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银杏教育(01851) - 2024 - 中期财报
GINGKO EDUGINGKO EDU(HK:01851)2024-09-23 08:49

Management Discussion and Analysis Business Overview The Group is a higher education and vocational training service provider in Sichuan Province, China, primarily operating the Yinxing Hotel Management College and a vocational training school, with student enrollment and total revenue increasing during the reporting period - The Group is a higher education service provider in Sichuan Province, with Yinxing Hotel Management College enrolling approximately 20,728 students in the 2023/2024 academic year, an 8.3% increase from the previous academic year4 - In June 2024, a total of 5,397 students graduated from Yinxing College, achieving an employment rate of 78.4%3 Revenue Details for the Period Ended June 30 | Item | 2024 H1 (RMB Thousands) | 2023 H1 (RMB Thousands) | Growth Rate | | :--- | :--- | :--- | :--- | | Tuition Fees | 180,219 | 159,946 | 12.7% | | Accommodation Fees | 13,739 | 12,195 | 12.7% | | Catering Service Fees | 1,803 | 3,567 | (49.5%) | | Others | 6,329 | 8,567 | (26.1%) | | Total | 202,090 | 184,275 | 9.7% | Outlook and Strategy The Group is confident in its future, aiming to consolidate its market position in hotel management education through strategies like increasing market penetration, expanding overseas operations, attracting quality faculty, and diversifying training programs, with the Naxi new campus expansion expected to be operational by the 2024 academic year - The Naxi new campus expansion project, primarily including student dormitories and supporting facilities, is expected to be operational by the 2024 academic year8 - Future development strategies include: - Consolidating market position and enhancing teaching quality - Actively expanding overseas operations and strengthening international cooperation - Continuously attracting and retaining quality faculty - Developing diversified training programs to increase revenue streams7 Financial Review During the reporting period, the Group's revenue grew by 9.7% to RMB 202.1 million, driven by increased student enrollment and higher average tuition fees, with gross profit rising by 12.1% to RMB 130.5 million and profit for the period significantly increasing by 29.8% to RMB 106.7 million due to reduced finance costs Key Financial Indicators for H1 2024 | Indicator | 2024 H1 (RMB Millions) | 2023 H1 (RMB Millions) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 202.1 | 184.3 | +9.7% | | Gross Profit | 130.5 | 116.4 | +12.1% | | Gross Margin | 64.6% | 63.2% | +1.4pp | | Profit for the Period | 106.7 | 82.2 | +29.8% | - Revenue growth was primarily attributable to the increase in enrolled students and higher average tuition and accommodation fees in the 2023/2024 academic year9 - Net finance costs significantly decreased from RMB 10.9 million in the prior period to RMB 1.3 million, mainly due to reduced interest expenses on borrowings16 Financial Resources Review As of the end of the reporting period, the Group's cash and cash equivalents were RMB 74.4 million, a 65.5% decrease from the beginning of the period, with the gearing ratio increasing from 15.8% to 30.3%, and total borrowings amounting to approximately RMB 344.8 million, with capital commitments of RMB 33.8 million primarily related to the Naxi new campus expansion - As of June 30, 2024, cash and cash equivalents were approximately RMB 74.4 million, a 65.5% decrease from RMB 215.7 million at the end of 202319 - The gearing ratio (net debt/total equity) increased from 15.8% at the end of 2023 to 30.3% at the end of the reporting period19 - As of June 30, 2024, construction in progress, buildings, land use rights, and tuition and accommodation fee receivables were pledged to secure bank borrowings of RMB 304.8 million24 - Capital commitments amounted to approximately RMB 33.8 million, primarily related to the Naxi new campus expansion21 Employees and Remuneration Policy As of June 30, 2024, the Group had 1,088 employees, an increase from 960 at the end of 2023, offering competitive remuneration and benefits, participating in social insurance schemes, and maintaining good labor relations during the period - As of June 30, 2024, the Group had 1,088 employees, an increase of 128 from 960 as of December 31, 202325 Corporate Governance and Other Information Directors' and Chief Executive's Interests As of June 30, 2024, Mr. Fang Gongyu, Chairman of the Board, held 73.3% of the company's shares through controlled corporations, while Executive Director Mr. Tian Tao held 1.7% through controlled corporations Directors' Shareholding (as of June 30, 2024) | Director's Name | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Fang Gongyu | Interest in controlled corporation | 366,562,500 | 73.3% | | Mr. Tian Tao | Interest in controlled corporation | 8,437,500 | 1.7% | Major Shareholders' Interests Besides the directors, major shareholders include Vast Universe (wholly owned by Mr. Fang Gongyu, holding 73.3%) and his spouse Ms. Xiong Lan (deemed to have the same interest), as well as GreenTree Hospitality Group Ltd. (holding 8.3%) Major Shareholders' Shareholding (as of June 30, 2024) | Name | Capacity | Number of Shares (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Vast Universe | Beneficial owner | 366,562,500 | 73.3% | | Ms. Xiong Lan | Spouse's interest | 366,562,500 | 73.3% | | GreenTree Hospitality Group Ltd. | Beneficial owner | 41,336,000 | 8.3% | Corporate Governance Practices The company is committed to maintaining high standards of corporate governance, complying with most provisions of the Corporate Governance Code during the reporting period, with one deviation: the roles of Chairman and Chief Executive Officer are held by the same person (Mr. Fang Gongyu), which the Board believes provides strong and consistent leadership - The company deviated from Rule C.2.1 of the Corporate Governance Code regarding the separation of Chairman and Chief Executive Officer roles. Currently, both positions are held by Mr. Fang Gongyu, which the Board believes provides strong and consistent leadership35 Interim Dividend The Board resolved not to declare any interim dividend for the six months ended June 30, 2024 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 20243876 Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2024, the Group recorded revenue of RMB 202.1 million, a 9.7% year-on-year increase, with profit for the period at RMB 106.6 million, up 29.8% year-on-year, and basic and diluted earnings per share at RMB 0.21 Summary of H1 2024 Consolidated Statement of Comprehensive Income | Item (RMB Thousands) | 2024 H1 (Unaudited) | 2023 H1 (Unaudited) | | :--- | :--- | :--- | | Revenue | 202,090 | 184,275 | | Gross Profit | 130,465 | 116,409 | | Operating Profit | 108,424 | 93,492 | | Profit for the Period | 106,626 | 82,158 | | Basic and Diluted Earnings Per Share (RMB) | 0.21 | 0.16 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were RMB 1.367 billion, a decrease from the beginning of the period, with total liabilities at RMB 475.6 million, total equity at RMB 891.3 million, and net current liabilities amounting to approximately RMB 141 million Summary of Consolidated Statement of Financial Position | Item (RMB Thousands) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 1,278,987 | 1,234,870 | | Current assets | 87,961 | 224,528 | | Total assets | 1,366,948 | 1,459,398 | | Equity and Liabilities | | | | Total equity | 891,328 | 784,702 | | Non-current liabilities | 246,598 | 281,721 | | Current liabilities | 229,022 | 392,975 | | Total liabilities | 475,620 | 674,696 | Interim Condensed Consolidated Statement of Changes in Equity As of June 30, 2024, total equity attributable to owners of the company was RMB 891.3 million, with the increase primarily resulting from the RMB 106.6 million profit recorded during the reporting period - As of January 1, 2024, total equity was RMB 784.7 million. Profit and total comprehensive income for the period amounted to RMB 106.6 million, increasing total equity to RMB 891.3 million as of June 30, 202447 Interim Condensed Consolidated Statement of Cash Flows During the reporting period, net cash outflows were recorded from operating, investing, and financing activities, amounting to RMB 77.4 million, RMB 63.0 million, and RMB 1.0 million, respectively, resulting in a net decrease in cash and cash equivalents of RMB 141.3 million, with an ending balance of RMB 74.4 million Summary of H1 2024 Consolidated Statement of Cash Flows | Item (RMB Thousands) | 2024 H1 (Unaudited) | 2023 H1 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (77,360) | (64,882) | | Net cash used in investing activities | (62,985) | (50,762) | | Net cash used in financing activities | (979) | (38,474) | | Net decrease in cash and cash equivalents | (141,324) | (154,118) | | Cash and cash equivalents at end of period | 74,352 | 47,293 | Notes to the Interim Condensed Consolidated Financial Information Basis of Preparation and Accounting Policies This interim condensed consolidated financial information is prepared in accordance with HKAS 34 'Interim Financial Reporting' and is unaudited, with the Group having adopted new and revised standards effective for the reporting period, which had no significant impact on accounting policies - This interim financial information has been prepared in accordance with Hong Kong Accounting Standard ('HKAS') 34 'Interim Financial Reporting' and is unaudited49 - The Group has adopted several revised standards effective from January 1, 2024, which did not require changes in accounting policies or retrospective adjustments5152 Financial Risk Management The Group faces market risks (foreign exchange, interest rate), credit risk, and liquidity risk, but management believes there is no significant liquidity risk due to expected operating cash flows and ongoing bank support, with total contractual undiscounted cash flows for financial liabilities amounting to approximately RMB 472 million as of the reporting period end - The Group primarily faces market risks (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk, with no changes in risk management policies since year-end54 - Management believes there is no significant liquidity risk given expected operating cash flows and continuous bank support. New academic year tuition fee proceeds of RMB 320 million are expected by the end of September 202455 Revenue and Segment Information The Group primarily operates in a single segment of private higher education services in China, with total revenue of RMB 202.1 million during the reporting period, tuition fees being the largest component at RMB 180.2 million, and most revenue recognized over time, while catering service fees are recognized at a point in time - The Group's business is aggregated into a single reportable segment, which is the provision of private higher education services in China59 Revenue by Type and Recognition Timing (RMB Thousands) | Item | 2024 H1 | 2023 H1 | Recognition Method | | :--- | :--- | :--- | :--- | | Tuition Fees | 180,219 | 159,946 | Over time | | Accommodation Fees | 13,739 | 12,195 | Over time | | Others | 6,329 | 8,567 | Over time | | Catering Service Fees | 1,803 | 3,567 | At a point in time | | Total | 202,090 | 184,275 | | - Revenue recognized during the reporting period from contract liabilities balances included at the beginning of the year was RMB 197 million66 Property, Plant and Equipment As of June 30, 2024, the net book value of property, plant and equipment was RMB 1.211 billion, an increase from RMB 1.156 billion at the beginning of the period, with construction in progress having a net book value of RMB 284 million, primarily for buildings under construction in China Changes in Net Book Value of Property, Plant and Equipment (RMB Thousands) | Item | January 1, 2024 | Additions | Depreciation Expense | Net Book Value at Period End (June 30, 2024) | | :--- | :--- | :--- | :--- | :--- | | Buildings | 869,418 | 15,851 | (10,583) | 873,516 | | Construction in progress | 233,061 | 62,765 | – | 283,789 | | Total | 1,156,047 | 75,699 | (19,941) | 1,210,629 | - As of the end of the reporting period, construction in progress and buildings with a total book value of approximately RMB 210 million were pledged to secure bank borrowings84 Borrowings As of June 30, 2024, the Group's total borrowings were RMB 344.8 million, slightly higher than RMB 339.8 million at the beginning of the period, with RMB 110 million as current borrowings and RMB 234.8 million as non-current borrowings, and most borrowings being secured bank loans Borrowings Structure (RMB Thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current borrowings | 110,000 | 70,000 | | Non-current borrowings | 234,790 | 269,790 | | Total borrowings | 344,790 | 339,790 | - Long-term bank borrowings are secured by land use rights, construction in progress, buildings, and company guarantees91 - The weighted average effective interest rate for bank borrowings decreased from 5.06% at the end of 2023 to 3.40% as of June 30, 202492 Commitments and Related Party Transactions As of the end of the reporting period, the Group had capital commitments of RMB 33.8 million, primarily related to property, plant and equipment, with minor related party transactions for goods and services occurring with companies controlled by the controlling shareholder during the period - As of June 30, 2024, contracted but unprovided capital commitments amounted to approximately RMB 33.8 million, mainly related to property, plant and equipment95 - Total transactions with related parties (primarily companies controlled by the controlling shareholder) amounted to RMB 12 thousand during the reporting period, significantly lower than RMB 3.533 million in the prior year101