December 31, 2023, to **RMB 532.1 million** as of June 30, 2024[22](index=22&type=chunk) - Cash and cash equivalents increased by **7.7%** to **RMB 276.2 million**[22](index=22&type=chunk) - Total current assets decreased from **RMB 497.1 million** to **RMB 470.0 million**, while total current liabilities increased from **RMB 450.8 million** to **RMB 459.3 million**[22](index=22&type=chunk) - New bank borrowings of **RMB 30.0 million** led to an increase in the gearing ratio from **0%** to **5.6%**[22](index=22&type=chunk) - Net current assets decreased from **RMB 46.4 million** to **RMB 10.8 million**[22](index=22&type=chunk) [Treasury Management Policy](index=9&type=section&id=%E5%BA%93%E5%8A%A1%E7%AE%A1%E7%90%86%E6%94%BF%E7%AD%96) The Group utilizes surplus cash reserves by investing in low-risk, short-term wealth management products, with strict approval and monitoring mechanisms to manage risks and optimize investment performance - Surplus cash reserves are utilized to invest in low-risk wealth management products to generate income, with investment horizons typically not exceeding one year[23](index=23&type=chunk) - Investment scope includes low-risk, capital-guaranteed unit trusts, structured deposits, money market instruments, debt instruments, and listed/unlisted securities issued by trust companies and commercial banks[23](index=23&type=chunk) - The treasury department is responsible for executing, tracking, and analyzing investment decisions, reviewing cash positions, operating cash needs, and potential investment opportunities monthly, with all investment decisions requiring approval from the Chairman of the Board[24](index=24&type=chunk) [Foreign Exchange Risk](index=10&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) Most of the Group's revenue, expenses, cash, and bank deposits are denominated in RMB and HKD, with no foreign currency hedging policy currently in place, but management will continue to monitor foreign exchange risk - Most of the Group's revenue and expenses are denominated in RMB, and most cash and bank deposits are denominated in RMB and HKD[25](index=25&type=chunk) - The Group currently has no foreign currency hedging policy, and management will continue to monitor foreign exchange risk and consider prudent measures when appropriate[25](index=25&type=chunk) [Significant Acquisitions and Disposals and Significant Investments](index=10&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84) During the reporting period, the Group did not undertake any significant investments, acquisitions, or disposals, but will actively seek future investment opportunities to broaden its revenue base and enhance profitability - For the six months ended June 30, 2024, the company did not undertake any significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[26](index=26&type=chunk) - The Group will strive to adapt to changing market conditions and actively seek investment opportunities to broaden its revenue base and enhance its future financial performance and profitability[26](index=26&type=chunk) Other Information [Dividends](index=11&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (for the six months ended June 30, 2023: nil)[27](index=27&type=chunk) [Contingent Liabilities](index=11&type=section&id=%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) At the end of the reporting period, the Group had no significant contingent liabilities, guarantees, or pending litigations - As of June 30, 2024, the Group had no significant contingent liabilities, guarantees, or any significant pending or threatened litigations or claims against any member of the Group[28](index=28&type=chunk) [Pledge of Assets](index=11&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%A8%E6%8A%BC) At the end of the reporting period, the Group had no significant pledge of assets - As of June 30, 2024, and December 31, 2023, the Group had no significant pledge of assets[29](index=29&type=chunk) [Employees and Remuneration Policy](index=11&type=section&id=%E9%9B%87%E5%91%98%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group considers employees a valuable asset, with the number of employees increasing to **2,603** as of June 30, 2024, and remuneration policies are consistent with market practices and continuously reviewed for competitiveness - As of June 30, 2024, the Group employed a total of **2,603** employees (December 31, 2023: **2,319** employees)[30](index=30&type=chunk) - Remuneration policies are consistent with prevailing market practices and determined based on individual employee performance and experience, with continuous review to ensure market competitiveness[30](index=30&type=chunk) [Post-Balance Sheet Events](index=11&type=section&id=%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) Subsequent to the reporting period, the trustee of the company's share award scheme acquired **1,540,000** shares, and **9,169,050** share options were exercised, resulting in new share issuance - Between July 3 and July 15, 2024, the trustee of the company's share award scheme acquired a total of **1,540,000** ordinary shares of the company from the market for a total consideration of **HKD 6,977,000** (equivalent to **RMB 6,370,000**)[31](index=31&type=chunk) - On July 10, 2024, **9,169,050** share options granted and vested under the share option scheme were exercised at an exercise price of **HKD 1.62** per share, resulting in the issuance and allotment of **9,169,050** new shares[31](index=31&type=chunk) Interim Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Comprehensive Income](index=12&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group achieved strong financial growth during the reporting period, with significant increases in revenue and operating profit, and profit attributable to owners growing by **92.5%** year-on-year Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 399,113 | 251,323 | | Cost of Sales | (221,975) | (147,265) | | Gross Profit | 177,138 | 104,058 | | Operating Profit | 113,819 | 49,656 | | Profit Before Income Tax | 109,003 | 46,882 | | Income Tax Expense | (26,748) | (4,408) | | Profit for the period | 82,255 | 42,474 | | Profit attributable to owners | 82,652 | 42,938 | | Basic EPS (RMB cents) | 15.21 | 7.73 | | Diluted EPS (RMB cents) | 14.76 | 7.66 | [Interim Condensed Consolidated Statement of Financial Position](index=13&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of June 30, 2024, the Group's total assets and total equity both increased, with a significant rise in non-current assets, particularly right-of-use assets, while current liabilities slightly increased Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 694,466 | 536,110 | | Total current assets | 470,023 | 497,105 | | **Total Assets** | **1,164,489** | **1,033,215** | | **Equity** | | | | Capital and reserves attributable to owners of the Company | 532,662 | 454,825 | | Non-controlling interests | (595) | (1,475) | | **Total Equity** | **532,067** | **453,350** | | **Liabilities** | | | | Total non-current liabilities | 173,163 | 129,112 | | Total current liabilities | 459,259 | 450,753 | | **Total Liabilities** | **632,422** | **579,865** | | **Total Equity and Liabilities** | **1,164,489** | **1,033,215** | - Right-of-use assets increased from **RMB 200,586 thousand** as of December 31, 2023, to **RMB 305,437 thousand** as of June 30, 2024[33](index=33&type=chunk) - Bank balances and cash decreased from **RMB 364,900 thousand** to **RMB 278,400 thousand**, while other current financial assets measured at amortized cost increased from **RMB 10,000 thousand** to **RMB 65,615 thousand**[22](index=22&type=chunk)[33](index=33&type=chunk) Notes to the Interim Condensed Consolidated Financial Information [General Information](index=15&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) Sikale Education Group was incorporated in the Cayman Islands, primarily engaged in providing private education services in China, with its ordinary shares listed on the Hong Kong Stock Exchange - The Company was incorporated in the Cayman Islands on February 7, 2018, primarily engaged in providing private education services in China[35](index=35&type=chunk) - The Company's ordinary shares were listed on The Stock Exchange of Hong Kong Limited on June 21, 2019[35](index=35&type=chunk) [Basis of Preparation](index=15&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86) The interim financial information is prepared in accordance with IAS 34 and should be read in conjunction with the annual financial statements, with the Group continuing to adopt the going concern basis - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' issued by the International Accounting Standards Board[36](index=36&type=chunk) - This interim condensed consolidated financial information should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2023, prepared in accordance with IFRS[36](index=36&type=chunk) - The Directors believe that the Group's existing funding sources are sufficient to meet its financial obligations for the next 12 months, thus continuing to adopt the going concern basis[36](index=36&type=chunk) [Accounting Policies](index=16&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The financial information for this period applies the same accounting policies as the 2023 annual financial statements, with the adoption of new and revised IFRS standards not expected to have a significant impact - The accounting policies applied in this financial information are consistent with those applied in the 2023 financial statements, except for the adoption of new and revised standards[38](index=38&type=chunk) - New and revised standards adopted include amendments to IAS 1 and IFRS 16, among others[39](index=39&type=chunk) - The adoption of new and revised standards and interpretations is not expected to have a significant impact on the interim condensed consolidated financial information[41](index=41&type=chunk) [Financial Risk Management](index=17&type=section&id=%E8%B4%A2%E5%8A%A1%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group faces market, credit, and liquidity risks, managed through sufficient cash, bank financing, and low-risk investments, with fair values regularly assessed [Financial Risk Factors](index=17&type=section&id=%E8%B4%A2%E5%8A%A1%E9%A3%8E%E9%99%A9%E5%9B%A0%E7%B4%A0) The Group's activities are exposed to market risks (including foreign exchange and interest rate risks), credit risk, and liquidity risk, with an overall risk management plan aiming to minimize financial market unpredictability - The Group's activities are exposed to various financial risks: market risk (including foreign exchange risk and cash flow and fair value interest rate risk), credit risk, and liquidity risk[43](index=43&type=chunk) - There have been no significant changes in risk management functions or any risk management policies since December 31, 2023[43](index=43&type=chunk) [Liquidity Risk](index=17&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E9%A3%8E%E9%99%A9) The Group manages liquidity risk by holding sufficient cash and bank balances and utilizing bank financing, with Directors believing there is no significant liquidity risk - The Group manages liquidity risk by holding sufficient cash and bank balances, further mitigating it by maintaining cash reserves and utilizing bank financing[44](index=44&type=chunk) Maturity Analysis of Financial Liabilities | Liability Category | 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) | | :--- | :--- | :--- | :--- | :--- | :--- | | **June 30, 2024** | | | | | | | Trade payables | 3,204 | — | — | — | 3,204 | | Other payables | 13,876 | — | — | — | 13,876 | | Borrowings | 30,769 | — | — | — | 30,769 | | Lease liabilities | 79,307 | 67,505 | 104,282 | 43,333 | 294,427 | | **Total** | **127,156** | **67,505** | **104,282** | **43,333** | **342,276** | | **December 31, 2023** | | | | | | | Trade payables | 2,967 | — | — | — | 2,967 | | Other payables | 14,195 | — | — | — | 14,195 | | Lease liabilities | 58,478 | 49,960 | 83,099 | 137,617 | 329,154 | | **Total** | **75,640** | **49,960** | **83,099** | **137,617** | **346,316** | [Fair Value Estimation](index=18&type=section&id=%E5%85%AC%E5%85%81%E4%BB%B7%E5%80%BC%E4%BC%B0%E8%AE%A1) The Group's financial instruments measured at fair value are categorized into three levels based on valuation technique inputs, with regular valuation management and external expert assistance when necessary - Financial instruments measured at fair value are categorized into three levels based on valuation technique inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[46](index=46&type=chunk) Fair Value Hierarchy Analysis of Financial Instruments | Financial Instruments | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | **June 30, 2024** | | | | | | Wealth management products | — | — | 75,092 | 75,092 | | Listed equity investments in Mainland China | 2,345 | — | — | 2,345 | | Unlisted equity investments in Mainland China | — | — | 47,319 | 47,319 | | **Total** | **2,345** | **—** | **122,411** | **124,756** | | **December 31, 2023** | | | | | | Wealth management products | — | — | 98,672 | 98,672 | | Listed equity investments in Mainland China | 2,979 | — | — | 2,979 | | Unlisted equity investments in Mainland China | — | — | 47,769 | 47,769 | | **Total** | **2,979** | **—** | **146,441** | **149,420** | - Fair value estimation for Level 3 instruments is primarily based on quotes from financial institutions and market approaches, using various applicable valuation methods, including discounted cash flow[48](index=48&type=chunk) [Revenue and Segment Information](index=19&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group primarily operates private education services in Guangdong Province, China, treating it as a single operating segment, with revenue mainly derived from private education services during the reporting period - The Group's primary operating decision-maker (the Board) reviews consolidated results and considers the Group to operate and be managed as a single operating segment for private education services for the six months ended June 30, 2024[49](index=49&type=chunk) - The Group's main market is Guangdong Province, China, with most revenue and operating profit derived from Guangdong Province[49](index=49&type=chunk) - Revenue from private education services and other income amounted to **RMB 399,113 thousand** (2023: **RMB 251,323 thousand**)[50](index=50&type=chunk) [Other Income](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income primarily consists of finance income, operating lease rental income, and government grants, with finance income significantly increasing in the current period Details of Other Income | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Net sub-lease income | 166 | 354 | | Rental income from operating leases | 1,226 | 1,467 | | Finance income | 4,645 | 792 | | Government grants | 419 | 1,521 | | **Total** | **6,456** | **4,134** | [Other Gains—Net](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E2%80%94%E5%87%80%E9%A2%9D) Net other gains primarily include fair value gains on financial assets at fair value through profit or loss, lease modifications, and foreign exchange gains/losses, with foreign exchange shifting from a gain to a loss in the current period Details of Other Gains—Net | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss | 3,491 | 3,669 | | Lease modifications | 1,601 | 279 | | Net gains/(losses) on disposal of property, plant and equipment | 41 | (20) | | Deposit losses | (361) | (226) | | Compensation expenses | (444) | (115) | | Fair value losses on investment properties | (620) | (400) | | Net foreign exchange (losses)/gains | (501) | 980 | | Others | 286 | 1,551 | | **Total** | **3,493** | **5,718** | [Expenses by Nature](index=21&type=section&id=%E6%8C%89%E6%80%A7%E8%B4%A8%E5%88%92%E5%88%86%E4%B9%8B%E5%BC%80%E6%94%AF) The Group's main expenses are employee benefit expenses, depreciation, and amortization, with employee benefit expenses significantly increasing in the current period Details of Expenses by Nature | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Employee benefit expenses | 219,650 | 147,712 | | Depreciation and amortization | 36,153 | 28,441 | | Property management expenses | 6,372 | 3,081 | | Teaching materials | 5,346 | 3,689 | | Advertising and exhibition expenses | 4,247 | 4,247 | | Maintenance costs | 2,870 | 1,569 | | Professional service fees | 2,393 | 3,336 | | Office expenses | 2,321 | 2,827 | | Utilities | 2,028 | 1,370 | | Other taxes | 1,721 | 1,192 | | Auditor's remuneration | 650 | 650 | | Impairment provisions | 398 | 3,794 | | Others | 11,094 | 8,235 | | **Total** | **295,243** | **211,519** | [Finance Costs](index=21&type=section&id=%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) Finance costs primarily consist of interest expenses on lease liabilities, significantly increasing in the current period due to higher interest expenses on borrowings Details of Finance Costs | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Interest expense on borrowings | 350 | — | | Interest expense on lease liabilities | 4,466 | 2,774 | | **Total** | **4,816** | **2,774** | [Income Tax Expense](index=21&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense significantly increased, primarily due to a substantial rise in current tax on profit for the period Details of Income Tax Expense | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Current tax—current tax on profit for the period | 28,961 | 3,830 | | Deferred income tax—deferred income tax (decrease)/increase | (2,213) | 578 | | **Income Tax Expense** | **26,748** | **4,408** | [Earnings Per Share](index=22&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Both basic and diluted earnings per share achieved substantial growth, reflecting the Group's enhanced profitability [Basic Earnings Per Share](index=22&type=section&id=%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E7%9B%88%E5%88%A9) Basic earnings per share is calculated by dividing profit attributable to owners by the weighted average number of ordinary shares outstanding, showing significant growth in the current period Basic Earnings Per Share Calculation | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 82,652 | 42,938 | | Weighted average number of ordinary shares in issue (thousands) | 543,391 | 555,515 | | **Basic EPS (RMB cents per share)** | **15.21** | **7.73** | [Diluted Earnings Per Share](index=22&type=section&id=%E6%AF%8F%E8%82%A1%E6%91%8A%E8%96%84%E7%9B%88%E5%88%A9) Diluted earnings per share considers the dilutive effect of potential ordinary shares, such as share options, also achieving substantial growth in the current period Diluted Earnings Per Share Calculation | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | **Diluted EPS (RMB cents per share)** | **14.76** | **7.66** | | Weighted average number of ordinary shares used as denominator for basic EPS | 543,391,000 | 555,515,000 | | Adjustments for diluted EPS: share options | 16,551,000 | 5,349,000 | | Weighted average number of ordinary shares and potential ordinary shares used as denominator for diluted EPS | 559,942,000 | 560,864,000 | [Right-of-Use Assets and Leases](index=23&type=section&id=%E4%BD%BF%E7%94%A8%E6%9D%83%E8%B5%84%E4%BA%A7%E5%8F%8A%E7%A7%9F%E8%B5%81) The Group's right-of-use assets and lease liabilities both increased, reflecting expanded leasing activities, with corresponding rises in depreciation expenses and lease finance costs Right-of-Use Assets and Lease Liabilities | Category | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | **Right-of-use assets** | | | | Land use rights | 74,067 | 43,594 | | Properties | 231,370 | 156,992 | | **Total** | **305,437** | **200,586** | | **Lease liabilities** | | | | Current | 70,405 | 50,899 | | Non-current | 165,117 | 124,186 | | **Total** | **235,522** | **175,085** | - Depreciation expense for right-of-use assets increased from **RMB 22,241 thousand** in 2023 to **RMB 27,874 thousand** in 2024[61](index=61&type=chunk) - Lease finance costs increased from **RMB 2,774 thousand** in 2023 to **RMB 4,466 thousand** in 2024[61](index=61&type=chunk) - Cash outflow from lease financing activities increased from **RMB 21,504 thousand** in 2023 to **RMB 31,962 thousand** in 2024[62](index=62&type=chunk) [Share Capital](index=24&type=section&id=%E8%82%A1%E6%9C%AC) As of the end of the reporting period, the company's authorized and issued ordinary share capital and par value remained unchanged - As of June 30, 2024, authorized ordinary shares were **1,000,000,000** with a par value of **USD 1,000,000** (**RMB 6,860,633**); issued ordinary shares were **555,700,000** with a par value of **USD 555,700** (**RMB 3,774,897**)[63](index=63&type=chunk) [Dividends](index=24&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (for the six months ended June 30, 2023: nil)[64](index=64&type=chunk) [Trade and Other Payables](index=24&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) Trade payables are primarily related to the purchase of educational books and teaching aids, with a typical credit period of three months, and slightly increased in the current period - Trade payables are primarily related to the purchase of educational books and other teaching aids, with a typical credit period of three months granted to the Group[65](index=65&type=chunk) Details of Trade and Other Payables | Category | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 3,204 | 2,967 | | Employee benefit payables | 33,674 | 61,236 | | Other tax payables | 14,904 | 15,794 | | Payables for leasehold improvements | 4,213 | 2,250 | | Interest payables | 99 | — | | Other payables | 9,564 | 11,945 | | **Total** | **65,658** | **94,192** | [Post-Balance Sheet Events](index=25&type=section&id=%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) Subsequent to the reporting period, the trustee of the company's share award scheme acquired **1,540,000** shares, and **9,169,050** share options were exercised, resulting in new share issuance - Between July 3 and July 15, 2024, the trustee of the company's share award scheme acquired a total of **1,540,000** ordinary shares of the company from the market for a total consideration of **HKD 6,977,000** (equivalent to **RMB 6,370,000**)[31](index=31&type=chunk) - On July 10, 2024, **9,169,050** share options granted and vested under the share option scheme were exercised at an exercise price of **HKD 1.62** per share, resulting in the issuance and allotment of **9,169,050** new shares[31](index=31&type=chunk) Corporate Governance and Other Information [Compliance with the Corporate Governance Code on Corporate Governance Practices](index=26&type=section&id=%E9%81%B5%E5%AE%88%E6%9C%89%E5%85%B3%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A7%84%E7%9A%84%E4%BC%81%E7%AE%A1%E5%AE%88%E5%88%99) For the six months ended June 30, 2024, the company complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules - For the six months ended June 30, 2024, the company complied with all applicable code provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix C1 of the Listing Rules[68](index=68&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=26&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A0%87%E5%87%86%E5%AE%88%E5%88%99) The company adopted the Model Code for Securities Transactions by Directors as its securities dealing code and confirmed that directors and relevant employees complied with it during the reporting period - The company adopted the Model Code for Securities Transactions by Directors set out in Appendix C3 of the Listing Rules as its securities dealing code to regulate all securities transactions by the company's directors and relevant employees[69](index=69&type=chunk) - Following specific enquiries with all directors and relevant employees, they confirmed compliance with the Model Code for the six months ended June 30, 2024[69](index=69&type=chunk) [Audit Committee](index=26&type=section&id=%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) The Audit Committee, comprising three independent non-executive directors, reviews and oversees the Group's financial reporting, risk management, and internal control systems, and has reviewed the interim financial statements for this period - The Audit Committee comprises three independent non-executive directors: Mr Wong Wai Tak (Chairman), Mr Yang Xuezhi, and Ms Yan Jiamin[70](index=70&type=chunk) - The Audit Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting, risk management, and internal control systems, and it has reviewed the Group's unaudited interim condensed consolidated financial statements and this interim results announcement for the six months ended June 30, 2024[70](index=70&type=chunk) - The Audit Committee also met with the independent auditor, PricewaterhouseCoopers, to discuss matters concerning the company's accounting policies, practices, and internal controls[70](index=70&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) During the reporting period, the company repurchased **758,000** shares on the Stock Exchange, which the Directors believe will enhance earnings per share and net asset value per share - For the six months ended June 30, 2024, the company repurchased a total of **758,000** shares on the Stock Exchange for a total consideration of **HKD 2,312,730**[71](index=71&type=chunk) - The highest price paid for repurchased shares was **HKD 4.34** per share, and the lowest price was **HKD 2.17** per share[71](index=71&type=chunk) - The Directors believe that such repurchases will enhance earnings per share and increase net asset value per share attributable to shareholders[71](index=71&type=chunk) [Publication of this Interim Results Announcement and Interim Report](index=27&type=section&id=%E5%88%8A%E5%8F%91%E6%9C%AC%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E6%8A%A5%E5%91%8A) This announcement has been published on the Stock Exchange and the company's website, and the interim report will be published and dispatched to shareholders in due course - This announcement is published on the Stock Exchange website www.hkexnews.hk and the company's website http://www.skledu.com[72](index=72&type=chunk) - The Group's interim report for the six months ended June 30, 2024, will be published on the aforementioned websites and dispatched to the company's shareholders in due course[72](index=72&type=chunk) [Definitions](index=27&type=section&id=%E9%87%8A%E4%B9%89) This section provides definitions for key terms used in the report, including Board, Corporate Governance Code, Company, Directors, Group, IFRS, Listing Rules, Model Code, Share Award Scheme, Shares, Shareholders, Share Option Scheme, Stock Exchange, and Trustee - This section provides definitions for key terms used in the report, such as 'Board', 'Corporate Governance Code', 'Company', 'Group', 'IFRS', 'Listing Rules', 'Model Code', 'Share Award Scheme', and 'Share Option Scheme'[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) [Board of Directors](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E6%88%90%E5%91%98) This section lists the company's Board of Directors, including executive and independent non-executive directors - Board members include executive directors Mr Chen Qiyuan (Chairman), Mr Qi Mingzhi (Chief Executive Officer), Ms Li Ailing, and Ms Leng Xinlan[75](index=75&type=chunk) - Independent non-executive directors include Mr Wong Wai Tak, Mr Yang Xuezhi, and Ms Yan Jiamin[74](index=74&type=chunk)

港股公司报告 | 公司点评 思考乐教育 ( 01769 ) 证券研究报告 | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|---------------------------------------------------------------------------------------------------------------| | | | 2024 年 08 月 08 日 | | | 投资评级 | | | 超预期,重启高增 | 行业 | 非必需性消费/支援服 چ | | 公司发布 24H1 正面盈利公告 | 6 个月评级 | 买入（ 维持评级 ） | | | 当 ...