智通财经APP获悉，卓越教育集团(03978)盘中涨超6%，截至发稿，涨5.02%，报2.93港元，成交额530.75万港元。 方正证券指出，政策影响下K12行业有多个变化。校外培训合规化趋势不变，K9学科培训监管稳步收紧，高中/非学科业务政策有所放宽，管理界限更加清晰；中高考改革如火如荼，选科成为关注重点。K12教培市场规模在政策冲击下大幅下降，学科/兴趣培训的需求仍然强劲，非学科类市场的潜力逐渐显现。学科教培供给出清，机构业务转型，线下网点缩减，区域性机构在本土市场份额可观。 该行指出，公司在华南地区声誉良好，品牌、教研、渠道优势积累，近年来转移业务重心至“全日制复习＋素质教育+职业教育”，推进全日制学校快速发展，全方位布局素质教育，积极开展与职业院校合作。公司人才培养体系完善，教师留任率远超行业平均；疫情期间迅速转至线上教学，展现高效运营能力。目前公司加速推进全日制、素质教育板块，在广东省内开拓新校区，看好未来发展潜力。 ...

| --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|----------------------------------------------------| | 卓越教育集团（ 03978 ） | | 证券研究报告 \n2024 年 04 月 01 日 | | | 投资评级 | | | 业绩高增，启动成长 | 行业 非必需性消费 | / 支援服 务 | | 发布 23 年财报，业绩高增 | 6 | 个月评级 买入（维持评级） | | | 当前价格 | 3.01 港元 | | 公司 2023 年收入 4.8 ...

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 489,314 thousand, a slight decrease of 0.4% compared to RMB 491,134 thousand in 2022[7] - Gross profit increased by 32.8% to RMB 229,858 thousand from RMB 173,061 thousand year-over-year[7] - Net profit for the year rose significantly by 66.2% to RMB 89,880 thousand, compared to RMB 54,073 thousand in the previous year[7] - Adjusted net profit was RMB 89,225 thousand, reflecting a 62.8% increase from RMB 54,799 thousand in 2022[7] - The company reported a basic and diluted earnings per share of RMB 12.12, up from RMB 7.48 in the prior year[3] - The net profit for the year ended December 31, 2023, was RMB 89,880,000, representing a 66.2% increase from RMB 54,073,000 in 2022[59] - Adjusted net profit for the same period was RMB 89,225,000, up 62.8% from RMB 54,799,000 in 2022[59] - The company reported a profit of RMB 91,246,000 for the year ended December 31, 2023, compared to RMB 56,287,000 in 2022, marking an increase of 62.1%[190] - Basic earnings per share for 2023 were RMB 12.12, up from RMB 7.48 in 2022, reflecting a growth of 62.1%[190] Assets and Liabilities - Non-current assets totaled RMB 534,264 thousand, an increase from RMB 455,119 thousand in 2022[4] - Cash and cash equivalents increased to RMB 281,928 thousand from RMB 195,084 thousand year-over-year[4] - For the year ended December 31, 2023, the group reported total liabilities of RMB 410,948,000, an increase of 28.9% from RMB 318,866,000 in 2022[22] - The net assets of the group as of December 31, 2023, were RMB 496,435,000, reflecting a growth of 22.3% compared to RMB 405,890,000 in 2022[22] - The company's total assets as of December 31, 2023, were RMB 68,977,000, down from RMB 117,942,000 in 2022, indicating a decrease of 41.5%[54] - The company's liabilities decreased to RMB 33,315,000 in 2023 from RMB 46,058,000 in 2022, a reduction of 27.7%[58] - The company's total liabilities include overdue debt instruments valued at RMB 68,059,000 as of December 31, 2023[79] Income and Expenses - The company experienced a decrease in other income, which fell to RMB 29,390 thousand from RMB 55,970 thousand in the previous year[3] - Administrative expenses decreased to RMB 57,886 thousand from RMB 88,694 thousand, indicating improved cost management[3] - Employee costs for the year were RMB 132,005,000, down from RMB 191,586,000 in 2022, indicating a reduction of 30.9%[47] - Depreciation and amortization expenses were RMB 74,246,000, compared to RMB 82,833,000 in 2022, representing a decrease of 10.4%[47] - Other operating expenses decreased by 56.3% to RMB 30.7 million during the reporting period[111] - The company recorded financing costs of approximately RMB 9.0 million, primarily due to interest on lease liabilities[113] Revenue Breakdown - The total revenue from full-time review programs, quality education, and tutoring projects is not detailed but is a significant part of the group's operations in mainland China[40] - The total revenue for the full-time review business reached RMB 204.76 million, an increase of 25.2% compared to RMB 163.52 million in 2022[96] - Quality education revenue surged by 71.1% to RMB 139.41 million from RMB 81.50 million in the previous year[96] - The tutoring project revenue decreased by 40.9% to RMB 144.92 million from RMB 245.36 million in 2022[96] - The overall sales cost decreased by 18.4% to RMB 259.5 million from RMB 318.1 million in 2022, attributed to improved personnel and operational efficiency[97] Corporate Governance and Compliance - The company has no controlling shareholder or ultimate controller as of December 31, 2023, due to the absence of shareholders with majority voting rights[11] - The group has adopted the corporate governance code as per the listing rules, emphasizing the importance of good corporate governance for improving management and protecting shareholder interests[148] - The audit committee has reviewed the group's accounting principles and practices, ensuring compliance with applicable accounting standards and sufficient disclosure[170] Strategic Initiatives - The company has established an "Innovation Division" to enhance organizational agility and promote the incubation and development of innovative businesses[72] - The company aims to reduce the urban-rural education gap by donating educational materials and upgrading hardware facilities to remote schools[72] - The company has actively participated in community service activities, including the "Future Youth" summer public welfare series, to foster cultural confidence among children[73] - The company is actively responding to national policies by accelerating the acquisition of "non-subject profit licenses" to adapt to the "double reduction policy" in the education sector[84] - The company has developed nine quality education products, which have been recognized by the Guangdong provincial education authorities, enhancing its brand image in quality education[85] - The company is focusing on digital transformation by utilizing cloud computing, big data, and artificial intelligence to improve teaching quality and student learning experiences[84] - The company aims to expand its presence in the Guangdong-Hong Kong-Macao Greater Bay Area, particularly in economically active cities like Shenzhen and Foshan[76] - The company is innovating its after-school service model through pilot programs to meet the diverse needs of users in the Greater Bay Area[76] - The company is committed to developing vocational education programs tailored to the needs of students, with a focus on high-quality learning outcomes[87] - The group is committed to developing vocational education products and establishing strategic partnerships with various educational institutions[105] Future Outlook - The group plans to leverage AI technology to create a precise teaching system that integrates AI with holistic education[92] - The company aims to enhance its quality education product ecosystem and explore innovative learning models to support sustainable growth[91] - The group anticipates that the application of all other revised international financial reporting standards will not have a significant impact on the consolidated financial statements in the foreseeable future[28] Taxation - The company has no taxable profits in Hong Kong for the year ended December 31, 2023, and thus no tax provisions were made[50] - The company confirmed a tax rate of 25% for its subsidiaries in China for both 2023 and 2022[188] Shareholder Information - The annual general meeting for shareholders is scheduled for May 16, 2024[164] - The company will suspend share transfer registration from May 11 to May 16, 2024, to determine eligibility for attending the annual general meeting[165] - The company will also suspend share transfer registration from May 22 to May 27, 2024, to determine eligibility for the proposed final dividend[171]

Investment Rating - The report assigns a rating of "Buy" for the company, indicating a positive outlook for future performance [6]. Core Insights - The company has experienced a significant decline in revenue, with a 30% year-over-year decrease in H1 2023, resulting in total revenue of 1.89 billion CNY [10][11]. - The gross profit for H1 2023 was 0.7 billion CNY, with a gross margin of 37% [10]. - The company is focusing on compliance and transformation in response to regulatory changes, particularly in the K9 education sector, shifting towards high school tutoring and quality education training [10][41]. Summary by Sections Company Overview - Established in October 1997, the company has evolved from a local education provider in Guangzhou to a national player with multiple branches across China [6][7]. - The company went public on the Hong Kong Stock Exchange in 2018 and has since expanded its service offerings [6]. Financial Performance - In H1 2023, the company's revenue was 1.89 billion CNY, down 30% from the previous year, with a net profit of 0.21 billion CNY, reflecting an 11% margin [10][11]. - The revenue breakdown shows that full-time tutoring accounted for 55% of total revenue, while tutoring projects contributed 30% and quality education made up 15% [10]. Market Trends - The quality education market is expected to grow significantly, with projected revenues of 0.99 billion CNY in 2023, 1.32 billion CNY in 2024, and 1.73 billion CNY in 2025, reflecting growth rates of 22%, 33%, and 31% respectively [5]. - The overall market for quality education training is anticipated to reach 715.2 billion CNY by 2023, with a compound annual growth rate (CAGR) of 9.43% over the next five years [41]. Regulatory Environment - The report highlights the ongoing regulatory changes in the education sector, particularly the "double reduction" policy, which has led to a significant reduction in the number of academic training institutions [18][27]. - The company is adapting to these changes by focusing on non-academic training and compliance with new standards set by local governments [27][30]. Business Strategy - The company is strategically shifting its focus towards full-time education and quality training, with a notable increase in the proportion of full-time tutoring services [10][41]. - The management team is well-structured, with a high ownership stake among the founders, ensuring alignment with the company's long-term vision [9].

智通财经APP获悉，卓越教育集团(03978)再涨超18%，1月24日至今累计涨幅超2倍。截至发稿，涨10.57%，报2.93港元，成交额3082.97万港元。 消息面上，2月8日，教育部发布《校外培训管理条例（征求意见稿）》。方正证券指出，K12方面，双减期间供给大幅收缩，且新供给进入门槛较双减前更高，旺盛需求下龙头有望充分受益，中长期看市占率有望超双减前。 天风教育则指出，卓越教育集团为华南地区最大及全国第五大K12课外教育服务提供商。双减后积极响应政策号召，全面推进素质教育课程，伴随业务逐步调整、运营成熟，网点逐步扩张，市场份额有望提升。 ...

Investment Rating - The report initiates coverage with a "Buy" rating for the company, projecting a relative return of over 20% within the next six months [19][33][47]. Core Insights - The company is positioned as the largest extracurricular education service provider in South China and the fifth largest nationwide, focusing on K12 personalized education services. It aims to diversify its business layout and actively respond to policy changes by promoting quality education courses [29][40][75]. - The report anticipates revenue growth for the company, projecting revenues of 4.72 billion, 6.84 billion, and 9.92 billion RMB for the years 2023 to 2025, with corresponding net profits of 0.5 billion, 1.2 billion, and 2.3 billion RMB [19][33]. - The personalized education sector is expected to have significant growth potential, driven by strong future demand and a favorable policy environment [3][31][32]. Summary by Sections Revenue and Profitability - In the first half of 2023, the company reported a net profit of 0.17 billion RMB, a year-on-year increase of 4730.7%, with a net profit margin of 10.55% and a gross profit margin of 36.95% [30][63]. - The revenue from tutoring services in 2022 was 2.45 billion RMB, with a decline of 55.6% in the first half of 2023 compared to the previous year [2][43]. Market Trends - The education market in China is steadily expanding, with the K12 education sector accounting for a significant portion of the overall market. The market size for quality education is projected to exceed 4.787 trillion RMB in 2023 [44][67]. - The report highlights a shift in the education landscape due to the exit of smaller, less qualified institutions, which creates opportunities for leading companies to increase their market share [32][44]. Business Strategy - The company is actively exploring new business avenues, including full-time education, vocational training, and quality education, while leveraging technology to enhance its educational offerings [45][29]. - The establishment of an "Innovation Division" aims to foster the development of new business lines and improve operational efficiency [16][45]. Future Outlook - The report projects a recovery in profitability and a gradual adjustment of business operations, with expectations for market share to continue increasing as the company expands its network [19][33]. - The anticipated earnings per share (EPS) for 2023, 2024, and 2025 are 0.06, 0.14, and 0.27 RMB, respectively, with price-to-earnings (PE) ratios of 41, 17, and 9 times [19][33].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 188.86 million, a decrease of 29.6% compared to RMB 268.45 million for the same period in 2022[14] - Gross profit for the same period was RMB 69.78 million, down 42.6% from RMB 121.67 million year-on-year[14] - Net profit increased significantly to RMB 20.15 million, representing a 263.3% increase from RMB 5.55 million in the previous year[14] - Adjusted net profit for the period was RMB 20.23 million, a 199.1% increase compared to RMB 6.77 million in the prior year[14] - Total revenue for the first half of 2023 was approximately RMB 188.9 million, a decrease of 29.6% compared to RMB 268.4 million in the same period of 2022[40] - Full-time review projects generated revenue of RMB 103.6 million, up 15.6% from RMB 89.6 million year-on-year[22] - Quality education revenue dropped by 43.7% to RMB 28.0 million from RMB 49.8 million in the previous year[22] - Tutoring projects saw a significant decline of 55.6%, with revenue falling to RMB 57.3 million from RMB 129.0 million[22] - The group's revenue from various educational services decreased to RMB 119.1 million, down 18.9% from RMB 146.8 million in the first half of 2022[60] - Gross profit fell to RMB 69.8 million, a decline of 42.6% from RMB 121.7 million in the first half of 2022, resulting in a gross margin of 36.9% compared to 45.3% previously[61] - The group's profit increased by 263.3% to RMB 20.2 million from RMB 5.5 million in the first half of 2022[65] - Adjusted net profit rose by 199.1% to RMB 20.2 million from RMB 6.8 million in the first half of 2022[66] Strategic Initiatives - The company has established a new educational framework combining quality education, vocational education, and full-time education in response to the "double reduction policy" impacting the education sector[5] - The company is focusing on the core strategic system of "full-time review + quality education + vocational education" to explore new business opportunities in the quality and vocational education sectors[52] - The establishment of the "Innovation Division" aims to enhance organizational agility and promote the incubation and development of innovative businesses[31] - The company is actively responding to national policies to deepen its layout in quality education and enhance the core competencies of primary and secondary school students[34] - The group has formed comprehensive strategic partnerships with vocational colleges to tailor closed management courses for students[20] - The company plans to leverage technology to empower precise teaching systems, optimizing teaching models to ensure high-quality educational content delivery[33] - Future plans include expanding cooperation with more primary and secondary schools to innovate and provide valuable products and services[78] - The group will focus on vocational education product exploration and open vocational certificate training courses, leveraging its advantages in Guangdong Province[80] Cost Management - Income tax expenses decreased by 72.6% to RMB 3.1 million from RMB 11.3 million in the first half of 2022[24] - Total sales expenses significantly decreased by approximately 77.1% to RMB 7.0 million from RMB 30.5 million in the first half of 2022[62] - Administrative expenses were approximately RMB 28.6 million, a reduction of 35.5% from RMB 44.4 million in the first half of 2022[63] - Other operating expenses for the reporting period were RMB 14.3 million, a decrease of approximately 65.5% compared to RMB 41.3 million in the first half of 2022[89] - Financing costs amounted to approximately RMB 4.6 million, down 41.0% from RMB 7.7 million in the first half of 2022[90] Cash and Investments - As of June 30, 2023, the current ratio was approximately 1.29, slightly down from 1.30 on December 31, 2022[69] - As of June 30, 2023, the group's bank balances and cash totaled RMB 164.5 million[94] - The group's leverage ratio was 50% as of June 30, 2023, a decrease from 53% on December 31, 2022[95] - The group held financial assets including debt investments of RMB 80.1 million and equity investments of RMB 48.9 million as of June 30, 2023[97] - The company adopts a prudent investment strategy, focusing on low-risk short-term financial products to ensure stable investment income while maintaining sufficient operating capital for business needs[122] - The total cash and restricted cash combined was RMB 183,577,000 as of June 30, 2023, down from RMB 203,183,000 as of December 31, 2022, indicating a decrease of about 9.7%[175] - Restricted bank deposits increased to RMB 19,040,000 as of June 30, 2023, compared to RMB 8,099,000 as of December 31, 2022, reflecting an increase of approximately 134.0%[175] Corporate Governance - The company emphasizes the importance of good corporate governance to enhance management and protect shareholder interests[128] - The audit committee has reviewed the unaudited interim financial information and believes the company has complied with all applicable accounting standards and requirements[132] - The company has confirmed compliance with the corporate governance code and has no knowledge of any non-compliance by senior management during the reporting period[130] - The company has adopted the corporate governance code as part of its governance practices[128] Shareholder Information - Major shareholders include Mr. Tang Junjing, holding 459,098,231 shares, representing approximately 54.19% of the issued shares[135] - The company aims to attract and retain skilled personnel through its restricted share unit plan, which is designed to reward contributions to the group's future development[199] Legal and Regulatory Compliance - The company has confirmed that its structural contracts remain unchanged despite related transactions to comply with regulatory requirements[119] - As of June 30, 2023, the company had no undisclosed significant contingent liabilities, guarantees, or lawsuits against it[123] - The company has committed to disclosing any significant adverse impacts from foreign investment law updates as they arise[197] Employee and Operational Insights - The company provides regular training to employees and teachers to keep them updated on market and student needs[126] - The company reported employee benefits and salaries payable of RMB 39,114,000 as of June 30, 2023, compared to RMB 41,611,000 as of December 31, 2022, reflecting a decrease of 6%[187] - Rental expenses from the final controlling party amounted to RMB 791,000 for the six months ended June 30, 2023, up from RMB 234,000 in the same period of 2022, indicating a growth of 237%[190] Related Party Transactions - The total liabilities to related parties decreased from RMB 737,000 as of December 31, 2022, to RMB 227,000 as of June 30, 2023, showing a reduction of 69%[179] - The company reported a total of RMB 4,884,000 in receivables from related parties as of June 30, 2023, unchanged from the previous period[179] - The company reported a total of RMB 90,559,000 in other payables as of June 30, 2023, compared to RMB 93,455,000 as of December 31, 2022, indicating a slight decrease of 3%[187]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 188,860 thousand, a decrease of 29.6% compared to RMB 268,445 thousand in the same period of 2022[2]. - Gross profit for the same period was RMB 69,780 thousand, down 42.6% from RMB 121,671 thousand year-on-year[2]. - Net profit increased significantly to RMB 20,152 thousand, representing a 263.3% increase from RMB 5,547 thousand in the prior year[2]. - Adjusted net profit for the six months was RMB 20,234 thousand, a rise of 199.1% compared to RMB 6,766 thousand in the previous year[2]. - Total comprehensive income for the period was RMB 20,152 thousand, compared to RMB 5,547 thousand in the same period last year[16]. - Basic and diluted earnings per share for the six months ended June 30, 2023, were RMB 2.78 cents, up from RMB 0.7 cents in the prior year[14]. - The profit used to calculate basic and diluted earnings for the period is RMB 20,917,000, compared to RMB 5,232,000 in the previous year, indicating strong growth[67]. - The group's gross profit decreased by 42.6% from RMB 121.7 million in the first half of 2022 to RMB 69.8 million during the reporting period, with a gross margin of 36.9% compared to 45.3% in the previous period[89]. - The adjusted net profit increased by 199.1% from RMB 6.8 million in the first half of 2022 to RMB 20.2 million during the reporting period[124]. - The income tax expense for the reporting period was RMB 3.1 million, a decrease of 72.6% from RMB 11.3 million in the first half of 2022[121]. Assets and Liabilities - Non-current assets as of June 30, 2023, totaled RMB 457,066 thousand, slightly up from RMB 455,119 thousand as of December 31, 2022[7]. - Current assets decreased to RMB 407,657 thousand from RMB 414,563 thousand at the end of the previous year[7]. - The company's net assets increased to RMB 428,149 thousand from RMB 405,890 thousand as of December 31, 2022[18]. - The group's bank balance and cash amounted to RMB 164.5 million as of June 30, 2023[126]. - The group's leverage ratio decreased to 50% as of June 30, 2023, down from 53% on December 31, 2022[100]. - The group has no bank loans or other borrowings as of June 30, 2023, compared to RMB 95.5 million as of June 30, 2022[142]. Revenue Breakdown - Revenue from full-time review projects was RMB 103,573,000, up from RMB 89,611,000 in 2022, indicating an increase of about 15.5%[24]. - Revenue from quality education decreased by 43.7% to RMB 28,025 thousand, down from RMB 49,822 thousand in the previous year[87]. - Revenue from tutoring projects fell by 55.6% to RMB 57,262 thousand, compared to RMB 129,012 thousand in the same period last year[87]. - The group's revenue from tutoring services declined by 29.6% from RMB 268.4 million in the first half of 2022 to approximately RMB 188.9 million during the reporting period due to business adjustments[115]. Expenses and Cost Management - The company reported a significant reduction in administrative expenses, which fell to RMB 28,640 thousand from RMB 44,397 thousand year-on-year[14]. - The total employee costs for the period were RMB 84,749,000, down from RMB 148,980,000 in 2022, a reduction of about 43.1%[27]. - Research and development costs recognized as expenses amounted to RMB 12,673,000, significantly lower than RMB 35,315,000 in the previous year, a decrease of approximately 64.0%[27]. - The group's total operating expenses decreased by approximately 65.5% to RMB 14.3 million from RMB 41.3 million in the first half of 2022[93]. - The group's sales expenses decreased by approximately 77.1% to RMB 7.0 million from RMB 30.5 million in the first half of 2022[118]. - Financing costs amounted to approximately RMB 4.6 million, a decrease of 41.0% from RMB 7.7 million in the first half of 2022[156]. Strategic Initiatives - The company operates primarily in the education sector, providing various educational programs including full-time review and quality education services[37]. - The company has established comprehensive strategic partnerships with vocational schools, focusing on tailored educational programs to enhance student learning efficiency[57]. - The group aims to accelerate the development of a second growth curve by exploring new business opportunities in quality education and vocational training[59]. - The company plans to strengthen cooperation with more primary and secondary schools to provide valuable after-school quality courses[61]. - The company is committed to leveraging technology to optimize its teaching systems and improve student learning experiences[76]. - The company intends to explore vocational education products, capitalizing on its resources and research experience in the field[84]. - The importance of vocational education has been emphasized by national policies, indicating potential market growth in this sector[164]. Corporate Governance and Future Outlook - The company has applied new International Financial Reporting Standards starting January 1, 2023, with no significant impact on the financial statements[22]. - The company continues to expect sufficient resources to operate as a going concern in the foreseeable future[38]. - The group has established an "Innovation Division" to enhance organizational agility and promote the incubation and development of innovative businesses[163]. - The group is actively participating in community service initiatives, demonstrating its commitment to social responsibility and educational equity[58]. - The board has resolved not to declare an interim dividend for the six months ended June 30, 2023[144]. - The company has not declared any dividends for the reporting period, as decided by the board[66].

Financial Performance - The total revenue for the year ended December 31, 2022, was RMB 491.134 million, a decrease of 74.1% compared to RMB 1,898.627 million in 2021[139]. - Gross profit for the same period was RMB 173.061 million, down 76.3% from RMB 729.347 million in the previous year[139]. - The net profit for 2022 was RMB 54.073 million, a significant improvement from a loss of RMB 325.593 million in 2021, representing a 116.6% increase[139]. - The adjusted net profit for the year was RMB 54.799 million, compared to a loss of RMB 331.507 million in 2021, marking a 116.5% improvement[139]. - Other income decreased by 29.7% to RMB 56.0 million during the reporting period[172]. - Administrative expenses totaled approximately RMB 88.7 million during the reporting period, a decrease of 60.2% compared to RMB 223.0 million in 2021[189]. - The leverage ratio improved to 0.53 as of December 31, 2022, down from 0.73 on December 31, 2021[186]. - The current ratio improved to approximately 1.30 as of December 31, 2022, up from 0.94 on December 31, 2021[198]. Business Risks and Challenges - The company faces risks related to the concentration of its business in Guangzhou, which may impact its operational performance[24]. - The company relies on a dedicated teaching staff, and failure to recruit and retain qualified teachers may adversely affect its brand and operational performance[23]. - The company is subject to regulatory changes in the education sector, as outlined in the guidelines issued by the Ministry of Education[9]. - The company must ensure compliance with applicable laws and regulations when granting Restricted Share Units[85]. - The company ceased its subject-based training services for compulsory education since January 2022 due to regulatory policies, significantly impacting its original business and revenue[118]. - The company will continue to monitor the regulatory environment and adjust its business plans accordingly[118]. Strategic Initiatives - The company has focused on optimizing its educational offerings, achieving significant breakthroughs in quality education products, with several programs recognized as non-subject products by the Ministry of Education[133]. - The company is actively expanding its full-time business segment and opening new campuses within the Guangdong province[140]. - The strategic focus has shifted towards the Greater Bay Area, leveraging accumulated resources to explore new growth avenues[140]. - The company is enhancing its brand image and operational efficiency through the implementation of a precise teaching system and technology-driven educational services[140]. - The group aims to create an integrated learning environment to support children's healthy growth and development[142]. - The group is accelerating the development of its second growth curve, focusing on a core strategic system of "full-time review + quality education + vocational education" to provide comprehensive teaching services[150]. - The group aims to expand its full-time review business and explore new markets nationwide, leveraging technology to optimize teaching models and enhance service quality[151]. - The group plans to create a one-stop quality education base, integrating diverse quality education products to enhance student interest and provide more choices[153]. - The group is committed to building a comfortable self-study environment for students, promoting good learning habits and improving learning soft skills[157]. Shareholder and Governance Information - The board consists of nine directors, including three executive directors and four independent non-executive directors[48]. - The group has not engaged in any significant transactions with controlling shareholders during the reporting period[60]. - The group has not issued any dividends during the reporting period and will continuously review its policy on dividend distribution[40]. - The board did not propose any dividends during the reporting period[119]. - The company’s directors and CEO hold significant equity interests, with Mr. Tang Junjing owning 459,098,231 shares, representing 54.19% of the issued share capital[108]. Investment and Financial Assets - As of December 31, 2022, the group held financial assets including debt investments of RMB 104.2 million, which accounted for 12.0% of total assets[190]. - The group's equity investments amounted to RMB 59.8 million, representing 6.9% of total assets as of December 31, 2022[190]. - The group's cash and bank balances were RMB 195.1 million as of December 31, 2022[197]. - The group has no plans for major investments or capital assets as of the report date[199]. - The group adopts a prudent investment strategy for significant investments, focusing on low-risk short-term financial products to ensure stable investment income[200]. Employee Incentives - The group has adopted a restricted share unit plan and stock option plan as incentives for directors and eligible employees[65]. - The stock options plan aims to attract and retain employees and directors by providing compensation linked to the group's development and profitability[80]. - The maximum number of shares that may be issued upon exercise of stock options under the plan is 84,804,000 shares, representing approximately 10% of the total shares issued as of the listing date and the report date[93]. - No stock options were granted, exercised, canceled, or revoked during the reporting period, and there were no unexercised stock options as of December 31, 2022[105]. - The plan allows for the issuance of shares based on the performance and contributions of selected participants[87]. - The board has discretion in determining the vesting criteria, conditions, and timelines for the Restricted Share Units[87].

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 491,134 thousand, a decrease of 74.1% compared to RMB 1,898,627 thousand in 2021[11]. - Gross profit for the same period was RMB 173,061 thousand, down 76.3% from RMB 729,347 thousand in 2021[11]. - Net profit for the year was RMB 54,073 thousand, a significant improvement of 116.6% from a loss of RMB 325,593 thousand in 2021[11]. - Adjusted net profit was RMB 54,799 thousand, also showing a 116.5% increase from a loss of RMB 331,507 thousand in the previous year[11]. - Basic earnings per share for 2022 was RMB 7.48, compared to a loss of RMB 43.2 in 2021[13]. - Total revenue for the company in 2022 was RMB 491,134 thousand, a significant decrease from RMB 1,898,627 thousand in 2021[49]. - The group recorded a profit of approximately RMB 54.1 million in the reporting period, a significant increase of 116.6% compared to a loss of RMB 325.6 million in 2021[148]. - The group's adjusted net profit increased by 116.5% from RMB -331.5 million in 2021 to RMB 54.8 million during the reporting period[172]. Assets and Liabilities - Current liabilities decreased from RMB 149,685 thousand in 2021 to RMB 93,455 thousand in 2022[10]. - Total assets less current liabilities increased from RMB 500,826 thousand in 2021 to RMB 550,816 thousand in 2022[10]. - The company reported a net asset value of RMB 405,890 thousand as of December 31, 2022, up from RMB 350,604 thousand in 2021[17]. - Non-current assets totaled RMB 455,119 thousand as of December 31, 2022, down from RMB 546,689 thousand in 2021[35]. - The company’s lease liabilities were RMB 144,926 thousand as of December 31, 2022, compared to RMB 150,222 thousand in 2021[36]. - The company’s debt decreased from RMB 316,047,000 in 2021 to RMB 46,058,000 in 2022, indicating a substantial reduction in liabilities[69]. - The group's current ratio improved to approximately 1.30 as of December 31, 2022, up from 0.94 on December 31, 2021[152]. - The leverage ratio decreased to 0.53 as of December 31, 2022, down from 0.73 in 2021[176]. Revenue Sources - Revenue from full-time review programs was RMB 163,520 thousand in 2022, slightly up from RMB 161,639 thousand in 2021[49]. - Revenue from quality education reached RMB 81,502 thousand in 2022, compared to RMB 73,956 thousand in 2021[49]. - The company achieved a revenue of RMB 95,138,000 from tutoring projects for the year ended December 31, 2022, while the revenue from tutoring projects for 2021 was RMB 747,193,000[77]. - Full-time review revenue increased by 1.2% to RMB 163.5 million, while tutoring project revenue decreased by 85.2% to RMB 245.4 million[112]. Operational Changes - The company ceased providing academic courses to K-9 students at the end of 2021 due to regulatory changes and shifted focus to full-time review courses and quality education[25]. - The company is focusing on vocational education and has established strategic partnerships with vocational schools to enhance educational offerings[131]. - The company aims to expand its full-day education business and enhance its development momentum[1]. - The company plans to deepen its quality education layout and establish a one-stop quality education base[1]. - The company will explore vocational education and strengthen strategic partnerships with private colleges and vocational schools[1]. - The company is expanding its full-time business segment by opening new campuses in Guangdong Province[130]. - The company is exploring new growth avenues in the Greater Bay Area to mitigate the impact of the "double reduction" policy and COVID-19[129]. Cost Management - The company reported a loss of RMB 191,586,000 in employee costs for 2022, down from RMB 747,143,000 in 2021, reflecting a reduction in operational expenses[56]. - Total employee costs amounted to RMB 270,488,000, a significant increase from RMB 944,977,000 in the previous year[1]. - Research and development costs recognized as expenses totaled RMB 55,725,000, compared to RMB 142,310,000 last year[1]. - Administrative expenses decreased by 60.2% to approximately RMB 88.7 million from RMB 223 million in 2021[119]. - Other operating expenses decreased by 57.1% to RMB 70.2 million during the reporting period[147]. - Total sales expenses decreased by approximately 82.1% from RMB 181 million in 2021 to RMB 32.4 million[167]. Corporate Governance - The board of directors consists of eight members, with three being independent non-executive directors, meeting the requirements of listing rules[195]. - The remuneration committee has three members, with two being independent non-executive directors, thus complying with the relevant listing rules[199]. - The company has confirmed compliance with the corporate governance code during the reporting period[190]. - The board will continue to review and monitor the company's practices to maintain high corporate governance standards[198]. - The company has not been made aware of any non-compliance by senior management during the reporting period[190]. - The independent non-executive director, Mr. Gan Jun, was appointed on September 23, 2022, and serves as the chairman of the audit committee[199]. Recognition and Community Engagement - The company has received various recognitions for its contributions during the pandemic, enhancing its brand reputation[1]. - The company has implemented a community-centered model to enhance its influence and provide diverse educational options for students[135]. - The company has successfully launched several non-academic products, including programming and literary courses, which have received high recognition from society and students[75]. - The company has implemented a new learning space to support self-study and improve students' learning habits[1].