Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 216,144,000, representing a 96.0% increase from RMB 110,284,000 in the same period of 2020[8]. - The profit before tax for the same period was RMB 22,590,000, compared to a loss of RMB 9,094,000 in 2020, marking a significant turnaround of 348.4%[8]. - Basic earnings per share for the six months ended June 30, 2021, was RMB 2.41, a significant increase from a loss of RMB 1.73 in the same period of 2020, reflecting a 239.3% improvement[8]. - The company recorded a profit of approximately RMB 18.7 million for the six months ended June 30, 2021, compared to a loss of approximately RMB 9.8 million for the same period in 2020[24]. - Gross profit increased by approximately RMB 63.7 million or 331.4% to approximately RMB 82.9 million for the six months ended June 30, 2021, with a gross margin rising from 17.4% to 38.4%[15]. - Total revenue for the six months ended June 30, 2021, was approximately RMB 216.1 million, an increase of approximately RMB 105.9 million or 96.0% compared to RMB 110.3 million for the same period in 2020[12]. - The company achieved a profit before tax of RMB 33,722,000 for the six months ended June 30, 2021, compared to a loss of RMB 17,465,000 in the prior year, indicating a turnaround in profitability[95]. - For the six months ended June 30, 2021, the company reported a profit of RMB 18,665,000 compared to a loss of RMB 9,834,000 for the same period in 2020, marking a significant turnaround[113]. Student Enrollment and Tutoring Services - Total student enrollments for regular, boutique, and VIP classes reached 179,389, with total tutoring hours provided being 3,079,427, 53,671, and 345,728 respectively[9]. - Total tutoring revenue for the six months ended June 30, 2021, was RMB 200.0 million, compared to RMB 102.6 million for the same period in 2020, reflecting a significant increase in student enrollments and tutoring hours[13]. - The number of tutoring sessions increased significantly, with a total of 3,478,826 hours for the six months ended June 30, 2021, compared to 1,832,627 hours for the same period in 2020[13]. Business Strategy and Regulatory Environment - The company plans to strategically close several self-operated teaching centers and integrate affected resources into nearby centers in response to new regulatory challenges[10]. - The company is adapting to new government regulations affecting the after-school tutoring industry, which poses unprecedented challenges to its existing business[10]. - The company is reviewing its business strategy and resource allocation to ensure sustainability in the new regulatory environment[11]. - The company believes that expanding its business will provide opportunities to broaden its service offerings and capture more market demand[11]. - The company aims to diversify its business portfolio to include four new types of tutoring services, targeting high school students, children, and adults[10]. Expenses and Financial Management - Sales and marketing expenses rose by approximately RMB 1.8 million or 44.3% to RMB 5.8 million for the six months ended June 30, 2021, primarily due to increased advertising and marketing expenditures[18]. - Administrative expenses increased by approximately RMB 17.5 million or 95.3% to RMB 35.8 million for the six months ended June 30, 2021, mainly due to higher employee costs and legal and professional fees[20]. - Employee costs increased due to the absence of classroom suspensions in the reporting period, leading to higher tutoring hours and teaching hours compared to the previous year[14]. - The company reported a current tax expense of RMB 3,803,000 for the six months ended June 30, 2021, compared to RMB 799,000 in the same period of 2020, indicating a substantial increase of 376.5%[108]. Assets and Liabilities - Total assets as of June 30, 2021, were RMB 487,961 thousand, slightly down from RMB 444,950 thousand at the end of 2020[84]. - Current liabilities increased to RMB 306,102 thousand from RMB 259,391 thousand at the end of 2020, primarily due to an increase in advance payments[84]. - The company's cash and bank balances as of June 30, 2021, were approximately RMB 262.8 million, a decrease of about 12.3% from RMB 299.7 million as of December 31, 2020[36]. - The company's net current assets as of June 30, 2021, were approximately RMB 181.9 million, down about 2.0% from RMB 185.6 million as of December 31, 2020[36]. - Deferred revenue increased by approximately RMB 40.1 million or about 20.8% to RMB 232.8 million as of June 30, 2021, driven by an increase in enrollment at self-operated teaching centers[34]. Share Capital and Governance - The company has a total of 800,000,000 shares issued, with major shareholders holding significant stakes: 瑞天国际 holds 62.01% (496,060,800 shares) and 百泰 holds 9.05% (72,360,000 shares)[69]. - The company has adopted a share incentive plan on December 14, 2020, granting a total of 30,000,000 reward shares to 56 employees, including four directors, at a zero reward price[72]. - The board structure includes three executive directors, one non-executive director, and four independent non-executive directors, ensuring a high level of independence[54]. - The company has established an audit committee to oversee financial reporting, risk management, and internal controls, composed entirely of independent non-executive directors[56]. - The company did not declare an interim dividend for the six months ended June 30, 2021, consistent with the previous year[58]. Future Plans and Investments - The company plans to allocate approximately 60.0% of the net proceeds from its IPO, amounting to about HKD 122.4 million, to expand its business and self-operated teaching center network[44]. - Approximately 30.0% of the net proceeds, amounting to about HKD 61.2 million, will be used to expand geographical presence and operational scale through strategic acquisitions of quality after-school education service companies in China[44]. - The company is exploring opportunities to expand its business to include preparatory courses for high school entrance exams and vocational education[157]. - The company is seeking opportunities through its wholly-owned subsidiary in Hong Kong to establish a private learning center, with an expected approval process of approximately six to seven months[78]. Financial Instruments and Valuation - The company has designated the convertible bonds as financial liabilities measured at fair value through profit or loss[138]. - The fair value of the convertible bonds was RMB 49,810,000 as of December 31, 2019, based on an independent valuation[139]. - The fair value of the convertible bonds decreased to RMB 35,639,000 by June 30, 2020, reflecting a loss of RMB 14,171,000[139]. - The company’s management believes that the carrying amounts of financial assets and liabilities approximate their fair values[149].
大山教育(09986) - 2021 - 中期财报