Business Overview - The company has established a strong reputation in the education services industry, focusing on extracurricular personal development courses for children and teenagers, including dance and sports [8]. - The company aims to provide high-quality, diversified comprehensive services to meet the personalized needs of different customer groups, leveraging its resources and experience [8]. - The company has set up consultation service centers in major cities in mainland China to offer overseas education consulting services for students seeking to study abroad [8]. - The company is focused on enriching service varieties and content through close communication with students, parents, and educational institutions [8]. - The group primarily engages in providing extracurricular personal quality courses and overseas education consulting services, as well as offering diversified consulting services to entities [68]. Market Development and Strategy - The company plans to enhance market development efforts while maintaining service quality for existing customers and actively seeking new business opportunities [8]. - The company plans to expand its overseas education consulting service centers through mergers, collaborations, and new establishments to cover a broader range of study abroad groups and families [18]. - The company aims to standardize and develop extracurricular personal quality courses in response to market trends and regulatory requirements [18]. Financial Performance - The total revenue for the fiscal year 2024 was approximately RMB 118.5 million, an increase of about 115.8% compared to RMB 54.9 million in fiscal year 2023 [20]. - Revenue from extracurricular courses increased by approximately 36.2% to about RMB 39.5 million, up from RMB 29.0 million in fiscal year 2023 [20]. - Revenue from overseas education services surged by approximately 178.9% to about RMB 44.9 million, compared to RMB 16.1 million in fiscal year 2023 [20]. - The gross profit for fiscal year 2024 was approximately RMB 33.9 million, a significant increase of about 276.7% from RMB 9.0 million in fiscal year 2023 [22]. - The gross profit margin for fiscal year 2024 was approximately 28.6%, compared to 16.4% in fiscal year 2023 [22]. - Other income for fiscal year 2024 was approximately RMB 12.6 million, an increase of about RMB 11.1 million from RMB 1.5 million in fiscal year 2023 [23]. - In the fiscal year 2024, the company recorded a loss of approximately RMB 33.6 million, a decrease of about 38.3% compared to a loss of approximately RMB 54.5 million in fiscal year 2023 [29]. - The basic and diluted loss per share for fiscal year 2024 was approximately RMB 3.23, compared to approximately RMB 6.49 in fiscal year 2023 [30]. Expenses and Liabilities - Sales and marketing expenses for fiscal year 2024 were approximately RMB 5.2 million, an increase of about 33.3% from RMB 3.9 million in fiscal year 2023 [25]. - Administrative expenses for fiscal year 2024 were approximately RMB 58.7 million, an increase of about 33.1% from RMB 44.1 million in fiscal year 2023 [26]. - As of December 31, 2024, the company's cash and bank balances were approximately RMB 52.0 million, a decrease of about 52.3% from approximately RMB 109.0 million as of December 31, 2023 [32]. - The company's current liabilities net amount was approximately RMB 40.9 million as of December 31, 2024, compared to a net current asset amount of approximately RMB 17.3 million as of December 31, 2023 [31]. - The capital expenditure for fiscal year 2024 was approximately RMB 19.1 million, slightly up from approximately RMB 18.8 million in fiscal year 2023 [38]. Shareholder and Capital Information - The total amount raised from the share issuance was HKD 250.0 million (approximately RMB 225.7 million), with a net amount of approximately HKD 204.0 million after deducting related expenses [77]. - Approximately 60.0% of the net proceeds will be used to expand after-school academic education services and self-operated teaching centers, particularly in Zhengzhou, China [78]. - About 30.0% of the net proceeds will be allocated to expand geographical reach and operational scale of after-school academic education services in China through strategic acquisitions or joint ventures [78]. - The largest customer accounted for approximately 9.9% of total revenue, while the top five customers represented about 24.3% of total revenue in the fiscal year 2024 [86]. - The largest supplier accounted for approximately 7.4% of total direct costs, with the top five suppliers making up about 22.5% of total direct costs in the fiscal year 2024 [87]. - The board does not recommend a final dividend for the fiscal year 2024, consistent with the previous fiscal year [83]. - The company has not conducted any share buybacks or repurchases of its listed securities during the fiscal year 2024 [82]. - The issued share capital as of December 31, 2024, was HKD 8,000,000, divided into 800,000,000 shares with a par value of HKD 0.01 each [90]. - As of December 31, 2024, the company's distributable reserves for shareholders amounted to approximately RMB 87.6 million, a decrease from RMB 157.0 million as of December 31, 2023 [93]. Corporate Governance - The board of directors includes independent non-executive directors who occupy more than one-third of the seats, promoting the overall interests of the group and its shareholders [170]. - The board consists of six directors, including three executive directors and three independent non-executive directors as of December 31, 2024 [196]. - The independent non-executive directors represent over one-third of the board, meeting the requirements of listing rules [198]. - The company has adopted a standard code of conduct for securities trading, confirmed by all directors for compliance throughout the fiscal year 2024 [191]. - The board has reviewed corporate governance practices and confirmed compliance with the corporate governance code, ensuring transparency and accountability [190]. - The company has arranged appropriate liability insurance for directors to cover legal liabilities arising from corporate activities, reviewed annually [195]. - The independent non-executive directors provide independent and objective opinions to safeguard the interests of shareholders and the company [198]. Compliance and Structural Contracts - The company has established structural contracts to comply with Chinese laws prohibiting foreign ownership in entities providing non-academic training services [151]. - The structural contracts allow the company to control affiliated entities and obtain economic benefits without holding equity [151]. - The company is committed to ensuring compliance with relevant Chinese laws and regulations through these contracts [151]. - The exclusive business cooperation agreement grants Daxian Yunxiao exclusive rights to provide necessary technical services, management support, and consulting services to affiliated entities [156]. - The exclusive technology service and management consulting agreement stipulates that affiliated entities will pay service fees equivalent to their operating profit after deducting all costs, expenses, taxes, and losses [157]. - The exclusive purchase rights agreement allows Daxian Yunxiao to acquire all or part of the equity interests of affiliated entities at the minimum price permitted by Chinese law [158]. - The equity pledge agreement ensures that shareholders unconditionally pledge their equity interests in Daxian Training to guarantee compliance with the agreements [159]. - The shareholder rights entrustment agreement allows Daxian Yunxiao to exercise all rights of shareholders in Daxian Training, subject to Chinese legal approval [160]. - The structural contracts carry risks, including potential invalidation if deemed non-compliant with Chinese laws, which could lead to significant consequences for the group [164]. - The group may face challenges in meeting qualification requirements if foreign ownership restrictions are lifted, impacting the ability to acquire interests in affiliated entities [165]. - The effectiveness of the structural contracts in providing operational control may not match that of direct ownership, posing risks if affiliated entities fail to fulfill their obligations [165]. - The group may incur substantial costs when exercising options to acquire equity interests in affiliated entities under the structural contracts [165]. - The structural contracts may be subject to scrutiny by Chinese tax authorities, potentially leading to significant reductions in consolidated net income and investment value if additional taxes are assessed [165]. - The company has implemented measures to ensure compliance with structural contracts, with no violations reported as of the report date [169]. - The company will disclose the overall performance and compliance status of structural contracts in its annual report to provide updated information to shareholders and potential investors [169]. - The company has committed to exercising exclusive purchase rights to hold all interests in the consolidated affiliated entities if the regulatory environment in China changes, allowing foreign investors to directly hold all interests [168]. - The company will review the implementation of structural contracts at least annually and report any significant issues to the board for discussion [169]. - The company may appoint external legal or professional advisors to assist the board in reviewing the implementation of structural contracts and addressing specific issues arising from them [169]. Audit and Financial Reporting - The new auditor, Zhonghui Anda, has been appointed effective May 25, 2023, following the resignation of Deloitte, and has audited the consolidated financial statements for the fiscal year 2024 [186]. - The company will continue to disclose details regarding structural contracts and ensure that transactions are conducted on fair and reasonable terms, aligning with shareholder interests [182]. - The company plans to publish its annual report for the fiscal year 2024 on the Stock Exchange and its website, ensuring accessibility for shareholders [187].
大山教育(09986) - 2024 - 年度财报