民生教育(01569) - 2024 - 中期业绩

Interim Results Summary The group achieved key progress in for-profit school registration while experiencing a significant decline in core financial performance indicators during the period Progress on For-Profit School Registration The group achieved significant progress in for-profit school registration, with Dianchi College approved to operate as a for-profit entity from the 2024-2025 academic year - Yunnan University Dianchi College has been approved to convert into a for-profit private undergraduate institution, "Dianchi College," and will begin enrolling students under this status in the 2024-2025 academic year, marking a key milestone in the group's for-profit transformation[1] - Applications for for-profit school registration for other major schools within the group are still in various early stages[1] Key Financial Performance Indicators The group experienced significant year-on-year declines in revenue, gross profit, and profit for the period, despite maintaining a healthy gearing ratio Overview of Key Financial Indicators for H1 2024 | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. RMB 1,079.8 million | Approx. RMB 1,209.0 million | -10.7% | | Gross Profit | Approx. RMB 580.8 million | Approx. RMB 725.1 million | -19.9% | | Profit for the Period | Approx. RMB 113.2 million | Approx. RMB 306.5 million | -63.1% | | Gross Profit Margin | Approx. 53.8% | Approx. 60.0% | -6.2 percentage points | Assets and Liabilities as of June 30, 2024 | Indicator | Amount | | :--- | :--- | | Total Assets | Approx. RMB 10,778.6 million | | Net Assets | Approx. RMB 6,018.9 million | | Gearing Ratio | Approx. 38.0% | Interim Condensed Consolidated Financial Statements This section presents the group's consolidated financial performance and position, highlighting key changes in income, assets, and liabilities Consolidated Statement of Profit or Loss and Other Comprehensive Income The group's revenue declined by 10.7%, leading to a substantial 63.1% decrease in profit for the period and a significant drop in basic earnings per share Core Data from Consolidated Statement of Profit or Loss (For the six months ended June 30) | Item (RMB '000) | 2024 (Unaudited) | 2023 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,079,786 | 1,209,022 | -10.7% | | Gross Profit | 580,838 | 725,077 | -19.9% | | Profit Before Tax | 185,932 | 336,722 | -44.8% | | Profit for the Period | 113,165 | 306,545 | -63.1% | | Profit Attributable to Owners of the Parent | 104,802 | 292,608 | -64.2% | | Basic Earnings Per Share (RMB) | 0.0248 | 0.0694 | -64.3% | Consolidated Statement of Financial Position As of June 30, 2024, the group's total assets slightly increased, while cash and cash equivalents and contract liabilities significantly decreased Core Data from Consolidated Statement of Financial Position | Item (RMB '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 7,110,772 | 7,053,903 | +0.8% | | Total Current Assets | 3,667,795 | 4,312,665 | -14.9% | | Total Assets | 10,778,567 | 11,366,568 | -5.2% | | Total Current Liabilities | 3,188,231 | 3,775,242 | -15.6% | | Total Non-current Liabilities | 1,571,415 | 1,640,187 | -4.2% | | Total Liabilities | 4,759,646 | 5,415,429 | -12.1% | | Net Assets | 6,018,921 | 5,951,139 | +1.1% | - Cash and cash equivalents decreased from approximately RMB 3.19 billion at the end of 2023 to RMB 2.19 billion[5] - Contract liabilities, primarily advance tuition fees, significantly decreased from approximately RMB 833 million at the end of 2023 to RMB 108 million[5][24] Notes to the Interim Condensed Consolidated Financial Information This section provides detailed notes on the group's operating segments, revenue breakdown, and other significant financial items Operating Segment Information Campus education revenue slightly increased but segment results declined, while online education revenue significantly decreased and turned to a loss, impacting overall group performance Segment Revenue and Results (For the six months ended June 30) | Segment (RMB '000) | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Segment Revenue | | | | | Campus Education | 752,217 | 741,142 | +1.5% | | Online Education | 327,569 | 467,880 | -29.9% | | Segment Results | | | | | Campus Education | 283,924 | 394,152 | -28.0% | | Online Education | (2,372) | 50,251 | N/A (Profit to Loss) | Revenue, Other Income and Gains Total revenue declined by 10.7% due to a significant drop in online distance education services, while campus education fees showed stable growth Revenue from Contracts with Customers Breakdown (For the six months ended June 30) | Item (RMB '000) | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Tuition Fees | 690,920 | 681,295 | +1.4% | | Accommodation Fees | 61,297 | 59,847 | +2.4% | | Distance Education Services | 209,296 | 341,118 | -38.6% | | Teacher Training Services | 13,570 | 45,255 | -70.0% | | Total | 1,079,786 | 1,209,022 | -10.7% | Other Financial Notes Impairment losses on financial assets significantly increased, income tax expense surged, and no interim dividend was declared, impacting the group's financial performance - Impairment loss on financial assets shifted from a net reversal of RMB 1.84 million in the prior period to a net loss of RMB 58.14 million in the current period, significantly impacting profit[17] - Income tax expense increased from RMB 30.18 million in the prior period to RMB 72.77 million, a year-on-year increase of 141.1%, primarily due to income tax provisions made for the group's schools during the reporting period[18][50] - The Board did not declare any interim dividend for the six months ended June 30, 2024[19] Management Discussion and Analysis This section provides an overview of the group's diverse business segments, strategic outlook, and a detailed review of its financial performance and liquidity position Business Review The group operates as an "Internet+" vocational education provider across eight segments, serving over 50 million cumulative users with significant scale in campus and online education - The group has established eight major business segments, including campus education, online education, vocational skills enhancement, and human resource services, forming a nationwide vocational education network and talent employment service system[25] Campus Education Campus education, a cornerstone business, operates 10 schools with approximately 100,000 students, and one institution ranked 18th nationally among private universities Campus Education Business Scale | Item | Quantity | | :--- | :--- | | Number of Schools | 10 | | Total Student Enrollment | Approx. 100,000 | | Proportion of Full-time Undergraduates | Approx. 59% | | Undergraduate Programs | 121 | | Higher Vocational (Associate Degree) Programs | 146 | - Chongqing College of Humanities, Science and Technology, one of the group's institutions, ranked 18th among national private universities in the 2024 Soft Science China University Rankings, retaining its position as the top private university in Chongqing[27] Online Education Services Online education provides academic support to approximately 630,000 students through collaborations with 350 institutions, and its MBAChina platform has 3.4 million registered users - Online higher education continuing education services provide support to approximately 630,000 students through over 1,900 learning centers[29] - The MBAChina platform for management postgraduate education services has accumulated approximately 3.4 million registered users and collaborates with over 200 domestic and international business schools[30] Vocational Skills Enhancement and Training This segment includes teacher continuing education and IT vocational training, with Aopeng Education training 9 million teachers and Mooc.net accumulating 25 million users - Teacher continuing education training has cumulatively trained approximately 9 million teachers[32] - The IT vocational training platform Mooc.net has accumulated approximately 25 million users[33] Other Business Segments The group is expanding into human resources, digital education, and examination services, with its HR platform connecting 4.7 million users and HSK online exams serving over 180,000 candidates - The human resources service platform "Youxueleyi" covers over 20 provinces and cities nationwide, connecting approximately 4.7 million C-end users and 38,000 employers[35] - The HSK online examination service has established over 80 test centers domestically and internationally, cumulatively serving over 180,000 candidates[38] Future Outlook The group plans to enhance high-quality higher education and build a digital service platform ecosystem integrating learning, employment, and entrepreneurship - Strategy one: Steadfastly pursue high-quality development in higher education, increasing resource investment, optimizing teaching environment and faculty, and cultivating high-quality applied talents[40] - Strategy two: Continue to build a digital intelligence service platform ecosystem integrating "learning, employment, and entrepreneurship," comprehensively promoting service digitalization and intelligence[41] Financial Review Total revenue declined by 10.7% due to reduced online education, while increased impairment losses and higher staff costs led to a significant 63.1% drop in profit for the period - Total revenue decreased by 10.7%, primarily due to reduced online education revenue as Aopeng Education ceased network education enrollment[42] - Gross profit margin decreased from 60.0% to 53.8%, mainly due to increased campus education expenses[44] - Other net expenses increased from RMB 6.7 million to RMB 59.7 million, primarily due to increased impairment loss on financial assets[48] Reconciliation of Adjusted Net Profit (For the six months ended June 30) | Item (RMB '000) | 2024 | 2023 | | :--- | :--- | :--- | | Profit for the Period | 113,165 | 306,545 | | Add: Amortization of acquisition-related intangible assets, etc. | 21,570 | 65,482 | | Adjusted Net Profit | 131,547 | 364,822 | Financial and Liquidity Position The group maintains a healthy gearing ratio despite increased borrowings, but faces a significant contingent liability from an arbitration dispute over a put option - The gearing ratio (total interest-bearing borrowings/total equity) increased from 35.9% at the end of 2023 to 38.0% as of June 30, 2024, which the company considers a healthy level[60] - The group has a significant contingent liability: an arbitration dispute with the former shareholders of Lead Group regarding a put option for 49% equity, with the counterparty claiming approximately RMB 2.18 billion; the company believes the exercise of the option is invalid and has fulfilled its obligations regarding the granted option, thus no provision has been made[55] - Related to the aforementioned dispute, the recovery of the RMB 400 million loan principal and interest provided by the company to Lead Guojiao is also subject to arbitration[56] Other Corporate Information This section covers the company's dividend policy, securities activities, and adherence to corporate governance standards Dividends and Securities The Board did not declare an interim dividend, and no listed securities were purchased, sold, or redeemed during the reporting period - The Board did not declare an interim dividend for the six months ended June 30, 2024[64] - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[65] Corporate Governance The company maintained high corporate governance standards, complying with listing rules and having its interim results reviewed by the audit committee - The company complied with the provisions of the Corporate Governance Code in the Listing Rules of the Stock Exchange during the reporting period[62] - The company's Audit Committee has reviewed these interim results[66]