PART I [ITEM 3. KEY INFORMATION](index=7&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section presents key financial data and outlines significant risks related to business operations, the VIE structure, and market factors [Selected Financial Data](index=7&type=section&id=A.%20Selected%20Financial%20Data) Highlights consistent revenue and gross profit growth from 2015 to 2019, with significant expansion in total assets Selected Consolidated Statements of Operations Data (2017-2019) | Financial Metric | 2017 (RMB) | 2018 (RMB) | 2019 (RMB) | 2019 (US$) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | 969,275 | 1,271,888 | 1,529,447 | 219,691 | | **Gross Profit** | 517,055 | 695,358 | 834,754 | 119,905 | | **Operating (Loss)/Income** | (628) | 207,612 | 222,789 | 32,002 | | **Net (Loss)/Income** | (53,600) | 142,436 | 144,560 | 20,765 | | **Net (Loss)/Income Attributable to RISE** | (47,974) | 142,958 | 148,100 | 21,273 | Selected Consolidated Balance Sheet Data (as of Dec 31) | Financial Metric | 2018 (RMB) | 2019 (RMB) | 2019 (US$) | | :--- | :--- | :--- | :--- | | **Total Assets** | 2,280,774 | 2,801,955 | 402,476 | | **Total Liabilities** | 1,839,940 | 2,177,654 | 312,800 | | **Total Equity** | 440,834 | 624,301 | 89,676 | [Risk Factors](index=9&type=section&id=D.%20Risk%20Factors) Identifies significant risks including competition, brand dependency, VIE structure uncertainties, and the adverse impact of COVID-19 - The company's success is critically dependent on its ability to attract new students and retain existing ones, which is influenced by product quality, teaching methodologies, and marketing effectiveness[23](index=23&type=chunk) - The junior English Language Teaching (ELT) market in China is highly fragmented and competitive, and the company faces pressure from competitors who may have greater financial resources[25](index=25&type=chunk) - The company operates through a Variable Interest Entity (VIE) structure which carries **substantial uncertainties** regarding its interpretation and legality under current and future PRC laws, potentially leading to severe penalties[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - The COVID-19 outbreak has **materially and adversely affected the business**, leading to temporary closure of learning centers, and the company expects to report a **net loss for the year ending December 31, 2020**[135](index=135&type=chunk)[139](index=139&type=chunk) - As of December 31, 2019, Bain Capital beneficially owns approximately **59.8% of the company's voting power**, giving it substantial control over corporate actions[161](index=161&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=36&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) Details the company's history, business model, franchise network, critical VIE structure, and property portfolio [History and Development of the Company](index=36&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Outlines the company's growth since 2007, its 2017 IPO, and the expansion of its learning center network - As of December 31, 2019, the company's network consisted of **472 learning centers**, including **89 self-owned** and **383 franchised centers**, across China, Hong Kong, and Singapore[178](index=178&type=chunk) - The company completed its **Initial Public Offering (IPO)** on the NASDAQ Global Market on October 24, 2017, listing its ADSs under the symbol 'REDU'[183](index=183&type=chunk) [Business Overview](index=37&type=section&id=B.%20Business%20Overview) Explains the 'subject-based learning' approach, course offerings, franchise model, and key intellectual property licenses - The company utilizes a **'subject-based learning' philosophy**, teaching English through subjects like language arts, math, and science to create an immersive learning environment[185](index=185&type=chunk) Student Enrollment and In-Class Numbers (Regular Courses at Self-Owned Centers) | Metric | As of/Year Ended Dec 31, 2018 | As of/Year Ended Dec 31, 2019 | | :--- | :--- | :--- | | New Students Enrolled | 25,862 | 29,049 | | Students in Class | 49,365 | 54,383 | Learning Center Network Growth | Center Type | As of Dec 31, 2017 | As of Dec 31, 2018 | As of Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Self-owned | 64 | 76 | 89 | | Franchised | 206 | 304 | 383 | | **Total** | **270** | **380** | **472** | - The company holds an **exclusive, royalty-free, and permanent license** from Houghton Mifflin Harcourt (HMH) to use certain courseware for after-school tutoring in China[211](index=211&type=chunk)[267](index=267&type=chunk) - The PRC government has issued **stringent regulations** for after-school tutoring, setting standards for facilities, teacher qualifications, and fee collection, such as no more than **three months of tuition collected at a time**[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) [Organizational Structure](index=62&type=section&id=C.%20Organizational%20Structure) Details the Variable Interest Entity (VIE) structure used to control its PRC operations due to foreign ownership restrictions - The company uses a VIE structure because PRC law requires foreign investors in the education sector to be **experienced educational institutions**, a criterion its offshore holding entities do not meet[341](index=341&type=chunk) - Control over the VIE is established through key contracts including a **Proxy Agreement**, a **Call Option Agreement**, and an **Equity Pledge Agreement**[344](index=344&type=chunk)[345](index=345&type=chunk)[357](index=357&type=chunk) - In 2017, 2018, and 2019, the consolidated VIE and its subsidiaries contributed **94%**, **92%**, and **94%** of the company's total revenues, respectively, highlighting the structure's critical importance[342](index=342&type=chunk) [Property, Plants and Equipment](index=66&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) Describes the company's leased properties for its headquarters and self-owned learning centers - As of December 31, 2019, the company leased a total of approximately **106,016 square meters** for its self-owned learning centers[361](index=361&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=66&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) Provides management's analysis of financial performance, liquidity, capital resources, and the impact of COVID-19 on future trends [Operating Results](index=66&type=section&id=A.%20Operating%20Results) Analyzes the 20.3% revenue growth in 2019, margin pressures from rising operating expenses, and non-GAAP financial measures Year-over-Year Performance Comparison (2018 vs. 2019) | Metric (in thousands) | 2018 (RMB) | 2019 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | 1,271,888 | 1,529,447 | +20.3% | | Educational Programs | 1,097,619 | 1,324,654 | +20.7% | | Franchise Revenues | 125,341 | 156,509 | +24.9% | | **Gross Profit** | 695,358 | 834,754 | +20.0% | | **Operating Income** | 207,612 | 222,789 | +7.3% | | **Net Income** | 142,436 | 144,560 | +1.5% | - The increase in 2019 revenue was primarily due to a rise in students at self-owned learning centers and higher course prices, coupled with growth from an expanding franchise network, which grew from **304 to 383 centers**[391](index=391&type=chunk) - **Operating expenses grew faster than revenue in 2019**, driven by higher marketing staff headcount, incentives, new share-based compensation, and professional fees for acquisitions[394](index=394&type=chunk)[395](index=395&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP) | Metric (in thousands) | 2017 (RMB) | 2018 (RMB) | 2019 (RMB) | | :--- | :--- | :--- | :--- | | **Net (Loss)/Income** | (53,600) | 142,436 | 144,560 | | **EBITDA** | 56,064 | 279,852 | 301,419 | | **Adjusted EBITDA** | 242,510 | 300,204 | 349,308 | [Liquidity and Capital Resources](index=75&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Details the company's cash position, a significant decrease in operating cash flow, and outstanding debt obligations Summary of Cash Flows (in thousands RMB) | Cash Flow Activity | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 350,100 | 380,034 | (39,854) | | Net cash used in investing activities | (53,067) | (100,875) | (114,716) | | Net cash from/(used in) financing activities | 137,402 | (57,306) | (140,732) | - The significant decrease in operating cash flow in 2019 was primarily due to a **RMB 331.7 million decrease in deferred revenue** and customer advances attributed to a change in the tuition fee collection schedule[423](index=423&type=chunk) - The company has a long-term loan facility with scheduled principal repayments of **US$19.25 million**, **US$24.75 million**, and **US$30.25 million** due in September 2020, 2021, and 2022, respectively[432](index=432&type=chunk)[811](index=811&type=chunk) [Trend Information](index=86&type=section&id=D.%20Trend%20Information) Focuses on the material adverse impact of the COVID-19 outbreak and the company's strategic shift towards digitalization - The COVID-19 outbreak caused the **temporary closure of all learning centers** and offices since late January 2020, **materially and adversely affecting** results of operations and liquidity[487](index=487&type=chunk) - In response to the closures, the company accelerated its digitalization strategy by upgrading its **Rise+ platform** to support online small group classes, which began generating revenue in March 2020[487](index=487&type=chunk) - Due to the adverse effects of COVID-19, the company currently expects to report a **net loss for the fiscal year ending December 31, 2020**[490](index=490&type=chunk)[861](index=861&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=87&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) Outlines the company's leadership, compensation structure, employee base, and controlling shareholder ownership [Directors and Senior Management](index=87&type=section&id=A.%20Directors%20and%20Senior%20Management) Lists the company's board of directors and executive officers, highlighting key figures from Bain Capital Key Directors and Executive Officers | Name | Position/Title | | :--- | :--- | | Lihong Wang | Chairwoman, Chief Executive Officer, Director | | Jonathan Jia Zhu | Director, Chairman of the corporate governance and nominating committees | | Yiding Sun | Vice Chairman, Director | | Zhongjue Chen | Director | | Jiandong Lu | Director, Chief Financial Officer, Chief Operating Officer | [Compensation](index=89&type=section&id=B.%20Compensation) Details executive compensation for 2019 and the structure of the company's two share incentive plans - In 2019, the total compensation paid to all directors and executive officers was approximately **RMB 6.4 million (US$0.9 million)**[511](index=511&type=chunk) - The company has two active equity incentive plans: the **2016 ESOP Plan** (7,000,000 shares authorized) and the **2017 ESOP Plan** (5,000,000 shares authorized)[515](index=515&type=chunk)[525](index=525&type=chunk) [Employees](index=95&type=section&id=D.%20Employees) Shows steady growth in the company's workforce, with teachers comprising the largest employee group Employee Count by Function | Function | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Teachers | 1,543 | 1,911 | 2,315 | | Sales and marketing | 565 | 668 | 723 | | Administration | 646 | 933 | 976 | | **Total** | **2,754** | **3,512** | **4,014** | [Share Ownership](index=95&type=section&id=E.%20Share%20Ownership) Confirms Bain Capital's controlling stake with 62.8% of the company's total voting power - **Bain Capital Rise Education IV Cayman Limited is the controlling shareholder**, holding 70,800,808 ordinary shares, which represents **62.8% of the total voting power** as of March 31, 2020[549](index=549&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=96&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) Details transactions with related parties, including a consulting agreement with a Bain Capital affiliate and entrustment loans - The company engaged in significant related party transactions, including a consulting agreement with a Bain Capital affiliate that terminated upon the IPO after a final payment of **RMB 33.9 million**[553](index=553&type=chunk) - The company granted entrustment loans to an affiliate of its principal shareholder, amounting to **RMB 150.0 million in 2018** and **RMB 100.0 million in 2019**, all of which have been fully repaid[554](index=554&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=97&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) Contains the company's consolidated financial statements and discusses legal proceedings and dividend policy - The company does not currently plan to pay any cash dividends, intending to **retain earnings to fund business operations and growth**[559](index=559&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=99&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) Covers supplementary corporate information, including articles of association, exchange controls, and detailed tax considerations - The company is **not subject to income or capital gains tax** in its jurisdiction of incorporation, the Cayman Islands[566](index=566&type=chunk) - In the PRC, the company's entities are subject to a statutory Enterprise Income Tax (EIT) rate of 25%, though its WFOE qualified for a **preferential rate of 15%** as a "High and New Technology Enterprise" (HNTE) in 2019[481](index=481&type=chunk)[814](index=814&type=chunk) - For U.S. investors, there is a risk that the company could be classified as a **Passive Foreign Investment Company (PFIC)**, which could result in adverse U.S. federal income tax consequences[580](index=580&type=chunk)[583](index=583&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=105&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are foreign exchange risk, credit risk, and interest rate risk - The company has significant foreign exchange risk related to its U.S. Dollar-denominated debt; a **10% depreciation of the RMB against the USD** would result in a decrease of **US$14.0 million** in the value of its RMB-denominated cash[598](index=598&type=chunk)[602](index=602&type=chunk) - The company is exposed to interest rate risk on its long-term loan, where a hypothetical **1% change in annual interest rates** would impact interest expense by approximately **RMB 5.2 million (US$0.7 million)** per year[604](index=604&type=chunk) [ITEM 15. CONTROLS AND PROCEDURES](index=109&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and internal control over financial reporting were effective as of year-end 2019 - Management concluded that as of December 31, 2019, the company's **disclosure controls and procedures were effective**[617](index=617&type=chunk) - Based on the COSO framework, management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2019[622](index=622&type=chunk) [ITEM 16. CORPORATE GOVERNANCE AND OTHER ITEMS](index=110&type=section&id=ITEM%2016.%20CORPORATE%20GOVERNANCE%20AND%20OTHER%20ITEMS) Covers corporate governance matters, including accountant fees and the completion of a share repurchase program Principal Accountant Fees (in thousands USD) | Fee Category | 2018 | 2019 | | :--- | :--- | :--- | | Audit fees | - | 1,106 | | Audit-related fees | - | - | | Tax fees | 4 | 15 | | All other fees | 64 | 265 | - The company completed its share repurchase program in Q3 2019, having repurchased a total of **1,158,741 ADSs** for an aggregate consideration of **US$10.0 million**[630](index=630&type=chunk) PART III [ITEM 18. FINANCIAL STATEMENTS](index=113&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) Presents the audited consolidated financial statements for 2017-2019 prepared in accordance with U.S. GAAP [Notes to the Consolidated Financial Statements](index=128&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, business combinations, and the subsequent material impact of COVID-19 - The company adopted **ASC 606** (Revenue from Contracts with Customers) on January 1, 2018, resulting in a **RMB 44.1 million adjustment** to opening accumulated deficit[441](index=441&type=chunk)[734](index=734&type=chunk) - The company adopted **ASC 842** (Leases) on January 1, 2019, recognizing **Right-of-Use (ROU) assets of RMB 601.6 million** and **total lease liabilities of RMB 610.5 million** upon adoption[476](index=476&type=chunk)[750](index=750&type=chunk) - On July 1, 2019, the Group acquired a **51% equity interest** in 7 learning centers in Shijiazhuang for **RMB 44.1 million**, resulting in the recognition of **RMB 150.7 million in goodwill**[788](index=788&type=chunk)[790](index=790&type=chunk) - Subsequent to December 31, 2019, the **COVID-19 outbreak** led to the temporary closure of all offline learning centers, which is expected to have a **materially adverse impact** on 2020 results and lead to a **net loss** for the year[860](index=860&type=chunk)[861](index=861&type=chunk)

Rise Education Cayman Ltd (REDU) Q4 2019 Earnings Conference Call March 12, 2020 8:00 PM ET Company Participants Mei Li - Senior IR Director Lihong Wang - CEO & Chairwoman Jiandong Lu - CFO, COO & Director Conference Call Participants Sheng Zhong - Morgan Stanley Alex Xie - Crédit Suisse Alex Liu - China Renaissance Securities Operator Ladies and gentlemen, thank you for standing by, and welcome to the RISE Education Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions]. Please ...

Company Overview - Rise Education is a leading national provider of premium, after-school English language training for children aged 3-18[8] - The company strategically focuses on the fastest-growing age group (3-6 year olds)[23] - As of September 30, 2019, Rise had a total of 451 learning centers, including 87 self-owned learning centers and 364 franchised learning centers[58] Market and Business Highlights - China's Junior ELT market is experiencing rapid growth, driven by rising wealth, the two-child policy, and the increasing importance of English[18] - The penetration rate of Junior ELT in China is low at 35.2% compared to Japan (60.5%) and Korea (20.4%)[18] - Rise's teaching philosophy focuses on both English language and subject matter knowledge[23] - The company develops its curricula with technology in mind, utilizing both HMH-based and self-developed courseware[27, 28] - Rise boasts a strong brand with high student retention (70%)[63] and a significant portion of new enrollments through word-of-mouth (~30%)[63] Financial Performance - Rise has experienced rapid top-line growth, with revenues increasing from RMB 406.7 million in 2014 to RMB 1,271.9 million[72] - The company has highly visible future revenues, with deferred revenue and customer advances reaching RMB 831.6 million as of September 30, 2019[73] - A learning center can achieve adjusted EBITDA margin like 45 – 50%[52] Growth Strategies - The company plans to open new self-owned centers in existing and new cities and increase efforts in acquiring franchised centers[80] - Rise aims to increase marketing expenses to further increase penetration rate in the junior ELT market[80]

Rise Education Cayman Ltd (REDU) Q3 2019 Earnings Conference Call November 14, 2019 8:00 PM ET Company Participants Mei Li - Senior IR Director Sun Yiding - CEO & Director Lu Jiandong - CFO, COO & Director Conference Call Participants Alex Xie - Crédit Suisse Felix Liu - UBS Investment Bank Alex Liu - China Renaissance Securities Chongguang Feng - CITIC Securities Operator Ladies and gentlemen, thank you for standing by, and welcome to the RISE Education Third Quarter 2019 Earnings Call. [Operator Instruct ...

RISE Education Cayman Ltd (REDU) Q2 2019 Earnings Conference Call August 15, 2019 9:00 PM ET Company Participants Mei Li - Investor Relations Sun Yiding - CEO Lu Jiandong - COO and CFO Conference Call Participants Alex Xie - Crédit Suisse Felix Liu - UBS Alex Liu - China Renaissance Crystal Li - China Merchant Securities Sheng Zhong - Morgan Stanley Operator Ladies and gentlemen, thank you for standing by, and welcome to the RISE Education Second Quarter 2019 Earnings Call. [Operator Instructions] I must ad ...

RISE Education Cayman Ltd. (REDU) Q1 2019 Results Conference Call May 16, 2019 9:00 PM ET Company Participants Mei Li - Investor Relations Sun Yiding - CEO Jiandong Lu - CFO and COO Conference Call Participants Melissa Chen - China Renaissance Felix Liu - UBS Sheng Zhong - Morgan Stanley Operator Ladies and gentlemen thank you for standing by and welcome to the RISE Education's First Quarter 2019 Earnings Call. At this time all participants are in a listen-only mode. There will be a presentation followed by ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR ☐ SHELL COMPANY REPORT PURSUANT TO S ...