民生教育(01569) - 2024 - 中期财报

Corporate Information This section provides fundamental details about the company's identity and registration Management Discussion and Analysis This section provides a comprehensive review of the group's operational performance, financial results, and strategic outlook for the reporting period Business Review of the Reporting Period The Group, a leading 'Internet+' vocational education provider, saw campus education as its core with 100,000 students and progress in for-profit registration, while expanding other services to over 50 million users - The Group has established an integrated vocational education service system covering 'recruitment-assessment-teaching-practical training-examination-employment', with eight business segments including campus education, online education, and human resource services[5][7] - Substantial progress has been made in the for-profit classification registration of campus education, with Yunnan University Dianchi College approved to be re-designated as a for-profit school, commencing enrollment under this designation in the 2024-2025 academic year[12][14] Business Segment Key Data (As of June 30, 2024) | Business Segment | Key Data (As of June 30, 2024) | | :--- | :--- | | Campus Education | 10 schools, approximately 100,000 enrolled students | | Online Education | Approximately 350 partner institutions, serving about 630,000 students; MBAChina platform accumulated approximately 3.4 million registered users | | Vocational Skills Enhancement | Approximately 9 million cumulative teacher trainings; MOOC platform accumulated approximately 25 million users | | Human Resources Services | Approximately 900 partner HR agencies, 38,000 employers, connecting approximately 4.7 million C-end users | | Education Informatization | UMOOC platform partnered with over 400 institutions, serving over 13 million students | | Examination and Assessment Services | HSK online exams served over 180,000 cumulative candidates | Future Outlook The Group's future strategy focuses on high-quality higher education development and building a digital service ecosystem covering learning, employment, and entrepreneurship, aligned with national policy support - The Group's development strategy aligns with national policy directions, including 'significantly improving the quality of vocational education' from the 2024 Government Work Report and 'accelerating the construction of an industry-education integration vocational education system' proposed by the Third Plenary Session of the 20th Central Committee[41] - Future core strategies include: - High-Quality Development: Continuously investing resources, optimizing teaching environment and faculty, and cultivating high-quality applied vocational talents - Digital and Intelligent Ecosystem: Comprehensively promoting the digitalization and intelligence of learning, employment, and entrepreneurship services, providing full-chain digital services for various schools and institutions[42][44] Financial Review of the Reporting Period The Group's H1 2024 financial performance significantly declined, with total revenue down 10.7% due to reduced online education, leading to a 19.9% drop in gross profit and a 63.1% decrease in profit for the period Financial Indicators (RMB million) | Financial Indicator (RMB million) | H1 2024 | H1 2023 | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,079.8 | 1,209.0 | -10.7% | Reduced revenue due to cessation of online education enrollment | | Cost of Sales | 498.9 | 483.9 | +3.1% | Increase in staff salaries and allowances | | Gross Profit | 580.8 | 725.1 | -19.9% | Increased campus education expenses and decreased revenue | | Gross Margin | 53.8% | 60.0% | -6.2pp | - | | Selling and Distribution Expenses | 98.0 | 117.1 | -16.3% | Decrease in sales and marketing staff remuneration and promotion costs | | Finance Costs | 68.4 | 100.5 | -31.9% | Derecognition of interest on put option liability from acquisition of Lead Group | | Income Tax Expense | 72.8 | 30.2 | +141.1% | Provision for income tax for Group schools | | Profit for the Period | 113.2 | 306.5 | -63.1% | Decreased revenue and increased costs and expenses | | Adjusted Net Profit | 131.5 | 364.8 | -63.9% | Decline in operating performance | Financial and Liquidity Position The Group's liquidity tightened due to reduced cash and contract liabilities, with total interest-bearing borrowings at RMB 2.29 billion and a healthy gearing ratio of 38.0%, while facing a significant contingent liability from a put option dispute - As of June 30, 2024, current assets decreased to RMB 3.67 billion (end of 2023: RMB 4.31 billion), and current liabilities decreased to RMB 3.19 billion (end of 2023: RMB 3.78 billion), primarily due to a reduction in cash and cash equivalents and contract liabilities[53] - The gearing ratio (total interest-bearing borrowings/total equity) increased from 35.9% at the end of 2023 to 38.0%, remaining at a healthy level[61] - The Group is in an arbitration dispute with the seller of Lead Group regarding a put option for a 49% equity stake. The seller claims an exit price of approximately RMB 2.18 billion, which the company disputes. The put option liability has been derecognized, and no provision has been made for this arbitration[54][55] Other Information This section provides additional disclosures on shareholding, employee information, corporate governance, and significant events Shareholding Structure As of June 30, 2024, Mr. Li Xuechun is the ultimate controlling shareholder with 71.71% stake, while Huachang International Limited holds 7.87% Shareholding Details | Shareholder Name | Capacity | Number of Shares | Shareholding Percentage | | :--- | :--- | :--- | :--- | | Mr. Li Xuechun | Controlling Shareholder (through controlled corporations) | 3,024,604,000 | 71.71% | | Huachang International Limited and parties acting in concert | Major Shareholder | 332,000,000 | 7.87% | Share Option Scheme As of June 30, 2024, the company had 57,250,000 unexercised share options, with no changes in grants, exercises, cancellations, or lapses during the period - As of the end of the reporting period, 57,250,000 share options remained unexercised, with no changes to the share option scheme during the period[70][73] Corporate Governance and Other Disclosures As of the reporting period end, the Group had approximately 6,900 employees, with no interim dividend recommended, and confirmed compliance with corporate governance codes - As of June 30, 2024, the Group had approximately 6,900 employees in mainland China and Hong Kong[73] - The Board did not recommend the payment of any dividend for the six months ended June 30, 2024[76][81] - The company confirmed compliance with the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers under the Listing Rules during the reporting period[77][78][82][83] Material Acquisitions, Litigation, and Covenants Two material acquisitions remain uncompleted, the company faces significant litigation regarding the Lead Group acquisition, and loan agreements include covenants requiring the controlling shareholder to maintain at least a 51% stake - The acquisitions of a 51% equity stake in Qufu Changyong Enterprise Management Consulting Co., Ltd. and a 51% equity stake in Nanchang Hezhitong Education Consulting Co., Ltd. remain uncompleted as of the date of this interim report[86][91][94][93] - Loan agreements with institutions including International Finance Corporation (IFC), Bank of China Macau Branch, and Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) all contain specific performance covenants requiring controlling shareholder Mr. Li Xuechun to directly or indirectly hold not less than a 51% equity stake in the company[102][106][109] Interim Condensed Consolidated Financial Statements and Notes This section presents the interim condensed consolidated financial statements and their accompanying notes, detailing the Group's financial position and performance Financial Statements Overview The financial statements reflect a challenging period with significant declines in revenue and profit, reduced cash reserves, negative operating cash flow, and continued investment in property and equipment Income Statement Items (RMB thousand) | Income Statement Items (RMB thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 1,079,786 | 1,209,022 | | Gross Profit | 580,838 | 725,077 | | Profit Before Tax | 185,932 | 336,722 | | Profit for the Period | 113,165 | 306,545 | | Profit Attributable to Owners of the Parent | 104,802 | 292,608 | | Basic Earnings Per Share (RMB) | 0.0248 | 0.0694 | Balance Sheet Items (RMB thousand) | Balance Sheet Items (RMB thousand) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Non-Current Assets | 7,110,772 | 7,053,903 | | Total Current Assets | 3,667,795 | 4,312,665 | | Total Current Liabilities | 3,188,231 | 3,775,242 | | Total Non-Current Liabilities | 1,571,415 | 1,640,187 | | Net Assets | 6,018,921 | 5,951,139 | | Total Equity | 6,018,921 | 5,951,139 | Cash Flow Statement Items (RMB thousand) | Cash Flow Statement Items (RMB thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (779,026) | (245,053) | | Net Cash Used in Investing Activities | (190,407) | (98,644) | | Net Cash Used in Financing Activities | (20,737) | (130,468) | | Net Decrease in Cash and Cash Equivalents | (990,170) | (474,165) | | Cash and Cash Equivalents at End of Period | 2,194,356 | 3,015,307 | Key Notes to Financial Statements Notes to financial statements detail that revenue decline stemmed from online education, while campus education grew, with income tax provisions for for-profit registration, increased trade receivables, decreased contract liabilities, and total borrowings of RMB 2.29 billion - Due to ongoing for-profit classification registration for the Group's schools operating in mainland China, the Group has made a 25% PRC corporate income tax provision on service fees collected for its academic education services[152] - As of June 30, 2024, total interest-bearing bank and other borrowings amounted to RMB 2.286 billion, of which RMB 1.309 billion were current liabilities[170] Segment Revenue (RMB thousand) | Segment Revenue (RMB thousand) | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Campus Education | 752,217 | 741,142 | +1.5% | | Online Education | 327,569 | 467,880 | -30.0% | | Total | 1,079,786 | 1,209,022 | -10.7% | Major Revenue Sources (RMB thousand) | Major Revenue Sources (RMB thousand) | H1 2024 | H1 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% |