Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,682,333 thousand, an increase of 15.9% compared to RMB 1,451,032 thousand in 2022[9]. - Gross profit for the same period was RMB 855,680 thousand, up 24.1% from RMB 689,311 thousand in 2022[9]. - Net profit for the period was RMB 81,476 thousand, a significant recovery from a loss of RMB 391,770 thousand in 2022[9]. - Adjusted net profit (non-IFRS measure) reached RMB 288,040 thousand, compared to RMB 95,632 thousand in the previous year, marking a 200.5% increase[9]. - The company achieved a net profit margin of 4.8% and an adjusted net profit margin of 17.1% for the six months ended June 30, 2023[15]. - The company recorded a profit before tax of RMB 75.7 million for the six months ended June 30, 2023, compared to a loss of RMB 361.2 million for the same period in 2022[35]. - The company reported a total comprehensive loss of RMB (787,044) thousand for the six months ended June 30, 2022, compared to a total comprehensive income of RMB 147,285 thousand for the same period in 2023[135]. - Basic and diluted earnings per share were both RMB 0.04, compared to a loss per share of RMB 0.54 in the prior year[125]. User Growth and Market Expansion - Average monthly active users increased to 9.2 million as of June 30, 2023, compared to 7.9 million in the same period last year[10]. - The company has established 186 local operation centers across the country to meet the growing demand for offline training[12]. - As of June 30, 2023, the online platform has accumulated approximately 56.2 million registered users[12]. - The company continues to expand its business through a cost-effective approach, leveraging its large user base to promote higher-priced offline courses[12]. - The number of registrations for civil service exams significantly increased in the first half of 2023 compared to the same period last year, despite a shorter interval between exams[13]. Revenue Breakdown - Offline training service revenue rose by 32.3% from RMB 523.5 million to RMB 692.6 million, driven by the recovery from COVID-19 and increased brand recognition[20]. - The company reported a total revenue from the offline training services was RMB 692,556,000, online training services was RMB 730,422,000, and book sales was RMB 344,613,000, totaling RMB 1,767,591,000[163]. - The revenue from external customers for the six months ended June 30, 2023, was RMB 1,682,333,000, an increase from RMB 1,451,032,000 for the same period in 2022[163]. Cost and Expenses - The administrative expenses increased by 20.7% from RMB 264.9 million to RMB 319.8 million, primarily due to increased employee benefits expenses[28]. - Sales and marketing expenses increased by 20.2% from RMB 253.1 million for the six months ended June 30, 2022, to RMB 304.3 million for the six months ended June 30, 2023, primarily due to increased performance incentives for sales personnel and enhanced brand promotion efforts[29]. - Research and development expenses rose by 67.7% from RMB 85.3 million for the six months ended June 30, 2022, to RMB 143.1 million for the six months ended June 30, 2023, mainly due to increased bonuses for content and technology developers and a larger R&D team[30]. - The total expenses for the six months ended June 30, 2023, amounted to RMB 1,593,847,000, compared to RMB 1,365,133,000 for the same period in 2022[173]. Cash Flow and Financial Position - Cash and cash equivalents increased from RMB 1,047.4 million as of December 31, 2022, to RMB 1,335.3 million as of June 30, 2023, driven by cash generated from operating activities and net proceeds from a global offering[46]. - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 375,247,000, a significant increase from RMB 57,377,000 for the same period in 2022[48]. - The net cash used in investing activities for the six months ended June 30, 2023, was RMB (228,329,000), compared to RMB 25,440,000 in the previous year[48]. - The company’s total liabilities decreased from RMB 14,945,466 thousand as of June 30, 2023, to RMB 9,252,073 thousand as of January 1, 2023[135]. - The company’s total equity increased to RMB 1,266,310 thousand from a deficit of RMB 10,862,925 thousand, indicating improved financial health[133]. Shareholder Information and Corporate Governance - As of June 30, 2023, Zhang Xiaolong holds a 97.45% beneficial interest in Chalk Sky Ltd, while Wei Liang and Li Yong hold 2.25% and 0.10% respectively[67]. - The company adopted a pre-IPO share option plan on December 31, 2020, aimed at attracting and retaining talent[76]. - The 2023 Restricted Share Unit Plan was adopted on June 14, 2023, with a maximum share issuance limit of 225,365,773 shares, equivalent to 10% of the total issued shares as of the approval date[90]. - The company’s chairman and CEO roles are held by the same individual, which the board believes is beneficial for management efficiency[112]. - The company has adopted the corporate governance code as its own and has complied with all applicable provisions, except for the separation of the chairman and CEO roles[112]. Financial Risk Management - The company’s financial risk management policies remained unchanged since the end of the previous year, addressing market risk, credit risk, and liquidity risk[147]. - The estimated pre-tax profit impact of a 0.5% increase or decrease in the estimated weighted average yield would be approximately RMB 4,500,000 for the six months ended June 30, 2023[157]. - The fair value of financial assets and liabilities is determined using a discounted cash flow method, referencing benchmark yields from financial investment products[158]. Employee and Social Responsibility - The total employee costs for the six months ended June 30, 2023, amounted to RMB 964.1 million, which includes salaries, bonuses, pensions, and other social security expenses[107]. - The company has implemented various employee social insurance plans in accordance with Chinese labor laws, including housing, pension, medical, work injury, and unemployment benefits[107].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,682,333 thousand, representing a 15.9% increase from RMB 1,451,032 thousand for the same period in 2022[2] - Gross profit for the same period was RMB 855,680 thousand, up 24.1% from RMB 689,311 thousand in the prior year[2] - The net profit for the six months ended June 30, 2023, was RMB 81,476 thousand, a significant recovery from a net loss of RMB 391,770 thousand in the same period of 2022[2] - Adjusted net profit (non-IFRS measure) was RMB 288,040 thousand, compared to RMB 95,632 thousand in the previous year, indicating a substantial improvement[2] - The company reported a total comprehensive income of RMB 147,285 thousand for the six months ended June 30, 2023, compared to a total comprehensive loss of RMB 787,044 thousand in the same period of 2022[5] - The total expenses for the six months ended June 30, 2023, were RMB 1,593,847 thousand, compared to RMB 1,365,133 thousand in the same period of 2022, representing an increase of approximately 17%[27] - Profit before tax recorded RMB 75.7 million for the six months ended June 30, 2023, compared to a loss of RMB 361.2 million for the same period in 2022[73] - Net profit for the six months ended June 30, 2023, was RMB 81.5 million, with a net profit margin of 4.8%, compared to a net loss of RMB 391.8 million and a net loss margin of 27.0% for the same period in 2022[75] User and Market Growth - Average monthly active users increased to 9.2 million in 2023, up from 7.9 million in 2022, reflecting a growth of 16.5%[3] - The online platform accumulated approximately 56.2 million registered users as of June 30, 2023[56] - Offline training services generated revenue of RMB 692,556 thousand, while online training services contributed RMB 730,422 thousand, and book sales accounted for RMB 259,355 thousand[21] Assets and Liabilities - The total assets as of June 30, 2023, amounted to RMB 2,151,584 thousand, compared to RMB 1,633,516 thousand at the end of 2022, marking a growth of 31.7%[6] - As of June 30, 2023, total liabilities amounted to RMB 885,274 thousand, a decrease from RMB 12,496,441 thousand as of December 31, 2022[7] - Non-current liabilities totaled RMB 85,813 thousand, down from RMB 11,771,842 thousand year-over-year[7] - Current liabilities increased to RMB 799,461 thousand from RMB 724,599 thousand, with trade and other payables rising to RMB 309,253 thousand[7] Cash Flow and Financial Management - The company reported a net cash inflow from operating activities of RMB 375,247 thousand for the six months ended June 30, 2023, compared to RMB 57,377 thousand in the same period of 2022[11] - Cash and cash equivalents increased to RMB 1,335,329 thousand from RMB 1,047,402 thousand, showing a rise of 27.5%[6] - The company’s investment activities resulted in a net cash outflow of RMB 228,329 thousand for the six months ended June 30, 2023[12] - The company’s financial strategy includes a focus on reducing foreign exchange losses, which were RMB (31,591) thousand in the first half of 2023, down from RMB (43,919) thousand in the same period of 2022[26] Employee and Operational Expenses - Employee benefit expenses increased to RMB 964,109 thousand in the first half of 2023, up from RMB 771,313 thousand in the same period of 2022, reflecting a growth of approximately 25%[27] - Administrative expenses rose by 20.7% from RMB 264.9 million to RMB 319.8 million, primarily due to increased employee benefits from stock payments and bonuses[66] - Research and development expenses surged by 67.7% from RMB 85.3 million to RMB 143.1 million, reflecting higher compensation for content and technology developers and an expanded R&D team[68] Share Capital and Equity - The company has maintained a stable share capital structure with 5,000,000,000 ordinary shares as of June 30, 2023, unchanged from January 1, 2023[39] - As of June 30, 2023, the total number of ordinary shares issued was 2,209,920 thousand shares, with a total premium amounting to RMB 14,945,614 thousand[40] - The company issued ordinary shares related to its IPO, resulting in a share premium of RMB 14,945,466 thousand as of June 30, 2023[10] Future Outlook and Strategy - The company plans to continue expanding its market presence and investing in new product development to drive future growth[2] - The company anticipates significant compound growth in revenue and ongoing optimization in operational efficiency and profit margins[58] - The company is actively promoting the OMO teaching model to enhance efficiency and differentiate its offline products from competitors[58] Compliance and Governance - The audit committee reviewed the group's interim financial performance for the six months ended June 30, 2023, and confirmed compliance with relevant accounting standards and regulations[99] - The independent auditor conducted a review of the unaudited condensed consolidated interim financial information for the same period[99] Other Financial Metrics - The basic earnings per share for the six months ended June 30, 2023, was RMB 0.04, a recovery from a loss of RMB (0.54) per share in the same period of 2022[34] - The company’s adjusted net profit margin (non-IFRS measure) rose to 17.1% for the six months ended June 30, 2023, up from 6.6% in the prior year[88] - Current ratio increased to 2.3 as of June 30, 2023, compared to 1.3 as of June 30, 2022[88] - Quick ratio improved to 2.2 as of June 30, 2023, from 1.2 as of June 30, 2022[88]

Financial Performance and Turnaround - The company achieved a turnaround from loss to profit in 2022, despite the challenges of the pandemic and industry-wide losses[3] - Strategic contraction of offline operations and product structure adjustments contributed to the turnaround, reducing financial risks and increasing immediate revenue recognition[3] - Total assets increased to RMB 12,496,441 thousand in 2022, up from RMB 10,376,863 thousand in 2021[5] - Total liabilities decreased to RMB (10,862,925) thousand in 2022 from RMB (8,234,640) thousand in 2021[5] - Revenue decreased by 18.0% to RMB 2,810.4 million in 2022 from RMB 3,428.6 million in 2021[9] - Online training service revenue remained stable at RMB 1,414.9 million in 2022, compared to RMB 1,396.1 million in 2021[10] - Offline training service revenue decreased by 41.9% to RMB 938.9 million in 2022 from RMB 1,617.3 million in 2021[11] - Book sales revenue increased by 10.0% to RMB 456.6 million in 2022 from RMB 415.1 million in 2021[11] - Cost of sales decreased by 44.2% to RMB 1,444.7 million in 2022 from RMB 2,587.7 million in 2021[12] - Online training service cost of sales decreased by 19.3% to RMB 549.0 million in 2022 from RMB 680.5 million in 2021[12] - Offline training service cost of sales decreased by 63.5% to RMB 592.7 million in 2022 from RMB 1,622.2 million in 2021[12] - Book sales cost of sales increased by 6.3% to RMB 303.0 million in 2022 from RMB 285.0 million in 2021[12] - Gross profit increased by 62.4% from RMB 840.9 million in 2021 to RMB 1,365.7 million in 2022, with the gross margin rising from 24.5% to 48.6%[13] - Online training services gross margin increased from 51.3% in 2021 to 61.2% in 2022 due to optimized employee structure and cost control measures[14] - Offline training services gross margin improved from -0.3% in 2021 to 36.9% in 2022, driven by optimized employee structure and reduced refund rates[15] - Administrative expenses decreased by 51.5% from RMB 1,119.9 million in 2021 to RMB 543.7 million in 2022, primarily due to reduced employee benefits and office expenses[16] - Sales and marketing expenses decreased by 26.6% from RMB 704.1 million in 2021 to RMB 516.8 million in 2022, mainly due to reduced promotional activities and optimized employee structure[17] - R&D expenses decreased by 31.5% from RMB 287.0 million in 2021 to RMB 196.6 million in 2022, primarily due to optimized employee structure[18] - Other income increased by 30.3% from RMB 25.0 million in 2021 to RMB 32.6 million in 2022, mainly due to waste paper disposal income from printing business[20] - Net loss for the year increased from RMB 2,046.0 million in 2021 to RMB 2,087.3 million in 2022, with net loss margin rising from 59.7% to 74.3%[24] - Adjusted net profit (non-IFRS measure) improved from a loss of RMB 822.4 million in 2021 to a profit of RMB 191.5 million in 2022, driven by adjustments for share-based payments and fair value changes[26] - Contract assets decreased from RMB 205 million in 2021 to RMB 90 million in 2022 due to a reduction in post-paid agreement classes[27] - Contract liabilities decreased from RMB 1,692 million in 2021 to RMB 1,179 million in 2022 due to delayed sales of courses designed for 2023 exams caused by COVID-19[28] - Refund liabilities decreased from RMB 6,803 million in 2021 to RMB 2,750 million in 2022 due to a reduction in the proportion of refundable courses and a decrease in full-refund exam agreement classes[29] - Net current assets increased from RMB 277 million in 2021 to RMB 5,654 million in 2022, primarily due to a reduction in refund liabilities by RMB 4,053 million[30] - Cash and cash equivalents decreased from RMB 11,599 million in 2021 to RMB 10,474 million in 2022 due to delayed sales of courses for 2023 exams caused by COVID-19[31] - Net cash used in operating activities was RMB 839.92 million in 2022, compared to RMB 9,151.29 million in 2021[32] - The company recorded a net foreign exchange loss of RMB 777 million in 2022, compared to a net gain of RMB 123 million in 2021[33] - Capital expenditures decreased from RMB 2,190 million in 2021 to RMB 360 million in 2022, primarily for property, plant, and equipment[34] - Gross margin improved to 48.6% in 2022 from 24.5% in 2021[38] Technology and Product Development - The company has consistently invested in technology since its inception, with significant long-term investments in systems like the intelligent article recognition and grading system, which began generating scalable revenue in 2020[3] - The company emphasizes a product-centric approach, focusing on the overall quality and development of its teaching staff rather than individual star instructors[3] - The company's user-centric philosophy has led to a focus on improving teaching services and product quality, resulting in natural traffic and user growth through word-of-mouth[4] - The company plans to continue its core business philosophy of being user-centric and technology-driven in 2023, aiming to create more value for shareholders and society[4] Corporate Governance and Leadership - Zhang Xiaolong, aged 40, serves as the Executive Director, CEO, and Chairman of the Board, responsible for the company's overall strategic planning, business development, and operations, as well as technology and course development[41] - Wei Liang, aged 38, serves as the Executive Director, President, and CTO, overseeing the company's online and offline training businesses and technical affairs[41] - Li Yong, aged 48, is a Non-Executive Director providing guidance and advice on the company's business strategy[42] - Li Xin, aged 39, is a Non-Executive Director focusing on brand and marketing strategy for the company[42] - Qiu Dongxiao, aged 61, is an Independent Non-Executive Director responsible for supervising the board and providing independent opinions[43] - Yuan Qiyao, aged 43, is an Independent Non-Executive Director with extensive experience in finance and corporate strategy[44] - Yuan Jia, aged 42, is an Independent Non-Executive Director with a background in education and corporate governance[44] - Sheng Haiyan, aged 38, serves as the Vice President, managing the company's book publishing and sales operations[45] - The company maintains a diversified board with one female and seven male directors, aged between 38 and 61, with diverse educational backgrounds[125] - The company adheres to high standards of corporate governance and has adopted the Corporate Governance Code as per the Listing Rules[119] - The company has appropriate insurance arrangements for legal liabilities faced by its directors and officers[114] - The company's board composition complies with the Listing Rules, including the requirement for at least one-third of the board to be independent non-executive directors[124] - The company emphasizes a culture of integrity and ethical conduct, with regular training for employees on compliance and ethical standards[121] - The company is committed to a user-centric and technology-driven business strategy, aiming to create value for shareholders and society[122] - The company's board is responsible for strategic decisions and has delegated daily management to senior executives, with oversight by three board committees[123] - The company has a board diversity policy in place, focusing on gender, skills, age, professional experience, and educational background[125] - All newly appointed directors receive necessary induction training and materials to ensure they understand the company's operations and regulatory responsibilities[127] - The Chairman and CEO roles are held by the same individual, Zhang Xiaolong, who has extensive experience in the non-academic vocational education and training industry[128] - Executive directors have signed three-year service contracts starting from December 20, 2022[129] - Non-executive directors and independent non-executive directors have signed three-year appointment letters starting from December 20, 2022[129] - The Board of Directors holds at least four meetings annually, with a notice period of no less than 14 days for regular meetings[132] - Meeting agendas and related documents are sent out at least three days before the meeting to ensure directors have sufficient time to review and prepare[132] - Detailed minutes of Board and Committee meetings are maintained and provided to all directors for their reference and records[132] - Attendance records for Board and Committee meetings show full attendance for most directors during the reporting period[133] - The company's board of directors retains decision-making authority over all major matters, including policy approval, overall strategy, budget, internal control, risk management, and significant transactions[135] - The audit committee, composed of three independent non-executive directors, held one meeting post-listing to review the annual financial statements, internal control systems, and risk assessments[137] - The nomination committee, consisting of five directors, held one meeting post-listing to review the independence of non-executive directors and the diversity policy of the board[138] - The remuneration committee, comprising five directors, held one meeting post-listing to review the compensation and performance of directors and senior management[139] - The company's senior management salaries for the year ending December 31, 2022, ranged from HKD 1,500,001 to over HKD 2,000,000, with four individuals earning over HKD 2,000,000[141] - The company has adopted a dividend policy, with dividends to be determined by the board based on financial performance, business conditions, and future operational needs[143] - The company has established an internal control and risk management system to protect shareholder interests and company assets, with an independent internal audit department reviewing the system annually[144] - The company's accounting and financial reporting functions are performed by qualified and experienced staff who have received adequate training and development[145] - The total fees for audit and non-audit services provided by the auditor in 2022 amounted to RMB 5,602 thousand, with audit services costing RMB 4,685 thousand and tax advisory services costing RMB 917 thousand[146] - The company emphasizes effective communication with shareholders and has adopted a shareholder communication policy, including maintaining a website for public access to business updates and financial information[148] ESG and Sustainability - The company's ESG report covers the period from January 1, 2022, to December 31, 2022, and focuses on the ESG performance of its core business operations[155] - The company has established an ESG governance framework to monitor environmental impacts, mitigate climate-related risks, and ensure compliance with environmental regulations[162] - The Board of Directors is responsible for overseeing ESG strategy, risk identification, and performance monitoring, with regular reporting from the ESG task force[162] - The company has implemented ESG measures to manage risks, including climate-related issues, and reviews these measures annually[165] - Independent third-party assessments are conducted to evaluate compliance with environmental protection standards, including wastewater, noise, and air pollution control[165] - The company has developed an ESG policy outlining risk governance, strategy formation, risk management, and KPI identification, reviewed annually for relevance[168] - ESG risks are integrated into the company's risk management framework and internal control systems, with regular reviews to ensure effectiveness[169] - The company prioritizes stakeholder engagement, including government, shareholders, employees, and suppliers, to gather feedback and improve sustainability strategies[161] - Key ESG focus areas include environmental compliance, emissions management, energy consumption, and employee welfare, among others[167] - The company emphasizes transparency in reporting ESG data, ensuring consistency and comparability of environmental and social metrics[159] - ESG-related expenditures and climate policies are tracked and disclosed as part of the company's commitment to sustainable operations[167] - The company's printing paper consumption decreased from 38,880 tons in 2021 to 29,913 tons in 2022, reflecting a reduction in environmental impact[177] - The company aims to achieve carbon neutrality by 2050, with a short-term goal of reducing current carbon emission density by 1% by 2027[179] - The company has implemented measures to reduce paper consumption, including optimizing printing formats and reducing notebook distribution to students[178] - The company's subsidiary has obtained the CEC-7009EL certification, indicating compliance with specific environmental requirements in printing materials and processes[176] - The company has set internal environmental policies to minimize operational impact on the environment, focusing on carbon emissions, waste management, and energy usage[177] - The company plans to further reduce paper consumption by improving printing efficiency and aligning book printing with demand forecasts[178] - The company has not incurred significant environmental compliance costs and expects related expenses to remain low in the foreseeable future[178] - The company has established safety guidelines and conducts regular safety inspections and maintenance of equipment and facilities[178] - The company has not faced any significant environmental claims or penalties during the year[178] - The company is committed to sustainable development, balancing corporate governance, environmental management, and social responsibility[171] - Total electricity consumption decreased from 9,810,098.05 kWh in 2021 to 7,218,868.10 kWh in 2022, a reduction of 26.4%[183] - Greenhouse gas emissions (Scope 2) decreased from 5,699,666.97 tons of CO2 equivalent in 2021 to 4,194,162.36 tons in 2022, a reduction of 26.4%[184] - Greenhouse gas emissions (Scope 3) increased from 10,250.02 tons of CO2 equivalent in 2021 to 20,040.53 tons in 2022, an increase of 95.5%[184] - Packaging box consumption decreased from 7,315,720 units in 2021 to 4,182,000 units in 2022, a reduction of 42.8%[186] - The company encourages remote work and has implemented energy-saving measures, including replacing all workplace lights with energy-efficient ones[185] - The company collaborates with reputable suppliers like Tencent and Alibaba Cloud, which provide green computing capabilities to help build low-carbon digital infrastructure[182] - The company has issued a "Low-Carbon Energy Saving Initiative" to encourage employee participation in energy conservation[185] - The company has reduced the provision of single-use bottled water in classrooms and encourages students to bring their own cups to reduce paper cup consumption[185] - The company has identified climate-related risks, including increased operational costs due to rising electricity consumption and potential disruptions from extreme weather events[188] - The company faces potential reputational and financial risks from changes in environmental regulations, which could increase compliance costs and litigation risks[188] - The company is transitioning towards green, low-carbon, and zero-carbon economy, leveraging better risk management to unlock opportunities and improve energy efficiency in operations[189] - The company implemented internal policies to reduce carbon footprint, including energy-saving measures and waste reduction, with most suppliers located in China to minimize transportation-related emissions[190] - The company has established a compliance culture and ESG policies to ensure adherence to Chinese laws and regulations, providing relevant training to employees[191] - The company has developed anti-fraud and anti-corruption systems, with all directors receiving 1 hour of anti-corruption training in the year, and no violations reported[193] - The company emphasizes intellectual property protection, with no reported cases of IP, patent, or trademark infringement during the year[194] - The company focuses on fair trade and truthful advertising, with no significant marketing-related legal violations reported[195] - The company prioritizes employee health, safety, and diversity, with no major workplace accidents or claims related to health and safety[196] - The company adheres to labor laws and provides equal opportunities in employment and career development regardless of gender or age[197] Employee Statistics and Turnover - The company had 7,440 full-time employees as of December 31, 2022, down from 8,964 in 2021, with total employee costs of RMB 15,693 million[40] - Total number of employees is 7,440, with 71.42% being female and 28.58% male[198] - 64.76% of employees are under 30 years old, while 35.23% are between 31 and 50 years old[198] - 99.77% of employees are frontline and other staff, with only 0.07% being senior management[198] - The overall employee turnover rate for the year is 46.21%, with 3,438 employees leaving the company[199] - Male employee turnover rate is 62.23%, significantly higher than the female turnover rate of 39.80%[200] - Employees under 30 years old have the highest turnover rate at 49.17%[200] - Frontline and other staff have a turnover rate of 46.26%, while senior management turnover is 20.00%[200] - All employees are located in Mainland China, with no geographical diversity in the workforce[198] Related Party Transactions and Contracts - The company's largest supplier accounted for 10.7% of total procurement, and the top five suppliers accounted for 22.1% of total procurement[55] - The company's largest customer accounted for 1.0% of total revenue, and the top five customers accounted for 3.5% of total revenue[55] - The company faced delays in revenue recognition due to the postponement of certain national and provincial recruitment and qualification exams caused by COVID-19[51] - The company incurred fixed costs and expenses related to employee benefits and leased properties for offline training services during the COVID-19 pandemic[51] - The company's functional currency for its Chinese subsidiaries is RMB, while the functional currency for the company and its overseas subsidiaries is USD, leading to foreign exchange risk[52] - The company manages price risk related to financial assets measured at fair value through profit or loss by diversifying its investment portfolio according to internal limits[53] - The company manages credit risk on a group basis, assessing the credit quality of counterparties and monitoring the recoverability of receivables[54] - The company's property, plant, and equipment details are provided in the consolidated financial statements[56] -

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 2,810,429 thousand, a decrease of 18.0% from RMB 3,428,559 thousand in 2021[2] - The annual net loss amounted to RMB 2,087,347 thousand, slightly higher than the net loss of RMB 2,045,971 thousand in 2021[3] - The company reported a basic loss per share of RMB (2.86), compared to RMB (2.81) in the previous year[3] - The company reported a loss of approximately RMB 2,082,182,000 for the year ended December 31, 2022, compared to a loss of RMB 804,846,000 in 2021[39] - The net loss for the year ended December 31, 2022, was RMB 29,632,000, compared to a net loss of RMB 31,299,000 for the year ended December 31, 2021, indicating an improvement of 5.3%[30] Profitability - Gross profit increased to RMB 1,365,705 thousand, up 62.2% from RMB 840,867 thousand in the previous year[2] - Gross profit for the year ended December 31, 2022, was RMB 1,365.71 million, compared to RMB 840.87 million in 2021, indicating a significant improvement in profitability[23][24] - The company reported a gross margin of approximately 46.1% for 2022, up from 24.1% in 2021, reflecting better cost management and revenue generation[23][24] - The gross profit margin improved to 48.6% in 2022, up from 24.5% in 2021[89] - Adjusted net profit/loss (non-IFRS measure) for 2022 was RMB 191.5 million, a significant improvement from a loss of RMB 822.4 million in 2021[80] Cash Flow and Liquidity - Cash and cash equivalents at year-end were RMB 1,047,402 thousand, down from RMB 1,159,867 thousand in 2021[6] - Operating cash flow for the year ended December 31, 2022, was RMB (83,992) thousand, a significant improvement from RMB (915,129) thousand in 2021, indicating a reduction in cash outflow[10] - Cash used in investing activities for the year was RMB (36,792) thousand, compared to cash inflow of RMB 156,516 thousand in 2021, reflecting a shift in investment strategy[11] - Cash and cash equivalents decreased from RMB 1,159.9 million as of December 31, 2021, to RMB 1,047.4 million as of December 31, 2022, mainly due to exam postponements affecting sales[85] - The current ratio improved to 1.8 in 2022, compared to 1.0 in 2021[89] Assets and Liabilities - Total assets decreased to RMB 1,633,516 thousand from RMB 2,142,223 thousand in 2021, reflecting a decline of 23.7%[6] - Non-current liabilities increased to RMB 11,771,842 thousand from RMB 9,024,068 thousand in the previous year[8] - The company’s contract assets as of December 31, 2022, were RMB 9,000,000, down from RMB 20,528,000 in 2021, indicating a decrease of 56.2%[26] - The company’s contract liabilities amounted to RMB 117,866,000, a decrease of 30.3% from RMB 169,194,000 in 2021[26] Operational Efficiency - Operating profit for the year was RMB 19,143 thousand, a significant improvement from an operating loss of RMB 1,244,513 thousand in 2021[3] - Administrative expenses decreased by 51.5% from RMB 1,119.9 million in 2021 to RMB 543.7 million in 2022, due to optimized employee structure and reduced office expenses[69] - Employee benefit expenses decreased significantly to RMB 1,569,262,000 in 2022, down 42.3% from RMB 2,719,223,000 in 2021[31] - The total employee costs for the year amounted to approximately RMB 1,569.3 million, down from 8,964 full-time employees in 2021 to 7,440 in 2022[92] Strategic Initiatives - The company plans to focus on new product development and market expansion strategies in the upcoming year[1] - The company has initiated a new strategy focusing on non-academic vocational education and training services in China, aiming to capture a growing market segment[12] - The company plans to enhance course offerings and teaching methods, and invest in R&D to leverage advanced technology and data analytics[61] - The company aims to expand its course coverage and explore innovative teaching models to meet diverse learning needs[61] Market and Revenue Trends - Revenue from offline training services was RMB 938.94 million, down from RMB 1,617.33 million in 2021, while online training services revenue increased to RMB 1,414.92 million from RMB 1,396.13 million[23][24] - Offline training service revenue dropped by 41.9% from RMB 1,617.3 million in 2021 to RMB 938.9 million in 2022, primarily due to COVID-19 disruptions and strategic adjustments[63] - Book sales revenue increased by 10.0% from RMB 415.1 million in 2021 to RMB 456.6 million in 2022, driven by brand recognition and teaching quality[64] Other Financial Metrics - The company recognized a loss of RMB (77,741,000) from foreign exchange for the year ended December 31, 2022, compared to a gain of RMB 12,261,000 in 2021[29] - The income tax expense for the year ended December 31, 2022, was RMB 41,821,000, compared to an income tax credit of RMB (11,958,000) in 2021[34] - The company received government grants totaling RMB 2,022,000 in 2022, a significant increase from RMB 8,000 in 2021[28] Corporate Governance - The audit committee, composed of three independent non-executive directors, has reviewed the group's annual performance for the year ended December 31, 2022[98] - The auditor confirmed that the financial statements for the year ended December 31, 2022, are consistent with the audited financial reports[99] - The board has decided not to declare a final dividend for the year ended December 31, 2022 (2021: none) [96]