Investment Valuation and Impairment - The fair value change of investments measured at fair value through profit or loss decreased by approximately RMB 237 million to about RMB -144.4 million, primarily due to overdue redemptions and a decline in the price of listed shares [2]. - The company recorded a financial asset impairment loss of approximately RMB 100.3 million, mainly due to deteriorating credit conditions and increased credit risk from certain debtors [8]. - The fair value of listed equity investments decreased by RMB 34.3 million, as the closing price of shares dropped from HKD 5.40 to HKD 3.21 per share [7]. - The expected credit loss rate for certain projects was assessed at 100%, indicating a high likelihood of default and low recovery prospects [6]. - The fair value of the 2nd and 14th projects showed significant losses, with fair value changes of RMB -83.118 million and RMB -39.306 million respectively [4]. - The company has reported a loss of RMB 6.882 million and RMB 5.387 million for the fair value changes of the 2nd and 14th projects as of December 31, 2021 [4]. - The company has recognized impairment losses based on an evaluation report, considering industry policy changes and the financial status of the counterparty [12]. Legal Actions and Recovery Efforts - The company has initiated legal actions and arbitration against counterparties for non-fulfillment of payment obligations, with a first-instance victory confirmed [4]. - The total amount of principal and interest recovered from certain projects after December 31, 2021, was approximately RMB 33 million [10]. - The company is actively pursuing the recovery of investments and has signed extension agreements with issuers due to liquidity issues and construction delays [10]. - The company is in discussions with external legal advisors to mitigate credit risk and recover overdue amounts [4]. Financial Results Adjustments - The unaudited financial results showed a sales cost of RMB (1,169,280) thousand, which was adjusted to RMB (1,187,750) thousand in the audited results, reflecting a difference of RMB 18,470 thousand [18]. - Research and development expenses were reported at RMB (142,310) thousand in the unaudited results, adjusted to RMB (146,909) thousand in the audited results, indicating a difference of RMB 4,599 thousand [18]. - The company reported a loss of RMB (140,178) thousand from the impairment of intangible assets, which was not recorded in the unaudited results [18]. - The company’s investment in associates was valued at RMB 17,492 thousand in the audited results, down from RMB 20,318 thousand in the unaudited results, showing a decrease of RMB 2,826 thousand [20]. - The deferred tax assets were reported at RMB 35,080 thousand in the audited results, down from RMB 60,187 thousand in the unaudited results, reflecting a decrease of RMB 25,107 thousand [20]. - The company’s cash and cash equivalents were reported at RMB 211,180 thousand in the audited results, slightly down from RMB 213,845 thousand in the unaudited results, a decrease of RMB 2,665 thousand [20]. - The adjustments in financial results were influenced by the severe pandemic impact in Guangzhou, leading to lower operational performance and financial conditions than expected [20]. Management and Governance - The executive director team includes Mr. Tang Junjing, Mr. Tang Junying, Mr. Zhou Gui, and Ms. Zhao Weiying [29]. - The board of directors is chaired by Mr. Tang Junjing, who also serves as the CEO and executive director [29]. - The announcement date is September 27, 2022 [29].

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 268,445 thousand, a decrease of 75.5% compared to RMB 1,096,355 thousand in the same period of 2021[10]. - Gross profit for the same period was RMB 121,671 thousand, down 71.2% from RMB 421,925 thousand year-on-year[10]. - Net profit increased significantly to RMB 5,547 thousand, representing a 294.0% increase from RMB 1,408 thousand in the previous year[10]. - Adjusted net profit for the period was RMB 6,766 thousand, a 92.1% increase compared to RMB 3,522 thousand in the prior year[10]. - The group's revenue decreased by 75.5% from RMB 1,096.4 million in the first half of 2021 to approximately RMB 268.4 million in the reporting period[35]. - The group's gross profit fell by 71.2% from RMB 421.9 million in the first half of 2021 to RMB 121.7 million in the reporting period, with a gross margin of 45.3%[40]. - Other income and gains decreased by 80.5% to RMB 10.1 million, primarily from interest income and government subsidies[41]. - The group recorded a profit of RMB 5.5 million, an increase of 294.0% from RMB 1.4 million in the first half of 2021, mainly due to a lower comparative base from impairment provisions[52]. - The sales expenses decreased by approximately 75.5% to RMB 30.5 million from RMB 124.5 million in the first half of 2021[44]. - Administrative expenses decreased by 62% to approximately RMB 44.4 million compared to RMB 116.8 million in the first half of 2021[45]. - Adjusted net profit increased by 92.1% from RMB 35 million in the first half of 2021 to RMB 68 million in the reporting period[56]. - Reported profit for the six months ended June 30, 2022, was RMB 55.47 million, a 294.0% increase compared to RMB 14.08 million in the same period of 2021[56]. Strategic Initiatives - The company is focusing on the Greater Bay Area and exploring new growth avenues to mitigate the impacts of the "double reduction policy" and COVID-19[12]. - The company is expanding its full-time business segment by opening new campuses within the province, leveraging existing brand advantages to attract students[12]. - The company is enhancing its quality education offerings by upgrading various educational products to meet comprehensive growth needs of students[12]. - The company aims to combine rich teaching experience with scientific teaching systems to improve the quality of precision teaching services[12]. - The company has received positive market feedback and recognition for its strategic adjustments and new initiatives[12]. - The company is committed to establishing a reliable brand image and achieving sustainable development through effective educational services[12]. - The group collaborated with 48 primary and secondary schools in Guangzhou to provide over 50 quality education products, enhancing student experience and gaining school recognition[13]. - The group launched the "Excellence 3+ Certificate Vocational College Entrance Exam Class," utilizing small class teaching and a closed-loop teaching strategy to ensure high-quality learning for vocational school students[16]. - The group is actively transforming towards vocational education, establishing strategic partnerships with vocational colleges to tailor courses that enhance students' professional skills and cultural literacy[16]. - The group aims to accelerate the development of a "full-time review + quality education + vocational education" core strategic system, promoting diversified educational services for comprehensive student development[18]. - The group plans to expand its full-time review business and explore new markets nationwide, leveraging technology to optimize teaching models and meet student needs[21]. - The group is enhancing its quality education layout by upgrading existing products and establishing a comprehensive development education system that includes moral, intellectual, physical, aesthetic, and labor education[22]. - The group is committed to community-centered quality education, reorganizing diversified products to discover students' interests through hands-on experiences[23]. - The group is exploring vocational education opportunities and expanding overseas, aligning with national policies that emphasize the importance of vocational education[27]. Financial Position - As of June 30, 2022, the group's cash and cash equivalents amounted to RMB 310.4 million[57]. - Current ratio improved to approximately 1.3 as of June 30, 2022, up from 0.9 on December 31, 2021[58]. - Leverage ratio decreased to 59.8% as of June 30, 2022, compared to 73.4% on December 31, 2021[58]. - Financial assets decreased, with debt investments at RMB 117.1 million as of June 30, 2022, down from RMB 577.3 million on December 31, 2021[62]. - The group had no significant investments or capital asset plans as of the mid-term report date[59]. - The group employed 2,431 staff as of June 30, 2022, down from 3,043 on December 31, 2021[71]. - No interim dividend was declared for the six months ended June 30, 2022[72]. - The group has no recorded significant contingent liabilities or guarantees as of June 30, 2022[65]. - The company’s total liabilities as of June 30, 2022, were not specified in the provided documents, indicating a need for further financial analysis[149]. - Total non-current assets decreased to RMB 318,111,000 from RMB 546,689,000 as of December 31, 2021, representing a decline of approximately 42%[150]. - Current assets totaled RMB 571,913,000, down from RMB 771,963,000, indicating a decrease of about 26%[150]. - The net current assets improved to RMB 134,735,000 compared to a negative RMB 45,863,000 in the previous period[153]. - Total liabilities decreased to RMB 532,164,000 from RMB 817,826,000, reflecting a reduction of approximately 35%[150]. - The company's net assets increased to RMB 357,860,000 from RMB 350,604,000, showing a growth of about 2%[153]. - Cash and cash equivalents rose significantly to RMB 310,437,000 from RMB 211,180,000, marking an increase of approximately 47%[150]. - The company reported a decrease in lease liabilities from RMB 150,222,000 to RMB 94,986,000, a reduction of about 37%[153]. - The total equity attributable to the owners of the parent company was RMB 357,301,000, slightly up from RMB 350,704,000, indicating a growth of around 2%[153]. - The company’s short-term debt investments at fair value decreased to RMB 57,060,000 from RMB 245,989,000, a decline of approximately 77%[150]. - The company’s total assets less current liabilities stood at RMB 452,846,000, down from RMB 500,826,000, reflecting a decrease of about 10%[153]. Corporate Governance - The company is committed to maintaining high corporate governance standards as part of its operational review[77]. - The company has confirmed compliance with the standard code of conduct for securities trading by all directors during the reporting period[81]. - The company has adopted the standard code of conduct for securities trading as per the listing rules, ensuring that all directors and senior management comply with it[81]. - The company has not reported any changes in the board of directors or senior management that require disclosure since the date of the 2021 annual report[84]. - The audit committee currently consists of Ms. Long Yu and Mr. Xu Wenhui, following the resignation of Mr. Xue Peng as chairman[83]. - The company is actively seeking suitable candidates to fill the vacancy left by Mr. Xue Peng, who resigned as an independent non-executive director and chairman of the audit committee on July 4, 2022, to comply with listing rules[78]. - There were no buybacks or redemptions of the company's listed securities during the reporting period, except for shares purchased under the restricted share unit plan[82]. - The company has not incurred any disclosure obligations under listing rules 13.20, 13.21, and 13.22[85]. - As of June 30, 2022, there are no known changes in the shareholdings of directors or senior management that require disclosure under the Securities and Futures Ordinance[96]. - The company has a significant ownership structure, with Huang Yanjun holding 459,098,231 shares, representing 54.19% of the issued share capital[98]. - Elite Education Investment Co. Ltd. holds 457,775,231 shares, accounting for 54.03% of the total shares[98]. - The company has implemented a restricted share unit plan, retaining 27,292,396 existing shares and issuing 43,540,000 new shares to Soarise Bulex Limited[104]. - As of June 30, 2022, JTC Trustees (BVI) Limited holds 456,934,231 shares, which is 53.93% of the issued shares[98]. - Soarise Bulex Limited holds 109,709,397 shares, representing 12.95% of the total shares[98]. - The overall ownership structure indicates a strong control by key stakeholders, ensuring strategic alignment in decision-making[98]. Compliance and Regulatory Matters - The company has divested its K-12 after-school education business in compliance with the "double reduction" policy, maintaining its structural contracts[107]. - The exclusive management consulting and business cooperation agreement allows the foreign-invested enterprise to provide services to its Chinese operating entities[110]. - The company has established exclusive purchase option agreements to secure its interests in the Chinese market[112]. - The structural contracts are legally binding and enforceable under Chinese laws, ensuring compliance with relevant regulations without requiring government approval for their establishment and execution[128]. - The company has implemented measures to ensure compliance with structural contracts, including annual reviews by the board and disclosures in interim and annual reports[130]. - There have been no amendments or terminations to the structural contracts since their signing, and they will remain in effect unless there are significant changes in the regulatory environment[134]. - The company is subject to foreign ownership restrictions in the K-12 education sector in China, necessitating the use of structural contracts for operations[129]. - The irrevocable power of attorney allows the foreign-invested enterprise to act as the sole agent for the registered shareholders, ensuring compliance with corporate governance requirements[120]. - Spousal commitments from registered shareholders' spouses ensure that they will not obstruct the execution of structural contracts[122]. - The company will disclose any significant adverse impacts from updates to foreign investment laws as they arise[132]. - The structural contracts are designed to mitigate risks associated with foreign investment restrictions in the Chinese market[130].

Financial Performance - Total revenue for the year ended December 31, 2021, increased by 12.5% to RMB 1,898.6 million compared to RMB 1,687.8 million in 2020[10] - Gross profit rose by 18.6% to RMB 729.3 million from RMB 615.2 million year-on-year[10] - Adjusted loss for the year was RMB 331.5 million, a decrease of 330.8% compared to an adjusted profit of RMB 143.7 million in 2020[10] - Revenue for the fiscal year reached $500 million, representing a 15% increase compared to the previous year[74] - The revenue from quality education increased by 43.5% to RMB 73.96 million in 2021, compared to RMB 51.55 million in 2020[27] - The revenue from tutoring projects rose by 12.8% to RMB 1,663.03 million in 2021, up from RMB 1,474.48 million in 2020[27] - The full-time preparation project revenue slightly decreased by 0.1% to RMB 161.64 million in 2021, compared to RMB 161.76 million in 2020[27] - The net profit dropped from RMB 127.8 million in 2020 to RMB -325.6 million during the reporting period, a decline of 354.8%[46] Business Challenges - The company faced significant impacts from the "double reduction policy" and the COVID-19 pandemic, affecting overall business operations[12] - The company faced significant adverse impacts on its original business and revenue due to the termination of compulsory education subject training services since January 2022, in compliance with the "double reduction" policy[99] - The company’s business and financial performance have been adversely affected by the pandemic and may continue to be impacted by natural disasters and other circumstances in China[99] - The company is exposed to regional concentration risk as its business is primarily concentrated in Guangzhou[99] - The company faces intense competition in the Chinese education industry, which may lead to price pressures and reduced profit margins[98] - The company’s ability to maintain and increase tuition fees is critical to its business and operational performance[99] Strategic Initiatives - The company aims to strengthen its position in the quality education sector in response to national policies[13] - The company launched eight new quality education products to enhance students' comprehensive development needs[13] - The company is focusing on integrating advanced technology into its teaching services, specifically through the "Smart Classroom" initiative[17] - The company plans to enhance its quality education offerings by collaborating with public schools to provide personalized quality courses and on-campus services[18] - The company is exploring vocational education opportunities, including training for domestic and international examinations, to meet market demands[22] - The company aims to provide diversified and comprehensive teaching services to promote students' overall development in line with national policies[24] - The company is committed to transforming challenges into opportunities for continuous growth[12] Employee and Operational Insights - The group had a total of 3,043 employees as of December 31, 2021, down from 7,097 employees in 2020 due to the impact of the "double reduction" policy[64] - The group provides regular training to employees to enhance their skills and knowledge, ensuring they are equipped to meet market and student demands[170] - The group is committed to regular reviews of compensation packages to attract and retain high-performing employees[170] Financial Management and Investments - Cash and cash equivalents amounted to RMB 211.2 million as of December 31, 2021[49] - Current ratio decreased to approximately 0.94 from 1.06 as of December 31, 2020[52] - The group held financial assets including debt investments of RMB 577.3 million, accounting for 43.8% of total assets[54] - The group also held equity investments of RMB 56.2 million, representing 4.3% of total assets as of December 31, 2021[54] - The board has maintained a prudent financial management approach, ensuring a healthy liquidity position during the reporting period[58] - The company has adopted a dividend policy since March 12, 2019, considering various factors before declaring dividends[105] Structural Contracts and Compliance - The group has established structural contracts to control its Chinese operating entities, ensuring economic benefits despite regulatory restrictions on foreign ownership in the K-12 education sector[174] - The exclusive management consulting and business cooperation agreement allows the foreign-invested enterprise to provide services to key Chinese operating entities, ensuring compliance with local regulations[178] - The exclusive purchase option agreements grant the foreign-invested enterprise the right to acquire equity interests in the group under permissible conditions, ensuring strategic control[180] - The equity pledge agreement secures the foreign-invested enterprise's interests by pledging all equity interests of the group as collateral[183] - The irrevocable power of attorney allows the foreign-invested enterprise to act as the sole agent for shareholders, facilitating governance and decision-making processes[184] - The structural contracts are legally binding and enforceable under Chinese law, with no need for government approval for their execution[191] Future Outlook - The management provided an optimistic outlook, projecting a 10% growth in revenue for the next fiscal year[74] - New product launches are expected to contribute an additional $50 million in revenue next year[74] - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[74] - A strategic acquisition of a local competitor is anticipated to enhance service offerings and increase customer base by 20%[74] Shareholder Information - As of December 31, 2021, the company's distributable reserves amounted to RMB 321.7 million[115] - The company has no major shareholders or directors with beneficial interests exceeding 5% in any of the top five suppliers or customers during the review period[166] - The company’s top five customers accounted for less than 30% of total sales during the review period[166] - The company’s procurement from its top five suppliers also accounted for less than 30% of total procurement during the review period[167]

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 1,096,355 thousand, representing a 42.5% increase from RMB 769,295 thousand in the same period of 2020[11]. - Gross profit for the same period was RMB 421,925 thousand, up 54.1% from RMB 273,854 thousand year-on-year[11]. - Adjusted net profit decreased by 94.4% to RMB 3,522 thousand compared to RMB 62,368 thousand in the previous year[11]. - Net profit for the six months ended June 30, 2021, was RMB 1,408 thousand, a significant decrease of 97.3% compared to RMB 52,985 thousand in the prior year[145]. - Basic earnings per share for the period was RMB 0.8 cents, down from RMB 6.9 cents in the same period last year[143]. - The group recorded a net current liability of RMB 36,396,000, which includes contract liabilities of RMB 775,465,000[175]. - The company reported a net loss attributable to equity holders of RMB 5,678,000 for the six months ended June 30, 2021[153]. - The total equity attributable to the owners of the parent company decreased to RMB 690,930,000 from RMB 798,343,000, a decline of 13.5%[153]. Student Enrollment and Tutoring Services - The number of enrolled students increased by 24.1% to 322,938 from 260,209 in the previous year[11]. - The total tutoring hours provided rose by 30.9% to 7,311,749 from 5,586,885 hours in the prior year[11]. - Total revenue for personalized tutoring courses reached RMB 471.24 million for the six months ended June 30, 2021[15]. - Small class tutoring revenue rose by 35.4% to RMB 508.1 million, while personalized tutoring revenue surged by 67.6% to RMB 471.2 million[32]. - The number of students in small class tutoring increased by 16.8% to 205,358, and personalized tutoring students grew by 39.5% to 104,429[35]. Business Operations and Strategy - The company operates 276 training centers across major cities in the Guangdong-Hong Kong-Macao Greater Bay Area[13]. - Future strategies include expanding educational offerings and enhancing student engagement through innovative teaching methods[13]. - The company plans to accelerate business transformation and upgrade by exploring quality education and new markets for international Chinese language education[22]. - The company aims to build a one-stop education service platform focusing on quality education, integrating weekday academic courses with weekend quality courses[23]. - The company has successfully partnered with public schools in Guangzhou to provide quality courses and basic custody services[24]. Financial Position and Assets - As of June 30, 2021, the group's cash and cash equivalents totaled RMB 205.8 million[56]. - The current ratio as of June 30, 2021, was approximately 0.98, down from 1.06 on December 31, 2020[59]. - The leverage ratio increased to 79.4% as of June 30, 2021, compared to 75% on December 31, 2020[59]. - The group held financial assets totaling RMB 1,343 million in debt investments, representing 40.5% of total assets as of June 30, 2021[61]. - The company's debt investments at fair value totaled RMB 755,772 thousand, accounting for 22.81% of total assets, with a reported income of RMB 22,937 thousand[67]. Corporate Governance and Compliance - The company has adopted the standard code for securities trading as per the listing rules, confirming compliance by all directors during the reporting period[85]. - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, ensuring a high level of independence[83]. - The audit committee has reviewed the unaudited interim financial information and confirmed compliance with applicable accounting standards[89]. - The company will continue to review and enhance its corporate governance practices to ensure compliance with the corporate governance code[84]. Employee and Shareholder Information - The company had a total of 7,759 employees as of June 30, 2021, an increase from 6,686 employees in the previous year[75]. - Major shareholders include Elite Education Investment Co. Ltd. with 457,775,231 shares, representing approximately 54.03% of the issued share capital[100]. - As of June 30, 2021, Mr. Tang Junjing holds 459,098,231 shares, representing approximately 54.19% of the company's issued share capital[93]. Research and Development - Research and development expenses rose to RMB 85 million, up from RMB 78.6 million in the previous year, primarily due to investments related to OMO[47]. - Research and development expenses increased to RMB 84,963 thousand, compared to RMB 78,629 thousand in the previous year, reflecting a growth of 8.4%[143]. Market and Regulatory Environment - The company plans to adjust its business model in response to new regulatory policies affecting the education sector, which are expected to have a significant impact on operations[74]. - The group has committed to providing updates on any significant adverse impacts from changes in foreign investment laws that may affect its operations and financial condition[131].

Financial Performance - Total revenue for the year ended December 31, 2020, was RMB 1,687,798, a decrease of 7.9% from RMB 1,831,667 in 2019[11] - Gross profit for the same period was RMB 615,186, down 19.9% from RMB 767,623 in 2019[11] - Adjusted profit for the year was RMB 143,657, a decline of 12.9% compared to RMB 165,021 in 2019[11] - The group's revenue for the reporting period was RMB 1,687.8 million, a decrease of approximately 7.9% compared to 2019, with a decline of 11.3% in the first half of the year[19] - The adjusted profit for the reporting period was RMB 143.7 million, indicating the group's ability to maintain profitability despite challenges[19] - The group's profit decreased from approximately RMB 134.9 million in 2019 to about RMB 127.8 million during the reporting period, a decline of approximately 5.3%[60] - Adjusted profit fell by approximately 12.9% from RMB 165.0 million in 2019 to about RMB 143.7 million during the reporting period[63] - Cash and cash equivalents increased by approximately 353.2%, from RMB 196.4 million on December 31, 2019, to about RMB 693.7 million on December 31, 2020, primarily due to the redemption of financial investments in 2020[68] - The current ratio improved to approximately 1.06 as of December 31, 2020, compared to 1.04 on December 31, 2019[69] - The leverage ratio increased to 75.0% as of December 31, 2020, up from 71.2% on December 31, 2019[69] Enrollment and Tutoring Services - The number of enrollments decreased by 3.7% to 530,782 from 551,060 in 2019[11] - The number of tutoring hours provided was 12,257,069, representing a decrease of 10.5% from 13,695,534 hours in 2019[11] - The total number of students enrolled was 530,782, a decrease of about 3.7% compared to the previous year, while total tutoring hours were 12,257,069, down approximately 10.5%[19] - The overall student retention rate for 2020 was 87.5%, an increase of 4.5% compared to 2019, demonstrating the effectiveness of the online teaching model[22] - The number of students enrolled in small class tutoring decreased to 356,952 in 2020 from 382,065 in 2019, reflecting a decline of 6.5%[44] - The personalized tutoring hours increased by 7.2% in the second half of 2020 compared to the same period in 2019, indicating a recovery in demand for personalized education services[23] Operational Expansion and Strategy - The company operates 268 training centers across China, primarily located in the Guangdong-Hong Kong-Macao Greater Bay Area[7] - The number of training centers increased to 268, with 18 new centers opened during the reporting period, primarily in major cities of the Guangdong-Hong Kong-Macao Greater Bay Area[24] - The group plans to open more training centers in the Guangdong-Hong Kong-Macao Greater Bay Area to increase market share, particularly in Guangzhou and Shenzhen[32] - The group aims to leverage OMO (Online-Merge-Offline) strategies to enhance regional penetration and meet the educational needs of second- and third-tier cities[34] - The group is accelerating its acquisition pace to seek new opportunities and drive regional expansion strategies[35] Market and Competitive Position - The company was recognized as the largest K-12 extracurricular education service provider in South China and the fifth largest nationwide[8] - In Shenzhen, the overall revenue increased by 9.6% year-on-year, reflecting rapid growth in the regional market[27] - The online one-on-one business achieved continuous high growth, with revenue three times that of the same period in 2019[28] - The group implemented proactive market strategies during the pandemic, resulting in a 17.1% increase in enrollment for the summer program in Shenzhen and a 64.4% increase in other regional markets[22] Research and Development - The group's R&D expenses for the reporting period were approximately RMB 165.6 million, reflecting a strong investment in curriculum, teaching materials, and information technology systems[31] - The group has developed three major teaching systems: EES system, personalized teaching system, and full-time smart classroom, enhancing teaching quality and learning efficiency[31] Corporate Governance and Leadership - The board consists of seven directors, including three executive directors, one non-executive director, and three independent non-executive directors[99] - The company has over 22 years of experience in the education industry, with key executives having significant backgrounds in management and operations[100][102][106] - The independent non-executive directors bring over 32 years of experience in the education sector and corporate finance[111][113][114] - The executive team has been in place since the company's founding in October 1997, ensuring continuity in leadership and strategic direction[100][102][106] - The company has a strong emphasis on corporate governance, with independent directors providing oversight and independent judgment[111][112][114] - The company is committed to maintaining high standards of corporate governance and transparency in its operations[108] Shareholder Information and Compensation - The company’s major shareholders include individuals holding 5% or more of the issued shares, with Mr. Tang Junjing and Mr. Tang Junying each holding 459,079,231 shares, representing 54.03% of the issued share capital[184] - The company aims to attract, retain, and motivate employees through the stock option plan, providing a compensation mechanism linked to the group's development and profitability[179] - The restricted share unit plan was adopted to reward contributions from directors, senior management, and employees, facilitating future development and expansion efforts[177] - A total of 52,717,173 shares, equivalent to about 6.20% of the total issued shares, have been granted to employees under the restricted share unit plan[177] Risks and Challenges - The company faces significant risks including reliance on attracting students at reasonable costs, which could adversely affect business and prospects[131] - The business is subject to seasonal fluctuations, potentially leading to operational performance volatility and impacting stock prices[132] - The company’s financial performance is influenced by tuition levels and the ability to maintain and increase these fees[132] - The company’s business and financial condition have been significantly impacted by the COVID-19 pandemic[132]

Financial Performance - The company's revenue for the six months ended June 30, 2020, was RMB 769.3 million, a decrease of approximately 11.3% compared to RMB 867.4 million for the same period in 2019[28]. - The gross profit for the same period was RMB 273.9 million, reflecting a decline of 23.7% from RMB 358.8 million in 2019[28]. - The net profit for the period was RMB 53.0 million, down 29.6% from RMB 75.3 million in 2019[28]. - Adjusted net profit, excluding non-recurring items, was RMB 62.4 million, a decrease of 17.1% compared to RMB 75.3 million in 2019[28]. - The company's total revenue decreased by approximately 11.3% from RMB 867.4 million in the first half of 2019 to about RMB 769.3 million in the first half of 2020, primarily due to a decline in tutoring hours caused by the pandemic[55]. - The personalized tutoring revenue dropped by 20.8% to RMB 281.2 million, while small class tutoring revenue fell by 9.5% to RMB 375.3 million[55]. - The group’s profit for the reporting period decreased from RMB 753 million in 2019 to RMB 530 million, a decline of 29.6%[74]. - The effective tax rate dropped from 17.1% in the first half of 2019 to 4.5% during the reporting period, primarily due to certain subsidiaries receiving a preferential corporate income tax rate of 15%[73]. - Adjusted net profit fell by 17.1% from RMB 753 million in the first half of 2019 to RMB 624 million during the reporting period[78]. - Basic earnings per share decreased to RMB 6.9 cents from RMB 9.7 cents, reflecting a 29.0% drop[180]. Enrollment and Tutoring Hours - The number of enrollments during the reporting period was 260,209, an 8.2% decrease from 283,509 in 2019[28]. - Total tutoring hours amounted to 5,586,885, a decrease of 12.9% compared to 6,414,293 hours in 2019[28]. - Enrollment numbers for personalized tutoring decreased by 14.6% to 74,884, and small class tutoring saw a 5.7% decline to 175,791[58]. Operational Changes - The company operated 265 training centers as of June 30, 2020, compared to 260 centers in the previous year[28]. - Seven new training centers were opened during the reporting period, a significant decrease from 30 centers opened in 2019[28]. - The company plans to continue expanding training centers in the Greater Bay Area, aiming to enhance market share and meet growing K-12 education service demands[46]. - The online-to-offline (OMO) education strategy will be further accelerated, integrating online and offline teaching to enhance student learning experiences[44]. Employee and R&D Information - As of June 30, 2020, the company had 6,686 full-time employees, a decrease of 216 from December 31, 2019, enhancing operational efficiency[37]. - Research and development expenses amounted to approximately RMB 78.6 million, with an internal R&D team of 523 employees, reflecting a strong commitment to educational quality[40]. - Research and development expenses decreased to RMB 78.6 million from RMB 82.3 million in 2019[70]. Marketing and Expenses - Marketing expenses accounted for 11.6% of revenue, with efforts to upgrade traditional channels and expand online marketing capabilities[41]. - Selling expenses rose by approximately 47.0% to about RMB 89.2 million due to higher online advertising costs during the pandemic[66]. - Administrative expenses totaled approximately RMB 106.8 million, an increase of 11.5% compared to RMB 95.8 million in the first half of 2019[69]. Financial Position and Assets - Cash and cash equivalents as of June 30, 2020, were RMB 2,205 million, stable compared to RMB 1,964 million as of December 31, 2019[84]. - The current ratio as of June 30, 2020, was approximately 1.0, a slight decrease from 1.04 as of December 31, 2019[85]. - The leverage ratio was 71.2% as of June 30, 2020, remaining stable compared to December 31, 2019[85]. - The total assets as of June 30, 2020, amounted to RMB 2,728,076 thousand, an increase from RMB 2,764,002 thousand as of December 31, 2019[184]. - Non-current assets totaled RMB 1,572,566 thousand, up from RMB 1,476,297 thousand at the end of 2019[184]. - Current assets decreased to RMB 1,155,510 thousand from RMB 1,288,705 thousand at the end of 2019, indicating a decline of 10.3%[184]. Shareholder and Governance Information - The company has adopted the corporate governance code as per the Listing Rules, ensuring compliance and enhancing shareholder protection[116]. - The audit committee has reviewed the unaudited interim financial information and confirmed compliance with applicable accounting standards[123]. - The company has confirmed that all directors complied with the standard code for securities trading during the reporting period[119]. - The company has no plans to declare an interim dividend during the reporting period[106]. Structured Contracts and Ownership - The company is focused on expanding its K-12 extracurricular education business in China through its operating entities[144]. - The structured contracts are legally binding and enforceable under Chinese law, with no need for government approval for their establishment and execution[166]. - The company has committed to regularly disclose the overall performance and compliance of its structured contracts in its annual and interim reports[169]. - No amendments or terminations have been made to the structured contracts since their signing, and they remain in effect unless regulatory changes occur[170][171].

Financial Performance - Total revenue for 2019 reached RMB 1,831,667, an increase of 24.3% from RMB 1,473,748 in 2018[15] - Gross profit for 2019 was RMB 767,623, reflecting a growth of 28.4% compared to RMB 598,031 in 2018[15] - Net profit surged to RMB 134,881, marking an 82.3% increase from RMB 73,971 in the previous year[15] - Adjusted net profit was RMB 165,021, up 36.1% from RMB 121,265 in 2018[15] - The company's total revenue for 2019 increased by approximately 24.3% to RMB 1,831.7 million, up from RMB 1,473.7 million in 2018[38] Student Enrollment and Tutoring Services - The number of students enrolled increased to 709,393, a rise of 19.6% from 593,252 in 2018[15] - Total tutoring hours provided reached 15,488,368, an increase of 14.2% from 13,562,869 hours in 2018[15] - The number of students enrolled in small class tutoring rose by 17.9% to 540,398 in 2019, compared to 458,205 in 2018[39] - The one-to-three personalized tutoring business saw revenue growth of 87.0% compared to 2018, with a class occupancy rate exceeding 80.0%[25] - The online one-to-one tutoring business experienced a remarkable revenue growth of 1,152.2% year-on-year, significantly contributing to the overall performance[25] Operational Expansion - The number of training centers expanded to 265, up from 242 in the previous year[15] - The company opened 53 new training centers in 2019, compared to 60 in 2018[15] - The company plans to expand its training centers in the Guangdong-Hong Kong-Macao Greater Bay Area, aiming for revenue exceeding RMB 100 million in cities outside Guangzhou by 2020[29] - The company opened 53 new training centers during the reporting period, bringing the total to 265 centers, with a net increase of 973 centers from 2018 to 2019, aligning with the company's expansion strategy[24] Financial Management and Investments - Research and development expenses amounted to RMB 165.5 million, with significant improvements in teaching information technology platforms, enhancing teaching quality and student learning efficiency[25] - The company’s investment strategy focuses on low-risk, high-liquidity short-term financial products to ensure stable investment income[78] - The annual limit for purchasing short-term financial products is set by the board of directors[65] - The company has increased its net investment in low-risk financial products by RMB 509.4 million for cash management purposes[66] Awards and Recognition - The company has established a strong brand reputation, recognized with awards such as the "2018 Education Pioneer" by Yangcheng Evening News[7] - The company received several awards, including the "2018 Education Pioneer" and "2019 Shenzhen Business Leading Brand," reflecting its strong reputation in the K-12 education sector[20] Employee and Management Structure - The company employed 6,902 full-time staff and 3,839 full-time teachers, with a significant portion of new hires coming from top-tier universities[28] - The group had a total of 6,902 employees as of December 31, 2019, an increase from 6,082 in 2018, with a total equity-settled compensation cost of RMB 30.1 million during the reporting period[87] - The management team includes independent directors with extensive backgrounds in education and corporate governance, ensuring diverse perspectives[107] Market Challenges and Risks - The business performance is significantly influenced by demographic changes in China, particularly the potential impact of government family planning policies on student enrollment, which could lead to increased competition and revenue decline[129] - The education industry in China is highly competitive and fragmented, with ongoing pressure to lower prices, which could negatively affect operating profit margins and market share[131] - Increased competition may force the company to invest more in marketing and service development, potentially leading to higher operational costs and reduced profitability[132] Future Outlook and Strategic Goals - The company is exploring new market opportunities to drive growth and increase shareholder value[110] - The company aims to enhance existing courses and services to meet market changes and student demands[128] - There is a strategic focus on developing new courses and services to attract students and their parents[128] - The company plans to expand its educational centers and geographic reach to meet strategic needs[128] Dividend and Financial Position - Proposed final dividend per share is 5.3 HK cents, with a special dividend of 2.0 HK cents[15] - The company's distributable reserves as of December 31, 2019, amounted to RMB 407.7 million[160] - The company has adopted a dividend policy that considers financial condition, operational needs, and other relevant factors when deciding on dividend distribution[149]

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 867.4 million, representing a 20.0% increase from RMB 723.1 million in the same period of 2018[13]. - Gross profit for the same period was RMB 358.8 million, up 17.3% from RMB 305.9 million year-on-year[13]. - Net profit decreased by 9.1% to RMB 75.3 million, impacted by new accounting standards and initial investments in online education[13]. - The group's revenue for the six months ended June 30, 2019, was RMB 867.4 million, representing a growth of approximately 20.0% compared to the same period in 2018[16]. - The total revenue for the six months ended June 30, 2019, increased by 20.0% to approximately RMB 867.4 million from RMB 723.1 million for the same period in 2018[35]. - Net profit for the period was RMB 75,256,000, a decrease of 9% from RMB 82,823,000 in the previous year[148]. - The total comprehensive income for the period was RMB 60,203 thousand, compared to RMB 83,009 thousand in the previous year, indicating a decrease of 27.5%[166]. Student Enrollment and Tutoring Services - The number of students enrolled increased by 18.7% to 343,277 compared to 289,204 in the previous year[13]. - The number of students enrolled during the reporting period was 343,277, with total tutoring hours reaching approximately 6,737,299, reflecting increases of about 18.7% and 12.2% respectively compared to the same period in 2018[16]. - Total tutoring hours provided reached 6,737,299, a 12.2% increase from 6,003,399 hours in the prior year[13]. - The number of students enrolled in small class tutoring increased by 19.9% to 246,090 from 205,200 in the previous year[36]. - The one-to-three personalized courses launched in 2018 saw significant growth, with enrollment and total tutoring hours increasing by approximately 71.7% and 91.4% respectively during the reporting period[17]. - The student retention rate reached approximately 80.4%, up from 74.5% in the same period of 2018, while the small class tutoring maintained a stable full-class rate of 62.5%[17]. Training Centers and Expansion - The company operated 260 training centers as of June 30, 2019, up from 213 centers in the previous year[13]. - A total of 30 new training centers were opened during the reporting period, with 3 centers spun off from existing ones[14]. - The number of training centers increased to 260, with 30 new centers opened during the reporting period, primarily in major cities of the Guangdong-Hong Kong-Macao Greater Bay Area[16]. - The company plans to enhance its market penetration and expand its regional coverage, particularly in the Greater Bay Area, while upgrading existing training center facilities[21]. Research and Development - Research and development expenses amounted to RMB 82.3 million during the reporting period, with a dedicated internal R&D team of 582 employees[17]. - R&D expenses increased by approximately 4.6% to about RMB 82.3 million, maintaining a percentage of revenue at 9.5%[49]. Marketing and Strategy - Marketing expenses accounted for 7.0% of revenue, with a focus on word-of-mouth promotion and resource allocation towards R&D and teacher training[20]. - The company plans to adjust its strategy regarding online education, including divesting from its current online school business due to initial investment losses[13]. - The company aims to continuously optimize and enrich its service products, including enhancing the quality of its one-to-three tutoring courses and expanding its offerings for art examination students[22][25]. - The company intends to seek strategic alliances and acquisitions to enhance growth potential and market share in the K-12 education sector[31]. Financial Position and Assets - Cash and cash equivalents remained stable at approximately RMB 490.5 million, a slight increase of about 4.8% from RMB 468.0 million[60]. - The group held financial assets at fair value through profit or loss amounting to RMB 531.8 million as of June 30, 2019, representing 21.51% of total assets[64]. - Total assets as of June 30, 2019, were RMB 2,472,562,000, compared to RMB 1,439,622,000 as of December 31, 2018, showing significant growth in asset base[150]. - The company reported a net asset value of RMB 701,951,000, an increase from RMB 622,082,000 at the end of 2018[152]. Governance and Compliance - The board of directors did not recommend the payment of an interim dividend for the reporting period[83]. - The company has adopted the corporate governance code as per the listing rules to enhance management and protect shareholder interests[91]. - The audit committee confirmed compliance with applicable accounting standards and sufficient disclosure during the reporting period[98]. Structural Contracts and Foreign Ownership - The company operates K-12 extracurricular education in China through its Chinese operating entities due to foreign ownership restrictions[115]. - The exclusive management consulting and business cooperation agreement allows the foreign-owned enterprise to provide services to the Chinese operating entities[116]. - The company has established significant contractual agreements to ensure operational control and economic benefits from its Chinese entities[115]. - The exclusive purchase option agreements allow the foreign-invested enterprise to acquire equity interests in the group at zero or minimal cost, subject to Chinese laws[120]. - The equity pledge agreement secures all equity interests of the group as collateral for the foreign-invested enterprise, preventing any transfer without prior written consent[122]. Accounting Standards and Financial Reporting - As of January 1, 2019, the company adopted IFRS 16, resulting in the recognition of right-of-use assets amounting to RMB 981,510,000 and lease liabilities of RMB 1,006,904,000[189]. - The financial data is prepared in accordance with International Accounting Standard 34, which does not include all information and disclosures required in annual financial statements[178]. - The company has not identified any significant impact from the new and revised standards on the preparation of the interim financial data, except for IFRS 16 and IAS 28[183].

Financial Performance - Revenue for the fiscal year ended December 31, 2018, was RMB 1,473,748,000, representing a 29.1% increase from RMB 1,141,701,000 in 2017[12] - Gross profit for the same period was RMB 598,031,000, up 23.9% from RMB 482,750,000[12] - Net profit reached RMB 73,971,000, a 12.4% increase compared to RMB 65,809,000 in the previous year[12] - Adjusted net profit was RMB 121,265,000, which is a 13.8% increase from RMB 106,570,000[12] - Core business net profit was RMB 115,712,000, showing a significant increase of 27.1% from RMB 91,038,000[12] - The company's gross profit rose by 23.9% to approximately RMB 598.0 million in 2018, while the gross margin decreased to 40.6% from 42.3% in 2017[47] - The company's net profit for the year increased by 12.4% to approximately RMB 74.0 million in 2018[54] - Adjusted net profit rose by 13.8% to RMB 121.3 million in 2018, compared to RMB 106.6 million in 2017[57] Student Enrollment and Engagement - The number of students enrolled increased to 593,252, reflecting an 18.6% growth from 500,409 in 2017[12] - The total number of students enrolled in 2018 was approximately 593,252, with total tutoring hours amounting to about 13,562,869 hours, reflecting increases of approximately 18.6% and 21.3% respectively from 2017[22] - The student retention rate for the company's core academic program was approximately 84.2%, a moderate increase from 75.0% in 2017[22] - The number of students enrolled in small class tutoring rose by 19.5% to 458,205 in 2018, compared to 383,592 in 2017[41] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[84] Operational Expansion - The total number of training centers expanded to 242, with 60 new centers opened during the year[12][14] - The company opened 60 new training centers in 2018, bringing the total number of centers to 242, with 54 located in major cities of the Greater Bay Area[22] - The company plans to continue expanding its training centers, contributing to increased capital expenditures[69] - The company plans to expand its educational centers and geographic reach to meet strategic demands[112] - The company plans to explore online education in 2019, increasing budget allocation for team building, technology development, and market promotion[32] Research and Development - The internal R&D team consisted of 566 employees as of December 31, 2018, focusing on continuous improvement of courses and teaching materials[27] - Research and development expenses grew by 21.8% to approximately RMB 170.7 million in 2018, driven by increased personnel costs[52] - The company is investing $30 million in research and development for new technologies aimed at enhancing user experience[84] Market Position and Competition - The company was recognized as the largest K-12 extracurricular education service provider in South China and the fifth largest nationwide[18] - The company faces significant competition in the Chinese education sector, which may lead to pressure on pricing and a decrease in operating profit margins[115] - The education industry in China is highly competitive and fragmented, with the company facing significant competition from K-12 extracurricular education service providers[116] Financial Health and Capital Management - Cash and cash equivalents as of December 31, 2018, were approximately RMB 468.0 million, an increase of about 188.5% from RMB 162.2 million in 2017[63] - Current ratio improved to approximately 1.47 as of December 31, 2018, compared to 1.26 in 2017[64] - Leverage ratio decreased to approximately 56.8% as of December 31, 2018, down from 67.5% in 2017[64] - The company had no bank loans or other borrowings as of December 31, 2018[144] Strategic Plans and Future Outlook - The company plans to pursue strategic alliances and acquisitions to enhance service offerings and market coverage in the K-12 education sector[37] - The company has set a performance guidance of 12% revenue growth for the next fiscal year[84] - A strategic acquisition of a smaller competitor is anticipated to close by Q3, which is expected to increase overall revenue by 5%[84] Compliance and Governance - The company has confirmed compliance with relevant regulations and has not identified any significant violations, although there remains uncertainty regarding future interpretations of these regulations[124] - The company has not been involved in any major legal proceedings during the year[171] - The company has confirmed compliance with the non-competition agreements established with controlling shareholders[169] Shareholder Information - The company issued 151,400,000 shares during its IPO on December 27, 2018, with an overallotment option exercised for an additional 1,680,000 shares[106] - The board of directors has approved a dividend payout of $0.50 per share, reflecting a commitment to returning value to shareholders[84] - The board does not recommend a final dividend payment for the current year[130]