School Operations and Enrollment - As of June 30, 2024, China East Education operated 234 schools and centers with an average of 144,793 students enrolled and customers registered for the six months ended[3] - The culinary arts segment, under the New East and Cuisine Academy brands, had 93 schools with an average of 57,013 students enrolled[7] - The auto services segment, branded as Wontone, operated 41 schools and had an average of 40,143 students enrolled[7] - The information technology segment, under Xinhua Internet and Wisezone brands, included 57 schools with an average of 39,590 students enrolled[7] - The fashion and beauty segment, branded as On-mind, had 7 schools with an average of 3,409 students enrolled[7] - The western cuisine and pastry segment, branded as Omick, operated 36 schools with an average of 4,638 students enrolled[7] - The number of schools in operation reached 245 as of December 31, 2023, including 76 schools under New East Culinary Education and 46 schools under Omick Education of Western Cuisine and Pastry[8] - As of June 30, 2024, the company operated 234 schools and centers across almost all provinces in mainland China and Hong Kong[15] - The company operates under seven school brands, including New East Culinary Education and Xinhua Internet Technology Education[15] Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 1,983 million, compared to RMB 1,953 million for the same period in 2023, representing a growth of approximately 1.5%[10] - Net profit for the period increased to RMB 272 million for the six months ended June 30, 2024, up from RMB 204 million in the same period of 2023, reflecting a growth of approximately 33.3%[10] - Adjusted net profit for the six months ended June 30, 2024, was RMB 278 million, compared to RMB 176 million in the same period of 2023, indicating a growth of approximately 57.9%[10] - Adjusted EBITDA for the six months ended June 30, 2024, was RMB 715 million, an increase from RMB 633 million in the same period of 2023, representing a growth of approximately 13%[10] - Total assets amounted to 9,259 million as of the reporting period[11] - The net assets as of June 30, 2024, were RMB 5,496 million, a slight decrease from RMB 5,608 million as of December 31, 2023[9] Enrollment Trends - For the six months ended June 30, 2024, the total new student enrollments in the Culinary Arts segment decreased by 11.2% to 34,682 from 39,068 in the same period of 2023[20] - In the Western Cuisine and Pastry segment, new student enrollments fell by 12.9% to 7,549 compared to 8,666 in the prior year[20] - The Information Technology and Internet Technology segment experienced a decrease of 11.1% in total new student enrollments, dropping from 14,835 to 13,192[22] - The total number of new students enrollment for the group decreased by 7.7% to 78,009 in the six months ended June 30, 2024, compared to 84,552 in 2023[24] - The average number of long-term students enrolled as of June 30, 2024, increased by 3.8% to 37,006 from 35,653 in 2023[28] - The average number of long-term students enrolled in the "On-mind" segment surged by 189.9% to 2,574 from 888 in 2023[28] Cost and Profitability - Gross profit for the six months ended 30 June 2024 was RMB 1,051 million, compared to RMB 997 million for the corresponding period in 2023, with a gross profit margin of 53.0% compared to 51.1% in 2023[47] - Teaching staff salaries and benefits accounted for RMB 377.9 million, representing 40.5% of total costs for the six months ended 30 June 2024, up from 37.9% in 2023[46] - Selling expenses decreased from RMB 513 million for the six months ended 30 June 2023 to RMB 464 million for the six months ended 30 June 2024, primarily due to tighter control on advertising costs[53] - The cost of revenue decreased from approximately RMB 956 million for the six months ended 30 June 2023 to approximately RMB 932 million for the six months ended 30 June 2024, representing a decrease of approximately 2.5%[43] Strategic Initiatives - The company established Anhui Xinhua Education to consolidate all schools under a single entity, increasing operational efficiency[8] - The company expanded its business to Hong Kong, increasing its market presence[8] - The Group plans to establish Vocational Education Industrial Parks in major student recruitment provinces to enhance teaching and training facilities[65] - The Group intends to expand its school network to cover all provincial capital cities in China, targeting cities with high demand for skilled workers[67] - The Group is exploring new markets for vocational training in emerging fields such as artificial intelligence and healthcare[70] Shareholding and Corporate Governance - As of June 30, 2024, Mr. Wu Junbao holds 721,792,602 shares, representing 33.13% of the company's issued share capital[83] - Mr. Wu Wei owns 490,361,609 shares, accounting for 22.51% of the total issued share capital[83] - The interests of directors and chief executives in associated corporations are significant, indicating strong ownership ties[84] - The company has complied with all code provisions set out in the Corporate Governance Code during the six months ended June 30, 2024[106] - The company is committed to enhancing its corporate governance practices to safeguard the interests of shareholders and potential investors[106] Compliance and Regulatory Environment - The Group is subject to annual reviews of connected transactions by relevant governmental authorities[108] - The newly revised "Vocational Education Law of the People's Republic of China" was implemented in May 2022, improving the recognition of vocational education[115] - The Group's vocational education business aligns with the requirements of modern vocational education systems as outlined in recent policies, which is expected to benefit future development[116] Cash Flow and Investments - Net cash from operating activities for the six months ended June 30, 2024, was RMB 639,213, an increase of 31% compared to RMB 487,865 for the same period in 2023[148] - Net cash used in investing activities amounted to RMB (245,028) for the six months ended June 30, 2024, compared to RMB (145,166) in the same period of 2023, indicating a significant increase in investment outflows[148] - The company received asset-related government grants amounting to RMB 39,169, a significant increase from RMB 368 in the same period last year[148] - The company reported a net cash used in financing activities of RMB (566,056), a decrease from RMB (595,240) in the same period of 2023, reflecting improved financing efficiency[148]
中国东方教育(00667) - 2024 - 中期财报