[Financial & Business Performance Highlights](index=1&type=section&id=Financial%20%26%20Business%20Performance%20Highlights) [Overall Financial Highlights (Q1 FY2021)](index=1&type=section&id=Overall%20Financial%20Highlights%20(Q1%20FY2021)) In Q1 FY2021, Bright Scholar experienced year-over-year declines in key financial metrics, with revenue decreasing by **4.2% to RMB 1,051.5 million** and net income falling by **6.6% to RMB 190.9 million**, reflecting pandemic impacts Q1 FY2021 Financial Highlights (YoY) | Metric | Q1 FY2021 (RMB Million) | Q1 FY2020 (RMB Million) | YoY % Change | | :--- | :--- | :--- | :--- | | Revenue | 1,051.5 | 1,098.0 | (4.2)% | | Gross Profit | 442.8 | 473.8 | (6.5)% | | Operating Income | 228.4 | 267.2 | (14.5)% | | Net Income | 190.9 | 204.3 | (6.6)% | | Adjusted Net Income | 197.1 | 223.0 | (11.6)% | | Adjusted EBITDA | 320.6 | 352.5 | (9.0)% | | Basic EPS (RMB) | 1.56 | 1.59 | (1.9)% | [Business Segment Performance](index=1&type=section&id=Business%20Segment%20Performance) The Domestic K-12 Schools segment drove growth with a **10.9% revenue increase**, while Overseas Schools faced significant pandemic impacts, and Education Technology saw **64.0% revenue growth** due to acquisition Q1 FY2021 Performance by Business Segment | Segment | Revenue (RMB Million) | % of Total Revenue | YoY Revenue Change | Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Domestic K-12 Schools | 742.4 | 70.6% | +10.9% | 48.8% | | Overseas Schools | 134.2 | 12.8% | N/A | 12.8% | | Education Technology | 36.7 | 3.5% | +64.0% | 54.8% | | Complementary Education | 138.2 | 13.1% | N/A | 31.2% | - The average number of students in Domestic K-12 schools increased by **11.7%** year-over-year to **54,318**[4](index=4&type=chunk) - The Overseas Schools segment reported a **negative operating margin of (39.0%)**, highlighting the severe impact of the COVID-19 pandemic[6](index=6&type=chunk) [Management Discussion and Strategy](index=3&type=section&id=Management%20Discussion%20and%20Strategy) [Management Commentary and Strategic Pillars](index=3&type=section&id=Management%20Commentary%20and%20Strategic%20Pillars) Management highlighted strong domestic recovery and growth, outlining a four-pillar strategy for FY2021 focused on organic K-12 growth, cost management, acquisition integration, and EdTech investment - The company's FY2021 strategy focuses on four key pillars: **1) Organic growth in domestic K-12, 2) Cost management, 3) Integration planning for synergies, and 4) Investment in EdTech and strategic acquisitions**[8](index=8&type=chunk) - Domestic K-12 enrollment demonstrated strong demand, with growth of **9.7% in international schools, 8.0% in bilingual schools, and 17.0% in kindergartens**[9](index=9&type=chunk) - While overseas study counseling revenue dropped by **49.4%**, domestic after-school training and study camps grew by **7.7% and 635.3%** respectively, indicating a shift in market opportunities[10](index=10&type=chunk) - Management is focused on cost reduction and efficiency improvements in the overseas business to position it for a strong profitability rebound once the operating environment normalizes[10](index=10&type=chunk) [Detailed Financial Results (Q1 FY2021)](index=4&type=section&id=Detailed%20Financial%20Results%20(Q1%20FY2021)) [Revenue](index=4&type=section&id=Revenue) Total revenue for Q1 FY2021 decreased **4.2% YoY to RMB 1,051.5 million**, driven by a **48.2% drop in Overseas Schools revenue**, partially offset by **10.9% growth in Domestic K-12** and **64.0% in Education Technology** Revenue by Segment (Q1 FY2021 vs Q1 FY2020) | Segment | Q1 FY2021 (RMB Million) | Q1 FY2020 (RMB Million) | YoY % Change | | :--- | :--- | :--- | :--- | | Domestic K-12 Schools | 742.4 | 669.7 | 10.9% | | Overseas Schools | 134.2 | 259.2 | (48.2)% | | Education Technology | 36.7 | 22.4 | 64.0% | | Complementary Education | 138.2 | 146.7 | (5.8)% | | **Total** | **1,051.5** | **1,098.0** | **(4.2)%** | [Cost of Revenue, Gross Profit, and Gross Margin](index=5&type=section&id=Cost%20of%20Revenue%2C%20Gross%20Profit%2C%20and%20Gross%20Margin) Cost of revenue decreased **2.5% to RMB 608.7 million** due to cost control, leading to a **6.5% decline in gross profit to RMB 442.8 million** and a **100 basis point contraction in gross margin to 42.1%** - The reduction in cost of revenue was primarily due to effective cost control and streamlining initiatives for overseas operations to mitigate the impact of COVID-19[14](index=14&type=chunk) Gross Profit by Segment (Q1 FY2021 vs Q1 FY2020) | Segment | Q1 FY2021 Gross Profit (RMB Million) | Q1 FY2021 Gross Margin (%) | Q1 FY2020 Gross Profit (RMB Million) | Q1 FY2020 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Domestic K-12 Schools | 362.4 | 48.8% | 325.1 | 48.5% | | Overseas Schools | 17.2 | 12.8% | 83.4 | 32.2% | | Education Technology | 20.2 | 54.8% | 14.4 | 64.5% | | Complementary Education | 43.0 | 31.2% | 50.9 | 34.7% | | **Total** | **442.8** | **42.1%** | **473.8** | **43.1%** | [Selling, General & Administrative (SG&A) Expenses](index=5&type=section&id=Selling%2C%20General%20%26%20Administrative%20(SG%26A)%20Expenses) Total SG&A expenses increased **5.7% YoY to RMB 222.0 million**, rising to **21.1% of revenue** from **19.1%**, reflecting decreased operational leverage due to lower overall revenue - Total SG&A expenses for the quarter increased by **5.7% to RMB 222.0 million**, while adjusted SG&A expenses rose **10.7% to RMB 221.3 million**[19](index=19&type=chunk) [Operating Income](index=6&type=section&id=Operating%20Income) Operating income decreased **14.5% YoY to RMB 228.4 million**, with the margin compressing to **21.7%**, primarily due to a **RMB 52.4 million operating loss** in the Overseas Schools segment Operating Income/(Loss) by Segment (Q1 FY2021) | Segment | Operating Income/(Loss) (RMB Million) | Operating Margin (%) | | :--- | :--- | :--- | | Domestic K-12 Schools | 283.6 | 38.2% | | Overseas Schools | (52.4) | (39.0)% | | Education Technology | 9.0 | 24.4% | | Complementary Education | 24.4 | 17.7% | | Unallocated Corporate Expenses | (36.2) | - | | **Total** | **228.4** | **21.7%** | - Adjusted operating income for the quarter was **RMB 236.3 million**, compared to **RMB 288.3 million** in the same period last year, with the adjusted operating margin decreasing to **22.5% from 26.3%**[21](index=21&type=chunk) [Net Income and Earnings Per Share (EPS)](index=6&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share%20(EPS)) Net income for the quarter was **RMB 190.9 million**, a **6.6% decrease YoY**, with basic and diluted EPS at **RMB 1.56**, and adjusted net income falling **11.6% to RMB 197.1 million** Net Income and EPS Summary (Q1 FY2021 vs Q1 FY2020) | Metric | Q1 FY2021 | Q1 FY2020 | YoY Change | | :--- | :--- | :--- | :--- | | Net Income (RMB Million) | 190.9 | 204.3 | (6.6)% | | Adjusted Net Income (RMB Million) | 197.1 | 223.0 | (11.6)% | | Basic & Diluted EPS (RMB) | 1.56 | 1.59 | (1.9)% | | Adjusted Basic & Diluted EPS (RMB) | 1.61 | 1.74 | (7.5)% | [Cash Flow and Financial Position](index=8&type=section&id=Cash%20Flow%20and%20Financial%20Position) As of November 30, 2020, the company maintained a strong liquidity position with **RMB 1,697.2 million** in cash and equivalents, while capital expenditure decreased **25.8% YoY to RMB 45.2 million** - As of November 30, 2020, the Company's cash, cash equivalents, and restricted cash totaled **RMB 1,697.2 million (US$258.1 million)**[27](index=27&type=chunk) - Capital expenditure for the first fiscal quarter was approximately **RMB 45.2 million**, a decrease of **25.8%** compared to the same period last year[27](index=27&type=chunk) [Fiscal Year 2021 Guidance](index=8&type=section&id=Fiscal%20Year%202021%20Guidance) [Revised FY2021 Outlook](index=8&type=section&id=Revised%20FY2021%20Outlook) The company revised its FY2021 guidance, projecting total revenue between **RMB 3.59 billion and RMB 3.69 billion**, representing **7% to 10% YoY growth**, with average student enrollment expected to increase **8% to 10%** Revised Guidance for Fiscal Year 2021 | Metric | Guidance Range | YoY Growth Projection | | :--- | :--- | :--- | | Revenue | RMB 3.59B - 3.69B | 7% to 10% | | Average Student Enrollment | 56,000 - 57,000 | 8% to 10% | [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of November 30, 2020, Bright Scholar's total assets were **RMB 10.16 billion**, total liabilities decreased to **RMB 6.90 billion**, and total equity increased to **RMB 3.26 billion** Key Balance Sheet Items (in RMB thousands) | Item | As of Nov 30, 2020 | As of Aug 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **10,163,640** | **10,823,309** | | Total Current Assets | 4,124,247 | 4,700,630 | | Total Non-Current Assets | 6,039,393 | 6,122,679 | | **Total Liabilities** | **6,900,173** | **7,698,928** | | Total Current Liabilities | 3,055,664 | 3,695,043 | | Total Non-Current Liabilities | 3,844,509 | 4,003,885 | | **Total Equity** | **3,263,467** | **3,124,381** | [Unaudited Condensed Consolidated Statements of Operations](index=16&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 FY2021, the company reported **RMB 1,051.5 million in revenue** and a gross profit of **RMB 442.8 million**, resulting in a net income of **RMB 190.9 million** for the quarter Statement of Operations Summary (in RMB thousands) | Item | Three Months Ended Nov 30, 2020 | Three Months Ended Nov 30, 2019 | | :--- | :--- | :--- | | Revenue | 1,051,546 | 1,097,953 | | Gross profit | 442,809 | 473,751 | | Operating income | 228,429 | 267,240 | | Net income | 190,868 | 204,284 | | Net income attributable to ordinary shareholders | 186,582 | 191,286 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=17&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 FY2021, net cash used in operating activities was **RMB 479.4 million**, with significant cash used in investing activities at **RMB 2.17 billion**, leading to a **RMB 2.73 billion decrease** in cash and restricted cash Cash Flow Summary (in RMB thousands) | Item | Three Months Ended Nov 30, 2020 | Three Months Ended Nov 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | (479,431) | (399,757) | | Net cash used in investing activities | (2,166,134) | (406,412) | | Net cash used in financing activities | (23,905) | (1,183) | | Net change in cash and restricted cash | (2,726,745) | (838,464) | | Cash and restricted cash at end of period | 1,697,192 | 2,426,550 | [Reconciliations of GAAP and Non-GAAP Results](index=18&type=section&id=Reconciliations%20of%20GAAP%20and%20Non-GAAP%20Results) This section details reconciliations from GAAP to non-GAAP financial measures, showing Adjusted EBITDA for Q1 FY2021 as **RMB 320.6 million** by adjusting GAAP net income for non-cash and non-operating items Reconciliation of Net Income to Adjusted EBITDA (in RMB thousands) | Item | Three Months Ended Nov 30, 2020 | Three Months Ended Nov 30, 2019 | | :--- | :--- | :--- | | Net income | 190,868 | 204,284 | | Add: Interest expense, net | 36,977 | 29,588 | | Add: Income tax expense | 40,280 | 58,015 | | Add: Depreciation and amortization | 51,870 | 50,580 | | Add: Share-based compensation expense | 641 | 10,032 | | **Adjusted EBITDA** | **320,636** | **352,499** | [Appendix](index=9&type=section&id=Appendix) [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures like adjusted EBITDA and net income to supplement GAAP results, providing a clearer assessment of operating performance by excluding non-cash and non-operating items - The company defines and uses non-GAAP measures like **adjusted EBITDA, adjusted net income, and adjusted operating income** to evaluate operating performance and formulate business plans[33](index=33&type=chunk)[36](index=36&type=chunk) - These non-GAAP measures are intended to help investors assess operating results without the impact of non-cash charges (e.g., depreciation, amortization, share-based compensation) and certain non-operating items[36](index=36&type=chunk) [About the Company & Safe Harbor Statement](index=10&type=section&id=About%20the%20Company%20%26%20Safe%20Harbor%20Statement) Bright Scholar is a global education service company operating **102 schools** as of November 30, 2020, with the report including a standard safe harbor statement regarding forward-looking statements - As of November 30, 2020, Bright Scholar operated a total of **102 schools**: **94** across twelve provinces in China and **8** overseas[38](index=38&type=chunk) - The Safe Harbor Statement warns that forward-looking statements in the announcement are based on current expectations and are subject to known and unknown risks that could cause actual results to differ materially[40](index=40&type=chunk)

PART I [KEY INFORMATION](index=8&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section presents selected financial data and details key risks associated with the company's business, corporate structure, operations in China, and publicly traded ADSs [Selected Financial Data](index=8&type=section&id=A.%20Selected%20Financial%20Data) The company experienced strong revenue growth from 2016 to 2020, reaching RMB 3.37 billion, alongside consistent asset expansion, despite volatile net income which decreased to RMB 164.2 million in 2020 Selected Financial Data | Fiscal Year Ended August 31, | 2018 (RMB) | 2019 (RMB) | 2020 (RMB) | 2020 (USD) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 1,718,871 | 2,563,005 | 3,366,503 | 491,647 | | **Gross Profit** | 628,276 | 976,991 | 1,221,717 | 178,421 | | **Operating Income** | 272,162 | 300,526 | 307,729 | 44,941 | | **Net Income** | 248,903 | 252,758 | 164,174 | 23,976 | | **Net Income Attributable to Ordinary Shareholders** | 246,969 | 241,099 | 161,005 | 23,513 | | **Basic EPS (RMB)** | 2.02 | 1.97 | 1.34 | 0.20 | | **Diluted EPS (RMB)** | 2.02 | 1.97 | 1.34 | 0.20 | Financial Position | As of August 31, | 2018 (RMB) | 2019 (RMB) | 2020 (RMB) | 2020 (USD) | | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | 4,666,481 | 7,787,637 | 10,823,309 | 1,580,643 | | **Total Liabilities** | 1,654,882 | 4,704,369 | 7,698,928 | 1,124,356 | | **Total Equity** | 3,011,599 | 3,083,268 | 3,124,381 | 456,287 | [Risk Factors](index=10&type=section&id=D.%20Risk%20Factors) The company faces significant risks across its business, corporate structure, operations in China, and its securities, including regulatory changes, VIE arrangement uncertainties, and potential delisting due to auditor inspection issues - The company's ability to operate for-profit schools providing compulsory education (grades 1-9) is **significantly limited** by the Amended Law on the Promotion of Private Education, which requires such schools to be non-profit, potentially leading to a **material impact on revenue and profitability** from a significant portion of its student base[31](index=31&type=chunk) - The business is heavily concentrated in Guangdong province, which generated **41.7% of total revenues** in fiscal 2020, with its flagship school, Guangdong Country Garden School, alone accounting for **13.8% of total revenues**, posing a significant geographical concentration risk[66](index=66&type=chunk) - The company's corporate structure relies on contractual arrangements (**VIE structure**) to control its schools in China due to foreign ownership restrictions, and this structure is subject to interpretation by PRC authorities, risking non-compliance and **severe penalties**[154](index=154&type=chunk)[156](index=156&type=chunk)[158](index=158&type=chunk) - The company's independent auditor is located in China, a jurisdiction where the **PCAOB is unable to conduct inspections**, which could lead to the **delisting** of the company's ADSs from U.S. exchanges under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB cannot inspect the auditor for three consecutive years[232](index=232&type=chunk)[236](index=236&type=chunk) [INFORMATION ON THE COMPANY](index=93&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, business operations, and organizational structure, highlighting its global K-12 education services, synergistic relationship with Country Garden, and reliance on a VIE structure in China [History and Development of the Company](index=93&type=section&id=A.%20History%20and%20development%20of%20the%20company) Bright Scholar, founded in 1994, operates in China via a VIE structure due to foreign ownership restrictions, completed its NYSE IPO in 2017, and issued US$300 million in senior notes in 2019 - The company operates its domestic schools in China through a series of contractual arrangements (**VIE structure**) with BGY Education Investment and its shareholders due to PRC laws prohibiting foreign ownership in compulsory education and restricting it in other areas[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) - The company completed its **IPO on the NYSE on May 18, 2017**, and a follow-on offering on March 2, 2018, raising net proceeds of approximately **US$174.7 million and US$181.4 million**, respectively[303](index=303&type=chunk) - In July 2019, the company issued **US$300.0 million in senior notes** with a 7.45% interest rate, maturing on July 31, 2022, which are listed on the Stock Exchange of Hong Kong[305](index=305&type=chunk) [Business Overview](index=99&type=section&id=B.%20Business%20Overview) Bright Scholar is a leading global K-12 education service provider, operating domestic and overseas schools with strong academic outcomes, leveraging a synergistic relationship with Country Garden for expansion - The company operates **94 schools in China** and **8 overseas schools** in the UK and US as of the report date, with an average of **51,825 students** enrolled during the 2020 school year[308](index=308&type=chunk) - The company has a strong academic track record: **93.6%** of its 2020 graduating class from key international programs were admitted to global top 50 universities[310](index=310&type=chunk) - A key business strategy involves close collaboration with **Country Garden**, a related party and leading residential property developer in China, which provides a scalable model for launching new schools with **lower upfront capital expenditures**[312](index=312&type=chunk) Average Student Enrollment by School Type | School Type | Avg. Enrollment (2018) | Avg. Enrollment (2019) | Avg. Enrollment (2020) | | :--- | :--- | :--- | :--- | | **International Schools** | 7,366 | 9,350 | 10,584 | | **Bilingual Schools** | 15,620 | 18,132 | 20,189 | | **Kindergartens** | 13,693 | 16,742 | 17,840 | | **Total Domestic K-12** | **36,679** | **44,224** | **48,613** | [Organizational Structure](index=152&type=section&id=C.%20Organizational%20Structure) The company, a Cayman Islands holding entity, operates its PRC business through a Variable Interest Entity (VIE) structure, using contractual arrangements to control affiliated entities and consolidate financial results - Due to PRC restrictions on foreign ownership in education, the company uses a **VIE structure** to control its domestic schools, achieved through contractual arrangements rather than direct ownership[477](index=477&type=chunk)[478](index=478&type=chunk) - Key contractual agreements include a **Call Option Agreement**, **Powers of Attorney**, an **Exclusive Management Services and Business Cooperation Agreement**, and an **Equity Pledge Agreement**, which collectively give the company **effective control** over the VIEs[480](index=480&type=chunk)[481](index=481&type=chunk)[482](index=482&type=chunk)[483](index=483&type=chunk) - The revenue from affiliated entities (VIEs) accounted for **63.3% of the company's total revenues** in the 2020 fiscal year, highlighting the **critical importance** of the VIE structure to the company's operations[303](index=303&type=chunk) [OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=157&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial performance, highlighting 31.3% revenue growth in FY2020 to RMB 3.37 billion, a decline in net income to RMB 164.2 million due to higher costs and impairments, and strong liquidity [Operating Results](index=158&type=section&id=A.%20Operating%20Results) In FY2020, revenue increased 31.3% to RMB 3,366.5 million, driven by acquisitions and enrollment growth, but net income decreased to RMB 164.2 million due to higher interest expense and impairment losses Key Financial Metrics (RMB million) | Metric | FY 2019 (RMB million) | FY 2020 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | 2,563.0 | 3,366.5 | +31.3% | | **Gross Profit** | 977.0 | 1,221.7 | +25.0% | | **Operating Income** | 300.5 | 307.7 | +2.4% | | **Net Income** | 252.8 | 164.2 | -35.0% | | **Adjusted Net Income** | 322.6 | 267.7 | -17.0% | - The increase in revenue for FY2020 was primarily driven by a **359.9% increase** in revenue from overseas schools (due to acquisitions) and growth in student numbers at domestic international and bilingual schools[573](index=573&type=chunk)[574](index=574&type=chunk)[577](index=577&type=chunk) - The company recorded significant one-off and non-cash charges in FY2020, including an impairment loss on goodwill of **RMB 68.7 million** and an impairment loss on operating lease right-of-use assets of **RMB 12.8 million**[562](index=562&type=chunk) - Net interest expense was **RMB 159.4 million** in FY2020, a sharp reversal from a net interest income of **RMB 24.3 million** in FY2019, primarily due to interest on the senior notes issued in July 2019[589](index=589&type=chunk) [Liquidity and Capital Resources](index=192&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily funded by operations and financing, with cash and equivalents reaching RMB 4.42 billion in FY2020, despite a decrease in net cash from operating activities Cash Flow Summary (RMB thousands) | Cash Flow Summary (RMB thousands) | FY 2018 | FY 2019 | FY 2020 | | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | 554,216 | 864,988 | 491,227 | | **Net cash (used in)/from investing activities** | (472,460) | (2,256,009) | 72,567 | | **Net cash from financing activities** | 1,092,604 | 1,479,533 | 675,703 | | **Cash and equivalents at end of year** | 3,164,081 | 3,265,014 | 4,423,937 | - As a holding company, its ability to pay dividends and meet obligations depends on dividends from its PRC subsidiaries, which are subject to **PRC regulations** on profit distribution and statutory reserves[624](index=624&type=chunk) - Capital expenditures were **RMB 149.8 million (US$21.9 million)** in fiscal year 2020, mainly for construction, maintenance, and renovation of school facilities[623](index=623&type=chunk) [DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=202&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation, and employee base, noting the significant voting power held by founders through a dual-class share structure and the growth in total employees to 11,499 in FY2020 [Compensation](index=207&type=section&id=B.%20Compensation) In FY2020, total cash compensation for directors and executive officers was RMB 20.8 million, with a negative share-based payment expense of RMB 10.6 million due to cancelled options - Aggregate cash compensation for directors and executive officers in fiscal year 2020 was approximately **RMB 20.8 million (US$3.0 million)**[656](index=656&type=chunk) - The company recorded a **negative share-based payment expense of RMB 10.6 million** in FY2020, mainly from reversing expenses for cancelled options where performance conditions were not met[658](index=658&type=chunk) [Employees](index=213&type=section&id=D.%20Employees) The company's employee base grew steadily to 11,499 in FY2020, with teachers and instructors comprising the largest category at 6,358 Employee Count by Category | Employee Category | FY 2018 | FY 2019 | FY 2020 | | :--- | :--- | :--- | :--- | | **Teachers and instructors** | 4,297 | 5,602 | 6,358 | | **Managerial staff** | 469 | 660 | 1,062 | | **Educational and administrative staff** | 1,012 | 1,629 | 1,403 | | **Supporting staff** | 2,113 | 2,475 | 2,676 | | **Total** | **7,891** | **10,366** | **11,499** | [Share Ownership](index=213&type=section&id=E.%20Share%20Ownership) As of December 15, 2020, Ms. Huiyan Yang holds 92.51% of the aggregate voting power due to a dual-class share structure, resulting in highly concentrated share ownership - As of December 15, 2020, Ms. Huiyan Yang beneficially owns **77.93%** of the aggregate ordinary shares, which translates to **92.51%** of the aggregate voting power due to the dual-class share structure[682](index=682&type=chunk)[686](index=686&type=chunk) - The company has a **dual-class share structure**, where each Class A ordinary share has one vote, while each Class B ordinary share has **20 votes** and is convertible into one Class A share[682](index=682&type=chunk) [MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=218&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details major shareholders and extensive related party transactions, primarily with Country Garden and entities controlled by Ms. Huiyan Yang, highlighting the synergistic and dependent relationship - The company has **school operation agreements** with Country Garden, where Country Garden provides school premises and facilities, and Bright Scholar is responsible for school operation and management[690](index=690&type=chunk) - Bright Scholar **licenses the "Country Garden" trademark** from Country Garden free of charge under agreements expiring in 2028 or 2030[691](index=691&type=chunk) - In fiscal year 2020, the company purchased approximately **RMB 11.2 million** in materials and services from related parties controlled by Ms. Huiyan Yang[694](index=694&type=chunk) [FINANCIAL INFORMATION](index=223&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section covers the company's financial statements, legal proceedings, and dividend policy, noting cash dividends declared in 2019 and 2020, but no fixed future dividend plan - The company declared a cash dividend of **US$0.10 per ordinary share** on September 18, 2019, and **US$0.12 per ordinary share** on July 23, 2020[707](index=707&type=chunk) - The company currently intends to retain most of its available funds and future earnings to operate and expand its business and **does not have a fixed plan for future dividends**[707](index=707&type=chunk) [CONTROLS AND PROCEDURES](index=243&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of August 31, 2020, despite identifying a significant deficiency in internal control over financial reporting related to acquired overseas businesses, for which remediation steps are underway - Management concluded that disclosure controls and procedures were **effective** as of August 31, 2020[768](index=768&type=chunk) - A **significant deficiency** in internal control over financial reporting was identified in fiscal year 2020, related to a lack of segregation of duties and insufficient review over financial data in certain acquired overseas businesses[774](index=774&type=chunk) - The company is taking **remediation steps**, including recruiting more qualified financial professionals, providing training, and establishing a UK-based shared service center to unify processes for overseas schools[775](index=775&type=chunk)[776](index=776&type=chunk) [PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](index=248&type=section&id=ITEM%2016E.%20PURCHASES%20OF%20EQUITY%20SECURITIES%20BY%20THE%20ISSUER%20AND%20AFFILIATED%20PURCHASERS) The company actively repurchased its ADSs through two programs, with the 2018 program repurchasing US$77 million and the 2019 program repurchasing US$9.4 million by its expiration in November 2020 - The company had a **US$100 million** share repurchase program that expired in April 2019, under which it repurchased approximately **US$77 million** of its ADSs[785](index=785&type=chunk) - A subsequent **US$30 million** share repurchase program was initiated in September 2019; during the 2020 fiscal year, the company repurchased **1.2 million ADSs** for approximately **US$9.4 million** under this program[786](index=786&type=chunk)[787](index=787&type=chunk) [FINANCIAL STATEMENTS](index=251&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's audited consolidated financial statements for fiscal years 2018-2020, prepared under U.S. GAAP, including balance sheets, statements of operations, and cash flows, along with the independent auditor's report Consolidated Balance Sheet (RMB thousands) | Consolidated Balance Sheet (As of Aug 31, 2020) | Amount (RMB thousands) | | :--- | :--- | | **Total Current Assets** | 4,700,630 | | **Total Assets** | 10,823,309 | | **Total Current Liabilities** | 3,695,043 | | **Total Liabilities** | 7,698,928 | | **Total Equity** | 3,124,381 | Consolidated Statement of Operations (RMB thousands) | Consolidated Statement of Operations (FY 2020) | Amount (RMB thousands) | | :--- | :--- | | **Revenue** | 3,366,503 | | **Gross Profit** | 1,221,717 | | **Operating Income** | 307,729 | | **Net Income** | 164,174 |

Financial Performance - For the first nine months of fiscal year 2020 (F9M'20), Bright Scholar's revenue increased by 46.6% year-over-year to RMB 2714.4 million, compared to RMB 1851.4 million in F9M'19[46] - Adjusted EBITDA for F9M'20 grew by 37.3% year-over-year to RMB 669.4 million, compared to RMB 487.6 million in F9M'19[46] - In the third fiscal quarter of 2020 (F3Q'20), revenue increased by 6.7% year-over-year to RMB 739.4 million, compared to RMB 692.8 million in F3Q'19[46] - Adjusted net income decreased by 7.3% to RMB 333.6 million in F9M'20 from RMB 359.8 million in F9M'19[46] - Adjusted net income decreased by 70.9% to RMB 46.6 million in F3Q'20 from RMB 160.2 million in F3Q'19[46] Business Segments - Revenue from overseas schools increased significantly by 2,204.4% to RMB 766.8 million in F9M'20 from RMB 33.3 million in F9M'19[51] - Revenue from domestic K-12 schools increased by 3.7% to RMB 1,552.1 million in F9M'20 from RMB 1,496.9 million in F9M'19[51] - Revenue from complementary education increased by 23.1% to RMB 395.5 million in F9M'20 from RMB 321.2 million in F9M'19[51] Strategic Initiatives and Outlook - The company reaffirms its revised outlook for fiscal year 2020, expecting revenue between RMB 3.37 billion and RMB 3.47 billion, representing a year-over-year increase of 31% to 35%[91] - The company expects enrollment between 51,800 and 52,800 students, representing a year-over-year increase of 11% to 13%[91] - The company plans to open 17 kindergartens and 1 international school in fiscal year 2021[92]

Bright Scholar Education Holdings Limited (NYSE:BEDU) Q4 2020 Earnings Conference Call November 12, 2020 8:00 AM ET Company Participants Ruby Yim – Investor Relations Counsel Jerry He – Executive Vice Chairman Zi Chen – Co-Chief Executive Officer Dora Li – Chief Financial Officer Conference Call Participants Timothy Zhao – Goldman Sachs Leonard Law – Lucror Analytics Operator Good morning, and thank you for standing by for Bright Scholar's 2020 Fourth Fiscal Quarter and Fiscal Year 2020 Earnings Conference ...

Bright Scholar Education Holdings Ltd-ADR (NYSE:BEDU) Q3 2020 Results Conference Call July 23, 2020 8:00 AM ET Company Participants Ruby Yim - Investor Relations Junli He - Executive Vice Chairman Wanmei Li - Co-Chief Executive Officer Zi Chen - Co-Chief Executive Officer Dora Li - Chief Financial Officer Conference Call Participants Sheng Zhong - Morgan Stanley Christine Cho - Goldman Sachs Operator Good morning, and thank you for standing by for Bright Scholar's 2020 Third Fiscal Quarter Earnings Conferen ...

Bright Scholar Education Holdings Limited (NYSE:BEDU) Q2FY2020 Earnings Conference Call April 29, 2020 8:00 AM ET Company Participants Ruby Yim – Investor Relations Counsel Derek Feng – Chief Executive Officer Dora Li – Chief Financial Officer Conference Call Participants Christine Cho – Goldman Sachs Elsie Sheng – Morgan Stanley Operator Good morning, and thank you for standing by for Bright Scholar's FY 2020 Second Fiscal Quarter Earnings Conference Call. [Operator Instructions] Today's conference is bei ...

Bright Scholar Education Holdings Limited (NYSE:BEDU) Q1 2020 Results Earnings Conference Call January 17, 2020 8:00 AM ET Company Participants Ruby Yim - Investor Relations Council Jerry He - Executive Vice Chairman Derek Feng - Chief Executive Officer Dora Li - Chief Financial Officer Conference Call Participants Elsie Sheng - Morgan Stanley Christine Cho - Goldman Sachs Operator Good morning. And thank you for standing by for Bright Scholar’s 2020 First Fiscal Quarter Earnings Conference Call. At this ti ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES ACT OF 1934 OR x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 1 ...