思考乐教育(01769) - 2024 - 中期业绩

Summary Financial Summary Sikale Education Group's unaudited interim results for the six months ended June 30, 2024, show significant growth in revenue, operating profit, profit attributable to owners, and earnings per share 2024 H1 Key Financial Data (Unaudited) | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | Change (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | 399,113 | 251,323 | 147,790 | 58.8% | | Operating Profit | 113,819 | 49,656 | 64,163 | 129.2% | | Profit for the period attributable to owners | 82,652 | 42,938 | 39,714 | 92.5% | | Adjusted profit for the period attributable to owners | 93,542 | 46,511 | 47,031 | 101.1% | | Basic EPS (RMB cents) | 15.21 | 7.73 | 7.48 | 96.8% | | Diluted EPS (RMB cents) | 14.76 | 7.66 | 7.10 | 92.7% | | Adjusted Basic EPS (RMB cents) | 17.21 | 8.37 | 8.84 | 105.6% | | Adjusted Diluted EPS (RMB cents) | 16.71 | 8.29 | 8.42 | 101.6% | Non-IFRS Measures Adjusted Profit for the Period Attributable to Owners The company defines adjusted profit attributable to owners as profit for the period excluding non-operating performance items like share option benefit expenses, to accurately assess the Group's financial performance - Share option benefit expenses increased by 204.8% from RMB 3.6 million in 2023 to RMB 10.9 million in 2024[2] - Adjusted profit for the period attributable to owners increased by 101.1% year-on-year to RMB 93.542 million[2] Adjusted Earnings Per Share Adjusted earnings per share provides investors with a clearer measure of operating performance by excluding non-cash expenses such as share option benefit expenses - Adjusted basic earnings per share increased by 105.6% from RMB 8.37 cents in 2023 to RMB 17.21 cents in 2024[4] - Adjusted diluted earnings per share increased by 101.6% from RMB 8.29 cents in 2023 to RMB 16.71 cents in 2024[6] - The weighted average number of shares used to calculate adjusted diluted earnings per share slightly decreased from 560,864,000 shares in 2023 to 559,942,000 shares in 2024 due to share option adjustments[6] Management Discussion and Analysis Performance Overview The Group's core business remains profitable, with significant growth in revenue and net profit driven by business transformation and the vigorous development of non-academic quality courses - Operating profit reached RMB 113.8 million[7] - Revenue from quality-oriented courses increased from RMB 232.2 million in the prior period to RMB 366.5 million, with related tutoring class hours increasing from 2,675,300 to 4,202,896[7] - Total revenue increased by 58.8% year-on-year to RMB 399.1 million[7] - Net profit attributable to owners increased by 92.5% year-on-year to RMB 82.7 million, primarily due to increased tutoring class hours and improved operating efficiency[7] Future Prospects and Development Strategies The Group will expand education tourism and international courses, strengthen 'Lexue' brand quality education, and actively seek new business opportunities for diversified development, while strictly controlling costs and enhancing service quality and operational efficiency - Education tourism business and international courses were launched since July 2023 to broaden the revenue base[8] - The Group will further strengthen quality education under the 'Lexue' brand, including art, sports, painting, performing arts, calligraphy, scientific literacy, traditional Chinese studies, logical thinking training, and international literacy[8] - Looking ahead, the Group will pursue comprehensive diversified development, leverage brand influence to seek new business opportunities, and continue to strictly control costs, maintain stable cash flow, and enhance service quality and operational efficiency[8] Financial Review Revenue The Group's revenue increased by 58.8% year-on-year, primarily driven by a significant increase in total student enrollments and tutoring class hours, with non-academic quality courses contributing the most Revenue by Education Service Category | Revenue Category | 2024 (RMB thousands) | 2023 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Non-academic quality courses and other tutoring courses | 366,525 | 232,216 | 57.8% | | Tutoring courses | 32,588 | 19,107 | 70.6% | | Total | 399,113 | 251,323 | 58.8% | Student Enrollments and Completed Tutoring Class Hours by Education Service Category | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Non-academic quality courses student enrollments | 169,739 | 107,908 | 57.3% | | Non-academic quality courses tutoring class hours | 4,202,896 | 2,675,300 | 57.1% | | Tutoring courses student enrollments | 14,666 | 8,622 | 70.1% | | Tutoring courses tutoring class hours | 361,356 | 212,300 | 70.2% | | Total student enrollments | 184,405 | 116,530 | 58.2% | | Total tutoring class hours | 4,564,252 | 2,887,600 | 58.1% | Cost of Sales Cost of sales increased by 50.7% to RMB 222.0 million, primarily due to higher teacher salaries and right-of-use asset amortization, but the increase was lower than revenue growth, indicating improved operating efficiency - Cost of sales increased by 50.7% to RMB 222.0 million[11] - Primarily due to increased teacher salaries and amortization of right-of-use assets, driven by learning center network expansion and business growth[11] - The increase in cost of sales was lower than the increase in revenue, reflecting improved operating efficiency[11] Gross Profit and Gross Margin Gross profit increased by 70.2% to RMB 177.1 million, with gross margin improving from 41.4% to 44.4%, reflecting enhanced profitability - Gross profit increased by 70.2% to RMB 177.1 million[12] - Gross margin improved from 41.4% to 44.4%[12] Selling Expenses Selling expenses increased by 26.6% to RMB 6.5 million, primarily due to higher student activity expenses - Selling expenses increased by 26.6% to RMB 6.5 million[13] - Primarily due to increased student activity expenses[13] Administrative Expenses Administrative expenses increased by 11.5% to RMB 56.2 million, mainly due to higher administrative staff expenses, partially offset by a decrease in impairment provisions - Administrative expenses increased by 11.5% to RMB 56.2 million[14] - Primarily due to increased administrative staff expenses, partially offset by a decrease in impairment provisions[14] Research and Development Expenses Research and development expenses increased by 21.3% to RMB 10.6 million, primarily due to higher R&D personnel expenses - Research and development expenses increased by 21.3% to RMB 10.6 million[15] - Primarily due to increased R&D personnel expenses[15] Other Income Net other income increased by 56.2% to RMB 6.5 million, primarily driven by higher finance income, but partially offset by a decrease in government grants - Net other income increased by 56.2% to RMB 6.5 million[16] - Primarily due to an increase in finance income of RMB 3.9 million, partially offset by a decrease in government grants of RMB 1.1 million[16] Other Gains—Net Net other gains decreased by 38.9% to RMB 3.5 million, mainly due to net foreign exchange losses, partially offset by an increase in lease modifications - Net other gains decreased by 38.9% to RMB 3.5 million[17] - Primarily due to a net foreign exchange loss of RMB 0.5 million (compared to a gain of RMB 1.0 million in the prior period), partially offset by an increase in lease modifications of RMB 1.3 million[17] Finance Costs Finance costs increased by 73.6% to RMB 4.8 million, primarily due to higher interest expenses on lease liabilities and borrowings - Finance costs increased by 73.6% to RMB 4.8 million[18] - Primarily due to increased interest expenses on lease liabilities and borrowings[18] Profit Before Income Tax Profit before income tax increased by 132.5% to RMB 109.0 million, indicating a significant improvement in the Group's overall profitability - Profit before income tax increased by 132.5% to RMB 109.0 million[19] Income Tax Expense Income tax expense increased by 506.8% to RMB 26.8 million, primarily due to a substantial increase in taxable profit - Income tax expense increased by 506.8% to RMB 26.8 million[20] - Primarily due to increased taxable profit[20] Profit for the Period Attributable to Owners Profit for the period attributable to owners increased by 92.5% to RMB 82.7 million, reflecting a significant increase in value created for shareholders - Profit for the period attributable to owners increased by 92.5% to RMB 82.7 million[21] Liquidity, Financial Resources and Capital Structure Overview The Group's total equity and cash and cash equivalents increased, but net current assets decreased, while new bank borrowings led to an increase in the gearing ratio - Total equity increased from RMB 453.4 million as of December 31, 2023, to RMB 532.1 million as of June 30, 2024[22] - Cash and cash equivalents increased by 7.7% to RMB 276.2 million[22] - Total current assets decreased from RMB 497.1 million to RMB 470.0 million, while total current liabilities increased from RMB 450.8 million to RMB 459.3 million[22] - New bank borrowings of RMB 30.0 million led to an increase in the gearing ratio from 0% to 5.6%[22] - Net current assets decreased from RMB 46.4 million to RMB 10.8 million[22] Treasury Management Policy The Group utilizes surplus cash reserves by investing in low-risk, short-term wealth management products, with strict approval and monitoring mechanisms to manage risks and optimize investment performance - Surplus cash reserves are utilized to invest in low-risk wealth management products to generate income, with investment horizons typically not exceeding one year[23] - Investment scope includes low-risk, capital-guaranteed unit trusts, structured deposits, money market instruments, debt instruments, and listed/unlisted securities issued by trust companies and commercial banks[23] - The treasury department is responsible for executing, tracking, and analyzing investment decisions, reviewing cash positions, operating cash needs, and potential investment opportunities monthly, with all investment decisions requiring approval from the Chairman of the Board[24] Foreign Exchange Risk Most of the Group's revenue, expenses, cash, and bank deposits are denominated in RMB and HKD, with no foreign currency hedging policy currently in place, but management will continue to monitor foreign exchange risk - Most of the Group's revenue and expenses are denominated in RMB, and most cash and bank deposits are denominated in RMB and HKD[25] - The Group currently has no foreign currency hedging policy, and management will continue to monitor foreign exchange risk and consider prudent measures when appropriate[25] Significant Acquisitions and Disposals and Significant Investments During the reporting period, the Group did not undertake any significant investments, acquisitions, or disposals, but will actively seek future investment opportunities to broaden its revenue base and enhance profitability - For the six months ended June 30, 2024, the company did not undertake any significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[26] - The Group will strive to adapt to changing market conditions and actively seek investment opportunities to broaden its revenue base and enhance its future financial performance and profitability[26] Other Information Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (for the six months ended June 30, 2023: nil)[27] Contingent Liabilities At the end of the reporting period, the Group had no significant contingent liabilities, guarantees, or pending litigations - As of June 30, 2024, the Group had no significant contingent liabilities, guarantees, or any significant pending or threatened litigations or claims against any member of the Group[28] Pledge of Assets At the end of the reporting period, the Group had no significant pledge of assets - As of June 30, 2024, and December 31, 2023, the Group had no significant pledge of assets[29] Employees and Remuneration Policy The Group considers employees a valuable asset, with the number of employees increasing to 2,603 as of June 30, 2024, and remuneration policies are consistent with market practices and continuously reviewed for competitiveness - As of June 30, 2024, the Group employed a total of 2,603 employees (December 31, 2023: 2,319 employees)[30] - Remuneration policies are consistent with prevailing market practices and determined based on individual employee performance and experience, with continuous review to ensure market competitiveness[30] Post-Balance Sheet Events Subsequent to the reporting period, the trustee of the company's share award scheme acquired 1,540,000 shares, and 9,169,050 share options were exercised, resulting in new share issuance - Between July 3 and July 15, 2024, the trustee of the company's share award scheme acquired a total of 1,540,000 ordinary shares of the company from the market for a total consideration of HKD 6,977,000 (equivalent to RMB 6,370,000)[31] - On July 10, 2024, 9,169,050 share options granted and vested under the share option scheme were exercised at an exercise price of HKD 1.62 per share, resulting in the issuance and allotment of 9,169,050 new shares[31] Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Comprehensive Income The Group achieved strong financial growth during the reporting period, with significant increases in revenue and operating profit, and profit attributable to owners growing by 92.5% year-on-year Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 399,113 | 251,323 | | Cost of Sales | (221,975) | (147,265) | | Gross Profit | 177,138 | 104,058 | | Operating Profit | 113,819 | 49,656 | | Profit Before Income Tax | 109,003 | 46,882 | | Income Tax Expense | (26,748) | (4,408) | | Profit for the period | 82,255 | 42,474 | | Profit attributable to owners | 82,652 | 42,938 | | Basic EPS (RMB cents) | 15.21 | 7.73 | | Diluted EPS (RMB cents) | 14.76 | 7.66 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets and total equity both increased, with a significant rise in non-current assets, particularly right-of-use assets, while current liabilities slightly increased Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Assets | | | | Total non-current assets | 694,466 | 536,110 | | Total current assets | 470,023 | 497,105 | | Total Assets | 1,164,489 | 1,033,215 | | Equity | | | | Capital and reserves attributable to owners of the Company | 532,662 | 454,825 | | Non-controlling interests | (595) | (1,475) | | Total Equity | 532,067 | 453,350 | | Liabilities | | | | Total non-current liabilities | 173,163 | 129,112 | | Total current liabilities | 459,259 | 450,753 | | Total Liabilities | 632,422 | 579,865 | | Total Equity and Liabilities | 1,164,489 | 1,033,215 | - Right-of-use assets increased from RMB 200,586 thousand as of December 31, 2023, to RMB 305,437 thousand as of June 30, 2024[33] - Bank balances and cash decreased from RMB 364,900 thousand to RMB 278,400 thousand, while other current financial assets measured at amortized cost increased from RMB 10,000 thousand to RMB 65,615 thousand[22][33] Notes to the Interim Condensed Consolidated Financial Information General Information Sikale Education Group was incorporated in the Cayman Islands, primarily engaged in providing private education services in China, with its ordinary shares listed on the Hong Kong Stock Exchange - The Company was incorporated in the Cayman Islands on February 7, 2018, primarily engaged in providing private education services in China[35] - The Company's ordinary shares were listed on The Stock Exchange of Hong Kong Limited on June 21, 2019[35] Basis of Preparation The interim financial information is prepared in accordance with IAS 34 and should be read in conjunction with the annual financial statements, with the Group continuing to adopt the going concern basis - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' issued by the International Accounting Standards Board[36] - This interim condensed consolidated financial information should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2023, prepared in accordance with IFRS[36] - The Directors believe that the Group's existing funding sources are sufficient to meet its financial obligations for the next 12 months, thus continuing to adopt the going concern basis[36] Accounting Policies The financial information for this period applies the same accounting policies as the 2023 annual financial statements, with the adoption of new and revised IFRS standards not expected to have a significant impact - The accounting policies applied in this financial information are consistent with those applied in the 2023 financial statements, except for the adoption of new and revised standards[38] - New and revised standards adopted include amendments to IAS 1 and IFRS 16, among others[39] - The adoption of new and revised standards and interpretations is not expected to have a significant impact on the interim condensed consolidated financial information[41] Financial Risk Management The Group faces market, credit, and liquidity risks, managed through sufficient cash, bank financing, and low-risk investments, with fair values regularly assessed Financial Risk Factors The Group's activities are exposed to market risks (including foreign exchange and interest rate risks), credit risk, and liquidity risk, with an overall risk management plan aiming to minimize financial market unpredictability - The Group's activities are exposed to various financial risks: market risk (including foreign exchange risk and cash flow and fair value interest rate risk), credit risk, and liquidity risk[43] - There have been no significant changes in risk management functions or any risk management policies since December 31, 2023[43] Liquidity Risk The Group manages liquidity risk by holding sufficient cash and bank balances and utilizing bank financing, with Directors believing there is no significant liquidity risk - The Group manages liquidity risk by holding sufficient cash and bank balances, further mitigating it by maintaining cash reserves and utilizing bank financing[44] Maturity Analysis of Financial Liabilities | Liability Category | Within one year (RMB thousands) | One to two years (RMB thousands) | Two to five years (RMB thousands) | Over five years (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | June 30, 2024 | | | | | | | Trade payables | 3,204 | — | — | — | 3,204 | | Other payables | 13,876 | — | — | — | 13,876 | | Borrowings | 30,769 | — | — | — | 30,769 | | Lease liabilities | 79,307 | 67,505 | 104,282 | 43,333 | 294,427 | | Total | 127,156 | 67,505 | 104,282 | 43,333 | 342,276 | | December 31, 2023 | | | | | | | Trade payables | 2,967 | — | — | — | 2,967 | | Other payables | 14,195 | — | — | — | 14,195 | | Lease liabilities | 58,478 | 49,960 | 83,099 | 137,617 | 329,154 | | Total | 75,640 | 49,960 | 83,099 | 137,617 | 346,316 | Fair Value Estimation The Group's financial instruments measured at fair value are categorized into three levels based on valuation technique inputs, with regular valuation management and external expert assistance when necessary - Financial instruments measured at fair value are categorized into three levels based on valuation technique inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[46] Fair Value Hierarchy Analysis of Financial Instruments | Financial Instruments | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | June 30, 2024 | | | | | | Wealth management products | — | — | 75,092 | 75,092 | | Listed equity investments in Mainland China | 2,345 | — | — | 2,345 | | Unlisted equity investments in Mainland China | — | — | 47,319 | 47,319 | | Total | 2,345 | — | 122,411 | 124,756 | | December 31, 2023 | | | | | | Wealth management products | — | — | 98,672 | 98,672 | | Listed equity investments in Mainland China | 2,979 | — | — | 2,979 | | Unlisted equity investments in Mainland China | — | — | 47,769 | 47,769 | | Total | 2,979 | — | 146,441 | 149,420 | - Fair value estimation for Level 3 instruments is primarily based on quotes from financial institutions and market approaches, using various applicable valuation methods, including discounted cash flow[48] Revenue and Segment Information The Group primarily operates private education services in Guangdong Province, China, treating it as a single operating segment, with revenue mainly derived from private education services during the reporting period - The Group's primary operating decision-maker (the Board) reviews consolidated results and considers the Group to operate and be managed as a single operating segment for private education services for the six months ended June 30, 2024[49] - The Group's main market is Guangdong Province, China, with most revenue and operating profit derived from Guangdong Province[49] - Revenue from private education services and other income amounted to RMB 399,113 thousand (2023: RMB 251,323 thousand)[50] Other Income Other income primarily consists of finance income, operating lease rental income, and government grants, with finance income significantly increasing in the current period Details of Other Income | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Net sub-lease income | 166 | 354 | | Rental income from operating leases | 1,226 | 1,467 | | Finance income | 4,645 | 792 | | Government grants | 419 | 1,521 | | Total | 6,456 | 4,134 | Other Gains—Net Net other gains primarily include fair value gains on financial assets at fair value through profit or loss, lease modifications, and foreign exchange gains/losses, with foreign exchange shifting from a gain to a loss in the current period Details of Other Gains—Net | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss | 3,491 | 3,669 | | Lease modifications | 1,601 | 279 | | Net gains/(losses) on disposal of property, plant and equipment | 41 | (20) | | Deposit losses | (361) | (226) | | Compensation expenses | (444) | (115) | | Fair value losses on investment properties | (620) | (400) | | Net foreign exchange (losses)/gains | (501) | 980 | | Others | 286 | 1,551 | | Total | 3,493 | 5,718 | Expenses by Nature The Group's main expenses are employee benefit expenses, depreciation, and amortization, with employee benefit expenses significantly increasing in the current period Details of Expenses by Nature | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Employee benefit expenses | 219,650 | 147,712 | | Depreciation and amortization | 36,153 | 28,441 | | Property management expenses | 6,372 | 3,081 | | Teaching materials | 5,346 | 3,689 | | Advertising and exhibition expenses | 4,247 | 4,247 | | Maintenance costs | 2,870 | 1,569 | | Professional service fees | 2,393 | 3,336 | | Office expenses | 2,321 | 2,827 | | Utilities | 2,028 | 1,370 | | Other taxes | 1,721 | 1,192 | | Auditor's remuneration | 650 | 650 | | Impairment provisions | 398 | 3,794 | | Others | 11,094 | 8,235 | | Total | 295,243 | 211,519 | Finance Costs Finance costs primarily consist of interest expenses on lease liabilities, significantly increasing in the current period due to higher interest expenses on borrowings Details of Finance Costs | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Interest expense on borrowings | 350 | — | | Interest expense on lease liabilities | 4,466 | 2,774 | | Total | 4,816 | 2,774 | Income Tax Expense Income tax expense significantly increased, primarily due to a substantial rise in current tax on profit for the period Details of Income Tax Expense | Category | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Current tax—current tax on profit for the period | 28,961 | 3,830 | | Deferred income tax—deferred income tax (decrease)/increase | (2,213) | 578 | | Income Tax Expense | 26,748 | 4,408 | Earnings Per Share Both basic and diluted earnings per share achieved substantial growth, reflecting the Group's enhanced profitability Basic Earnings Per Share Basic earnings per share is calculated by dividing profit attributable to owners by the weighted average number of ordinary shares outstanding, showing significant growth in the current period Basic Earnings Per Share Calculation | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 82,652 | 42,938 | | Weighted average number of ordinary shares in issue (thousands) | 543,391 | 555,515 | | Basic EPS (RMB cents per share) | 15.21 | 7.73 | Diluted Earnings Per Share Diluted earnings per share considers the dilutive effect of potential ordinary shares, such as share options, also achieving substantial growth in the current period Diluted Earnings Per Share Calculation | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Diluted EPS (RMB cents per share) | 14.76 | 7.66 | | Weighted average number of ordinary shares used as denominator for basic EPS | 543,391,000 | 555,515,000 | | Adjustments for diluted EPS: share options | 16,551,000 | 5,349,000 | | Weighted average number of ordinary shares and potential ordinary shares used as denominator for diluted EPS | 559,942,000 | 560,864,000 | Right-of-Use Assets and Leases The Group's right-of-use assets and lease liabilities both increased, reflecting expanded leasing activities, with corresponding rises in depreciation expenses and lease finance costs Right-of-Use Assets and Lease Liabilities | Category | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Right-of-use assets | | | | Land use rights | 74,067 | 43,594 | | Properties | 231,370 | 156,992 | | Total | 305,437 | 200,586 | | Lease liabilities | | | | Current | 70,405 | 50,899 | | Non-current | 165,117 | 124,186 | | Total | 235,522 | 175,085 | - Depreciation expense for right-of-use assets increased from RMB 22,241 thousand in 2023 to RMB 27,874 thousand in 2024[61] - Lease finance costs increased from RMB 2,774 thousand in 2023 to RMB 4,466 thousand in 2024[61] - Cash outflow from lease financing activities increased from RMB 21,504 thousand in 2023 to RMB 31,962 thousand in 2024[62] Share Capital As of the end of the reporting period, the company's authorized and issued ordinary share capital and par value remained unchanged - As of June 30, 2024, authorized ordinary shares were 1,000,000,000 with a par value of USD 1,000,000 (RMB 6,860,633); issued ordinary shares were 555,700,000 with a par value of USD 555,700 (RMB 3,774,897)[63] Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (for the six months ended June 30, 2023: nil)[64] Trade and Other Payables Trade payables are primarily related to the purchase of educational books and teaching aids, with a typical credit period of three months, and slightly increased in the current period - Trade payables are primarily related to the purchase of educational books and other teaching aids, with a typical credit period of three months granted to the Group[65] Details of Trade and Other Payables | Category | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 3,204 | 2,967 | | Employee benefit payables | 33,674 | 61,236 | | Other tax payables | 14,904 | 15,794 | | Payables for leasehold improvements | 4,213 | 2,250 | | Interest payables | 99 | — | | Other payables | 9,564 | 11,945 | | Total | 65,658 | 94,192 | Post-Balance Sheet Events Subsequent to the reporting period, the trustee of the company's share award scheme acquired 1,540,000 shares, and 9,169,050 share options were exercised, resulting in new share issuance - Between July 3 and July 15, 2024, the trustee of the company's share award scheme acquired a total of 1,540,000 ordinary shares of the company from the market for a total consideration of HKD 6,977,000 (equivalent to RMB 6,370,000)[31] - On July 10, 2024, 9,169,050 share options granted and vested under the share option scheme were exercised at an exercise price of HKD 1.62 per share, resulting in the issuance and allotment of 9,169,050 new shares[31] Corporate Governance and Other Information Compliance with the Corporate Governance Code on Corporate Governance Practices For the six months ended June 30, 2024, the company complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules - For the six months ended June 30, 2024, the company complied with all applicable code provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix C1 of the Listing Rules[68] Compliance with the Model Code for Securities Transactions by Directors The company adopted the Model Code for Securities Transactions by Directors as its securities dealing code and confirmed that directors and relevant employees complied with it during the reporting period - The company adopted the Model Code for Securities Transactions by Directors set out in Appendix C3 of the Listing Rules as its securities dealing code to regulate all securities transactions by the company's directors and relevant employees[69] - Following specific enquiries with all directors and relevant employees, they confirmed compliance with the Model Code for the six months ended June 30, 2024[69] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviews and oversees the Group's financial reporting, risk management, and internal control systems, and has reviewed the interim financial statements for this period - The Audit Committee comprises three independent non-executive directors: Mr Wong Wai Tak (Chairman), Mr Yang Xuezhi, and Ms Yan Jiamin[70] - The Audit Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting, risk management, and internal control systems, and it has reviewed the Group's unaudited interim condensed consolidated financial statements and this interim results announcement for the six months ended June 30, 2024[70] - The Audit Committee also met with the independent auditor, PricewaterhouseCoopers, to discuss matters concerning the company's accounting policies, practices, and internal controls[70] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, the company repurchased 758,000 shares on the Stock Exchange, which the Directors believe will enhance earnings per share and net asset value per share - For the six months ended June 30, 2024, the company repurchased a total of 758,000 shares on the Stock Exchange for a total consideration of HKD 2,312,730[71] - The highest price paid for repurchased shares was HKD 4.34 per share, and the lowest price was HKD 2.17 per share[71] - The Directors believe that such repurchases will enhance earnings per share and increase net asset value per share attributable to shareholders[71] Publication of this Interim Results Announcement and Interim Report This announcement has been published on the Stock Exchange and the company's website, and the interim report will be published and dispatched to shareholders in due course - This announcement is published on the Stock Exchange website www.hkexnews.hk and the company's website http://www.skledu.com[72](index=72&type=chunk) - The Group's interim report for the six months ended June 30, 2024, will be published on the aforementioned websites and dispatched to the company's shareholders in due course[72] Definitions This section provides definitions for key terms used in the report, including Board, Corporate Governance Code, Company, Directors, Group, IFRS, Listing Rules, Model Code, Share Award Scheme, Shares, Shareholders, Share Option Scheme, Stock Exchange, and Trustee - This section provides definitions for key terms used in the report, such as 'Board', 'Corporate Governance Code', 'Company', 'Group', 'IFRS', 'Listing Rules', 'Model Code', 'Share Award Scheme', and 'Share Option Scheme'[73][74][75] Board of Directors This section lists the company's Board of Directors, including executive and independent non-executive directors - Board members include executive directors Mr Chen Qiyuan (Chairman), Mr Qi Mingzhi (Chief Executive Officer), Ms Li Ailing, and Ms Leng Xinlan[75] - Independent non-executive directors include Mr Wong Wai Tak, Mr Yang Xuezhi, and Ms Yan Jiamin[74]