Revenue and Profit Growth - Revenue increased by 41.9% from RMB 402.1 million in 2022 to RMB 570.6 million in 2023, driven by an increase in student enrollments and tutoring hours due to the expansion of learning centers[14] - Gross profit rose by 72.0% from RMB 138.7 million in 2022 to RMB 238.6 million in 2023, with gross margin improving significantly[32] - Adjusted net profit attributable to equity holders surged by 98.5% from RMB 54.4 million in 2022 to RMB 108.0 million in 2023, excluding non-operational items such as share-based compensation and losses from the live e-commerce business[32] - The company's pre-tax profit increased by 175.9% from RMB 42.3 million in 2022 to RMB 116.7 million in 2023[19] - The company's adjusted basic earnings per share increased from RMB 0.0979 in 2022 to RMB 0.1956 in 2023[23] Business Expansion and Strategy - The company plans to expand its "LeXue" brand, focusing on quality education in areas such as art, sports, painting, and international literacy, to meet diverse student needs and promote holistic development[36] - The company is exploring new opportunities, including educational tourism and international courses, to diversify its revenue base and contribute to long-term growth[32] - The number of learning centers increased during 2023, contributing to the growth in student enrollments and tutoring hours[14] - The company's future prospects and development strategies are outlined in the Chairman's Report on pages 6-7 of the annual report[105] Expenses and Cost Management - Sales expenses increased by 144.2% from RMB 4.7 million in 2022 to RMB 11.4 million in 2023, primarily due to advertising and exhibition expenses, as well as customer service costs related to the live e-commerce business, which was terminated at the end of 2023[17] - The live e-commerce business, which incurred a net loss of RMB 13.9 million in 2023, was terminated, and no significant related expenses are expected in 2024[7] Share Repurchase and Capital Management - The company repurchased a total of 10,397,000 shares on the Hong Kong Stock Exchange during the year ended December 31, 2023[43] - The company repurchased 438,000 shares from the market between January 1, 2024, and January 19, 2024, for a total consideration of HKD 997,000 (approximately RMB 906,000), to be held for cancellation[63] - The company repurchased a total of 330,000 shares on the Hong Kong Stock Exchange at a total cost of HKD 289,360, with the highest price per share at HKD 0.93 and the lowest at HKD 0.86[84] - The company's repurchased shares have not been canceled, and the board believes this will increase earnings per share and net asset value per share[84] Corporate Governance and Board Structure - The company has appointed three independent non-executive directors, constituting more than one-third of the board, to balance the interests of shareholders and enhance overall corporate governance[81] - The company's board decision-making mechanisms include provisions to avoid conflicts of interest, requiring directors to declare any significant interests in contracts or arrangements[81] - The company's board of directors includes four executive directors, one non-executive director, and three independent non-executive directors as of the annual report date[117] - The company has established four board committees: Audit Committee, Remuneration Committee, Nomination Committee, and Strategic Development Committee to oversee specific areas of corporate governance[192] Employee and Compensation Management - The company employed a total of 2,319 employees as of December 31, 2023, compared to 1,350 employees in 2022, representing a significant increase[54] - The company's compensation policy is aligned with market practices and is determined based on individual employee performance and experience[54] - The company's retirement and employee benefit plan details are provided in Note 39.17 of the consolidated financial statements[52] - The company's directors and top five highest-paid individuals' remuneration details are disclosed in the consolidated financial statements[115] - The company has adopted a share incentive plan and a share plan to provide rewards to eligible employees[116] - The company's share incentive plan aims to retain and attract talent by providing direct economic benefits to eligible participants, without diluting existing shareholders[198][199] - The board of directors has the authority to determine the number of incentive shares awarded to selected participants based on the company's financial condition and the participants' performance and rank[200] Legal and Compliance - The company has not issued any debentures during the year ended December 31, 2023[46] - The company has not been involved in any significant litigation or arbitration during the year ended December 31, 2023[47] - The company has arranged appropriate insurance for legal proceedings against directors and senior management[49] - The company's structural contracts remain legally enforceable as of December 31, 2023, with no violations of current Chinese laws and regulations[82] - The company has implemented measures to enhance control over its Chinese operating entities prior to the termination of structural contracts[82] - The company is committed to disclosing any significant adverse impacts from changes in foreign investment laws and ensuring compliance with these laws[78] - The company is not aware of any unfulfilled structural contracts or non-compliance with the measures as of the annual report date[82] - The company has maintained its structural contracts without significant changes as of the annual report date[83] - The company's legal advisor confirmed that the structural contracts are enforceable and compliant with Chinese laws as of December 31, 2023[82] Shareholder and Equity Management - The company's share premium available for distribution to shareholders was approximately RMB 79.8 million as of December 31, 2023[132] - The company's major shareholder, Tiansheng, held a 39.48% beneficial ownership interest in the company as of December 31, 2023[146] - Chen Qiyuan, the controlling shareholder, holds 219,395,000 shares, representing approximately 39.48% of the company's equity[164] - The company maintains a public float of at least 25% of its total issued shares, as required by the Hong Kong Stock Exchange listing rules[187] Share Option and Incentive Plans - The company's share option plan allows the board to grant options to eligible participants within 10 years from the adoption date, with an exercise price determined by the board[148] - The company's share option plan aims to retain, incentivize, and reward selected participants, with a nominal acceptance fee of HKD 1.00[150] - The company's board has the authority to determine the exercise price of share options, which must not be lower than the highest of the closing price, the average closing price of the preceding five trading days, or the par value of the shares[151] - The company granted 27,785,000 share options under the share option plan on February 6, 2023, with an exercise price of HKD 1.62 per share[152] - The fair value of each share option granted was estimated to be between HKD 0.81 and HKD 1.01 using a trinomial valuation model, with key inputs including a stock price of HKD 1.53, expected volatility of 86.32%, and a risk-free interest rate of 3.29% to 3.57%[154] - The maximum number of shares that can be granted under the share award plan is limited to 1% of the company's issued share capital as of the adoption date[157] - The total number of shares that may be issued upon the exercise of all share options granted under the share option plan is capped at 55,570,000 shares, representing 10% of the issued shares as of the annual report date[174] - The company granted a total of 27,785,000 share options to grantees under the share option plan on February 6, 2023, with vesting conditions tied to performance standards and employment duration[178] - The share options will vest in three tranches: 33% after the 2023 annual results announcement, 33% after the 2024 annual results announcement, and the remaining 34% after the 2025 annual results announcement[178] - The share option plan was terminated on February 27, 2024, and no further share options will be granted under this plan, although previously granted options remain exercisable[197] Financial and Operational Details - The company's top five suppliers accounted for less than 30% of the cost of revenue for the year ended December 31, 2023[107] - The company had no bank borrowings as of December 31, 2023, and December 31, 2022[111] - The company's property, plant, and equipment details are included in the consolidated financial statements[110] - The company's top five customers contributed less than 30% of the total revenue for the year ended December 31, 2023[127] - The company implemented environmental protection measures and encouraged employees to save energy and reduce waste, with no environmental violations reported for the year[128] - The company's environmental, social, and governance (ESG) performance and policies are detailed in the annual report[109] Dividend and Shareholder Returns - The company does not recommend paying a final dividend for the year ended December 31, 2023 (year ended December 31, 2022: none)[90] - The total number of shares available for future grants under the share plan is 38,899,000, with a service provider sub-limit of 5,557,000 shares[91] Auditors and Financial Reporting - PricewaterhouseCoopers was appointed as the auditor for the fiscal year ending December 31, 2023, and audited the financial statements prepared under International Financial Reporting Standards[189] Leadership and Management - The company's founder, Mr. Chen Qiyuan, is responsible for the overall formulation and guidance of the company's business strategy and development[65] - The company's CFO, Mr. Hua Ribao, is responsible for the financial management of the group[74] - The company's independent non-executive directors have service contracts with an initial fixed term of one year, terminable with at least three months' written notice[136] - The company's board has established a remuneration committee to review the company's remuneration policies and structures for directors and senior management based on performance and market practices[137]
思考乐教育(01769) - 2023 - 年度财报