民生教育(01569) - 2025 - 中期财报

Corporate Information Board of Directors The Board of Directors includes executive, non-executive, and independent non-executive directors, and committee leadership - Board members include Mr. Li Xuechun (Chairman), Ms. Zhang Weiping (Vice Chairman), Mr. Zuo Yichen, Mr. Lin Yilong (Executive Directors), Mr. Liang Xingchao, Ms. Li Yanping (Non-executive Directors), and Mr. Chen Yisheng, Mr. Yu Huangcheng, Mr. Wang Weihong (Independent Non-executive Directors)[5][6] - Mr. Chen Yisheng chairs the Audit Committee, Mr. Wang Weihong chairs the Remuneration Committee, and Mr. Yu Huangcheng chairs the Nomination Committee[5][6] Company Information Details This section provides essential company information, including legal counsel, auditor, registered office, principal places of business, share registrar, and stock code - The company's legal counsel is Morgan Lewis & Bockius (Hong Kong Law), and its auditor is Ernst & Young[7] - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in mainland China located in Beijing, and its principal place of business in Hong Kong SAR located in Admiralty[7][8] - The Hong Kong share registrar is Hong Kong Registrars Limited, the principal bankers are Industrial and Commercial Bank of China Chongqing Heyang Branch, and the stock code is 1569[9] Management Discussion and Analysis Business Review The Group, a leading "Internet+" vocational education provider, offers integrated services across eight business segments, operating 10 schools with approximately 100,000 students - The Group has established eight major business segments, including campus education, online education services, vocational skills enhancement and training, human resources services, digital industry-education integration services, education informatization services, examination and assessment services, and international education services[10][12] Group Operating Scale as of June 30, 2025 | Indicator | Quantity | | :--- | :--- | | Number of operated/managed schools | 10 schools (7 higher education institutions, 2 secondary vocational schools, 1 high school) | | Total enrolled students | Approximately 100,000 people | | Full-time undergraduate students | Approximately 61,000 people | | Number of learning centers | Over 1,900 (covering 31 provinces, municipalities, and autonomous regions nationwide) | | Partner institutions | Over 1,500 | | Human resources companies | Approximately 950 companies | | Employers | Approximately 44,000 companies | | Linked C-end users | Approximately 3.3 million people | | Job demands | Approximately 4.1 million positions | | Total scale of students and users served | Accumulated over 50 million | - During the reporting period, the company signed a revolving loan facility letter with CITIC Bank International Limited for up to RMB 300 million[13][17] - The Group's institutions' enrollment plan for the 2025/2026 academic year increased significantly by approximately 24.0%, with undergraduate program enrollment increasing by approximately 29.0%[15][17] Future Outlook Supported by government policies, the Group will continue to advance high-quality higher education, optimize teaching environments and faculty, and build a digital "learning, employment, entrepreneurship" service platform ecosystem, accelerating the application of big data and AI in its operations to empower talent cultivation - The government has allocated RMB 31.257 billion to support the modern vocational education quality improvement plan, promoting the modernization and high-quality development of vocational education[16][18] - The Group will continue to increase resource investment, optimize teaching environments and equipment, strengthen its professional teaching team, provide high-quality teaching services, and promote high-quality student employment[19][21] - The Group will comprehensively advance the digitalization and intelligence of learning, employment, and entrepreneurship services, covering the entire chain from enrollment, assessment, teaching, examination, practical training, employment, to entrepreneurship[20][22] - The Group will accelerate the widespread application of cutting-edge technologies such as big data and artificial intelligence in its business areas to empower education and talent development[23][25] Financial Review Total revenue decreased by 17.1% due to reduced online education, leading to a significant decline in profit for the period and adjusted net profit Key Financial Indicators Changes (Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 894.8 | 1,079.8 | -17.1% | Decrease in online education revenue | | Cost of sales | 539.4 | 498.9 | +8.1% | Increase in depreciation, amortization, and staff costs | | Gross profit | 355.4 | 580.8 | -38.8% | Increase in campus education expenses | | Gross profit margin | 39.7% | 53.8% | -14.1% | Increase in campus education expenses | | Other income and gains | 55.8 | 71.5 | -22.1% | Decrease in short-term investment income | | Selling expenses | 54.3 | 98.0 | -44.6% | Decrease in sales and marketing staff salaries and promotion costs | | Administrative expenses | 196.2 | 240.3 | -18.4% | Effective control of administrative expenses | | Other expenses, net | 22.3 | 59.7 | -62.6% | Significant decrease in impairment losses on financial assets | | Finance costs | 67.4 | 68.4 | -1.5% | Remained stable | | Profit for the period | 49.4 | 113.2 | -56.4% | Comprehensive impact of the above factors | | Adjusted net profit | 57.1 | 131.5 | -56.6% | Comprehensive impact of the above factors | | Adjusted net profit margin | 6.4% | 12.2% | -5.8% | Comprehensive impact of the above factors | Financial and Liquidity Position Net current assets increased, but total current assets decreased due to lower cash; interest-bearing borrowings rose, increasing the gearing ratio to 42.3%, while contingent liabilities and arbitration remain Current Assets and Liabilities (As of June 30, 2025) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net current assets | 903.9 | 758.5 | +19.2% | | Total current assets | 3,733.8 | 4,222.3 | -11.5% | | Total current liabilities | 2,829.9 | 3,463.8 | -18.3% | Interest-Bearing Financial Institution Loans and Other Borrowings (As of June 30, 2025) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total | 2,535.9 | 2,198.3 | +15.4% | | Interest rate range | 2.2% - 24.0% | 2.2% - 24.0% | - | - The Group is in dispute with Lead Group regarding a put option for 49% equity, with the seller claiming an inflated exercise price, while Minsheng Vocational Education believes the exercise is invalid and it has no obligation to purchase[62][63][64] - Arbitration is ongoing, and the Group has made no provision for this[62][63][64] - The Group provided a RMB 400 million loan to Lead Guojiao Education Technology (Beijing) Co., Ltd., secured by 49% of Lead Group's shares[65][66][67][68] - The seller claims the loan obligation has been offset, but the Group believes the outstanding principal and interest, and the pledge, remain in effect, with related arbitration ongoing[65][66][67][68] Pledged Assets (As of June 30, 2025) | Type of Pledged Asset | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Net long-term assets | 78.3 | 79.2 | | Time deposits | 897.6 | 551.3 | - The Group's majority of revenue and expenses are denominated in RMB, with some bank balances denominated in USD and HKD[70][74] - The Group currently has no foreign exchange hedging policy, but management continuously monitors foreign currency exchange risk[70][74] Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing ratio | 42.3% | 37.0% | Other Information Directors' and Chief Executive's Interests and Short Positions in Share, Underlying Shares and Debentures Directors and key executives hold long positions in company shares, with Chairman Li Xuechun holding 71.71% through controlled entities Directors' Long Positions in Company Shares (As of June 30, 2025) | Director Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Equity | | :--- | :--- | :--- | :--- | | Mr. Li Xuechun | Interest in controlled corporation | 3,024,604,000 | 71.71% | | Ms. Zhang Weiping | Beneficial owner | 20,000,000 | 0.47% | | Mr. Zuo Yichen | Beneficial owner | 5,400,000 | 0.13% | | Mr. Lin Yilong | Beneficial owner | 5,400,000 | 0.13% | | Ms. Li Yanping | Beneficial owner | 800,000 | 0.02% | - Save as disclosed above, as of June 30, 2025, no chief executive or any director of the company had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations[81][83] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares Minsheng Group is the largest shareholder with 71.71% equity, while Huachang International and its affiliates hold 7.87% Substantial Shareholders' Long Positions in Company Shares (As of June 30, 2025) | Shareholder Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Equity | | :--- | :--- | :--- | :--- | | Minsheng Group | Beneficial owner | 3,024,604,000 | 71.71% | | Huachang International Limited | Beneficial owner | 332,000,000 | 7.87% | | Huaqin Development Limited | Interest in controlled corporation | 332,000,000 | 7.87% | | OCT (Asia) Holdings Limited | Interest in controlled corporation | 332,000,000 | 7.87% | | Pacific Climax Limited | Interest in controlled corporation | 332,000,000 | 7.87% | | Hong Kong OCT Limited | Interest in controlled corporation | 332,000,000 | 7.87% | | Shenzhen OCT Co., Ltd. | Interest in controlled corporation | 332,000,000 | 7.87% | | OCT Group Co., Ltd. | Interest in controlled corporation | 332,000,000 | 7.87% | - Huachang International Limited is wholly owned by Huaqin Development Limited, which is ultimately traceable to OCT Group Co., Ltd., thus these companies are deemed to have an interest in the shares held by Huachang International Limited[86][89] Share Option Scheme The share option scheme, adopted in 2017, has 44,700,000 unexercised options, with no grants, exercises, cancellations, or lapses during the period Share Option Details (As of June 30, 2025) | Participant Category and Name | Date of Grant | Exercise Price (HKD) | Unexercised as of January 1, 2025 | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Zhang Weiping | 31/8/2017 | 1.39 | 12,000,000 | 12,000,000 | | Zhang Weiping | 27/8/2018 | 1.66 | 8,000,000 | 8,000,000 | | Zuo Yichen | 31/8/2017 | 1.39 | 3,000,000 | 3,000,000 | | Zuo Yichen | 27/8/2018 | 1.66 | 2,400,000 | 2,400,000 | | Lin Yilong | 31/8/2017 | 1.39 | 3,000,000 | 3,000,000 | | Lin Yilong | 27/8/2018 | 1.66 | 2,400,000 | 2,400,000 | | Li Yanping | 27/8/2018 | 1.66 | 800,000 | 800,000 | | Other employees | 31/8/2017 | 1.39 | 3,000,000 | 3,000,000 | | Other employees | 27/8/2018 | 1.66 | 8,300,000 | 8,300,000 | | Other employees | 19/8/2019 | 1.42 | 700,000 | 700,000 | | Other employees | 21/8/2020 | 1.22 | 1,100,000 | 1,100,000 | | Total | | | 44,700,000 | 44,700,000 | - As of June 30, 2025, the number of remaining shares available for issue under the share option scheme was 400,000,000 shares, representing approximately 9.48% of the company's total issued shares[98][102] - During the reporting period, no share options were granted, exercised, cancelled, or lapsed[96][99][102][103] Employee and Remuneration Policies The Group employs approximately 6,800 staff, with remuneration based on performance and market rates, offering comprehensive benefits and training programs - As of June 30, 2025, the Group employed approximately 6,800 staff in mainland China and Hong Kong SAR, a slight increase from 6,700 as of December 31, 2024[100][104] - The Group provides comprehensive training programs for its employees and participates in various employee social security schemes managed by local governments[101][104][105][112] - The Remuneration Committee is responsible for reviewing the remuneration policies and structure for directors and senior management, considering operating results, individual performance, and market practices[106][112] Compliance and Governance The company complied with relevant laws, corporate governance codes, and director securities trading standards, with no interim dividend recommended - During the reporting period and up to the date of this interim report, the Group has complied with relevant laws and regulations that have a material impact on the company[108][113] - The Board does not recommend the payment of any dividend for the six months ended June 30, 2025[109][114] - The company has complied with all code provisions set out in the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period[110][115] - All directors have confirmed compliance with the Model Code set out in Appendix C3 of the Listing Rules throughout the reporting period[111][116][117][121] - The Board's Audit Committee, together with management, has reviewed the accounting standards and policies adopted by the Group, as well as the unaudited interim condensed consolidated financial statements[119][123] Acquisition in Progress During the Reporting Period Two significant acquisitions, Qufu Changyong and Nanchang Hezhitong (both 51% equity), remain in progress and are not yet completed - Chongqing Yuecheng signed a share transfer agreement on November 23, 2018, to acquire 51% equity in Qufu Changyong Enterprise Management Consulting Co., Ltd. for RMB 91.8 million, thereby indirectly holding 51% of the school sponsor's rights in Qufu Yuandong Vocational Technical College[125][126][127][128][129] - This acquisition has not yet been completed[125][126][127][128][129] - Chongqing Yiersheng signed an equity transfer agreement on March 15, 2019, to conditionally acquire 51% equity in Nanchang Hezhitong Education Consulting Co., Ltd. for RMB 510 million, thereby indirectly holding 51% of the school sponsor's rights in Nanchang Vocational University[130][131][134][135] - This acquisition has not yet been completed[130][131][134][135] Litigation and Arbitration This section refers to the put option dispute over 49% equity in Lead Group and arbitration regarding a loan to Lead Guojiao Education Technology (Beijing) Co., Ltd - For further details on litigation and arbitration, please refer to the "Contingent Liabilities" sub-section under the "Management Discussion and Analysis" section in this interim report[132][136] - No significant events affecting the company or any of its subsidiaries occurred after the reporting period and up to the date of this interim report[132][136] Purchase, Sale or Redemption of Listed Securities of the Company Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, with zero treasury shares held - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities (including sales of treasury shares)[133][137] - As of June 30, 2025, the number of treasury shares held by the company was zero[133][137] Significant Investments Held and Future Plans for Material Investments or Acquiring Capital Assets The Group held equity investments at fair value through profit or loss, with no other material investment or capital asset acquisition plans disclosed - The Group held equity investments at fair value through profit or loss for the six months ended June 30, 2025[138][141] - Save as disclosed in this interim report, as of June 30, 2025, the Group had no plans for material investments or acquiring capital assets[138][141] Material Acquisitions and Disposals No material acquisitions or disposals of subsidiaries, associates, or joint ventures occurred during the period, other than those disclosed - Save as disclosed in this interim report, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period[139][142] Loan Agreements with Covenant Relating to Specific Performance of the Controlling Shareholders Loan agreements with financial institutions include covenants requiring controlling shareholders to maintain their stake, with breaches constituting default events - Loan agreements with International Finance Corporation, Bank of China Macau Branch, DEG, and BEA Beijing Branch all require the ultimate controlling shareholder, Mr. Li Xuechun and/or Minsheng Group, to maintain not less than 51% legal and beneficial ownership or the status of the single largest shareholder and actual control of the company[145][148][152][156][158][162][165][168] - A breach of any specific performance covenant will constitute an event of default under the loan agreements, entitling the lenders to demand repayment of all or part of the loans[149][153][159][163] - As of the date of this report, Minsheng Group holds approximately 71.71% of the company's issued shares[168][169] Loan from International Finance Corporation Loan agreements with IFC, totaling up to RMB 400 million and USD 51 million, require controlling shareholders to maintain at least 51% ownership - Chongqing Minsheng signed an RMB loan agreement with International Finance Corporation, initially for a total of up to RMB 750 million, later adjusted to RMB 400 million[140][143][144][147] - Minsheng Education signed a USD loan agreement with International Finance Corporation for a total of up to USD 51 million, equivalent to RMB 350 million[144][147] - The loan term is 8 years, with repayment in 11 equal installments starting from June 15, 2023[143][147] Loan from Bank of China Limited Macau Branch A USD 44.8 million term loan from Bank of China Macau requires Mr. Li Xuechun to maintain at least 51% of the company's issued share capital - The company signed a facility agreement with Bank of China Macau Branch for a term loan facility of up to USD 44.8 million, with a loan term of 5 years[151][156] - The loan will be used for the Group's mergers and acquisitions and general working capital purposes[151][156] - The agreement requires Mr. Li Xuechun to maintain direct or indirect ownership of not less than 51% of the company's issued share capital[152][156] Loan from DEG A USD 28.24 million loan from DEG, due by June 15, 2028, mandates Mr. Li Xuechun and Minsheng Group to retain at least 51% control - Minsheng Education signed a loan agreement with DEG for a total of up to USD 28.24 million, with the latest repayment date being June 15, 2028[155][157] - The loan began repayment in 11 semi-annual installments on June 15, 2023, for the Group's business expansion and daily operations[155][157] - The agreement requires Mr. Li Xuechun and Minsheng Group to each maintain legal and beneficial ownership of not less than 51% of Minsheng Group's shares, and Minsheng Group to maintain legal and beneficial ownership of not less than 51% of the company's shares[158][162] Loan from BEA Beijing Branch A USD 15.12 million loan from BEA Beijing requires Mr. Li Xuechun to remain the single largest shareholder and maintain actual control - The company signed a loan contract with BEA (China) Limited Beijing Branch for a total of USD 15.12 million[160][165] - The loan will be repaid according to the repayment schedule, with the final repayment date being three years from the date of the first drawdown[160][165] - The agreement requires Mr. Li Xuechun to maintain his status as the single largest shareholder and actual control of the company[161][165] Loan from CITIC Bank International A RMB 300 million revolving loan from CITIC Bank International requires Mr. Li Xuechun to maintain at least 51% controlling interest - The company signed a facility letter with CITIC Bank International for a revolving loan facility of up to RMB 300 million or its equivalent in foreign currency[167][169] - The final repayment date for the loan is no more than one year from the date of the first drawdown[167][169] - The agreement requires Mr. Li Xuechun to maintain a controlling interest of not less than 51% in the company[168][169] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss Summary Revenue decreased by 17.1% to RMB 894.8 million, with profit for the period falling 56.4% to RMB 49.4 million, resulting in a loss attributable to parent owners Key Profit or Loss Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 894,786 | 1,079,786 | -17.1% | | Cost of sales | (539,374) | (498,948) | +8.1% | | Gross profit | 355,412 | 580,838 | -38.8% | | Other income and gains | 55,762 | 71,543 | -22.1% | | Selling expenses | (54,297) | (98,046) | -44.6% | | Administrative expenses | (196,236) | (240,309) | -18.4% | | Other expenses, net | (22,332) | (59,675) | -62.6% | | Finance costs | (67,351) | (68,419) | -1.5% | | Profit before tax | 70,958 | 185,932 | -61.8% | | Income tax expense | (21,597) | (72,767) | -70.3% | | Profit for the period | 49,361 | 113,165 | -56.4% | Profit for the Period Attributable (Six Months Ended June 30) | Attributable to | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Owners of the parent | (4,075) | 104,802 | | Non-controlling interests | 53,436 | 8,363 | | Total | 49,361 | 113,165 | (Loss)/Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic and diluted (loss)/earnings per share | RMB(0.0010) | RMB0.0248 | Interim Condensed Consolidated Statement of Financial Position Financial Position Summary Total assets less current liabilities were RMB 7,880.8 million, with net assets at RMB 5,992.2 million, reflecting decreases in current assets and liabilities Key Balance Sheet Data (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total non-current assets | 6,976,905 | 7,033,089 | | Total current assets | 3,733,808 | 4,222,337 | | Total current liabilities | 2,829,903 | 3,463,788 | | Net current assets | 903,905 | 758,549 | | Total assets less current liabilities | 7,880,810 | 7,791,638 | | Total non-current liabilities | 1,888,630 | 1,853,646 | | Net assets | 5,992,180 | 5,937,992 | | Total equity | 5,992,180 | 5,937,992 | - The decrease in current assets was primarily attributable to a decrease in cash and cash equivalents during the reporting period[54][59] - The decrease in current liabilities was primarily due to a decrease in contract liabilities during the reporting period[55][59] Interim Condensed Consolidated Statement of Changes in Equity Equity Changes Summary Total equity slightly increased to RMB 5,992.2 million, with parent owners' equity at RMB 5,036.5 million and non-controlling interests at RMB 955.7 million Key Equity Changes Data (Six Months Ended June 30) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 322 | 322 | | Reserves | 5,036,206 | 5,035,913 | | Equity attributable to owners of the parent | 5,036,528 | 5,036,235 | | Non-controlling interests | 955,652 | 901,757 | | Total equity | 5,992,180 | 5,937,992 | - Profit for the period was RMB 49,361 thousand, of which RMB 4,075 thousand was a loss attributable to owners of the parent, and RMB 53,436 thousand was profit attributable to non-controlling interests[175] - Total other comprehensive income for the period was RMB 4,815 thousand, primarily from exchange differences on translation of financial statements[175] Interim Condensed Consolidated Statement of Cash Flows Cash Flows Summary Net cash used in operating, investing, and financing activities totaled RMB 583.5 million, RMB 169.4 million, and RMB 66.7 million, respectively, leading to a significant decrease in period-end cash Key Cash Flow Data (Six Months Ended June 30) | Cash Flow Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows used in operating activities | (583,450) | (779,026) | | Net cash flows used in investing activities | (169,385) | (190,407) | | Net cash flows used in financing activities | (66,705) | (20,737) | | Net decrease in cash and cash equivalents | (819,540) | (990,170) | | Cash and cash equivalents at beginning of period | 2,520,311 | 3,189,846 | | Cash and cash equivalents at end of period | 1,695,488 | 2,194,356 | - The decrease in net cash flows used in operating activities was primarily due to an increase in cash used in operations resulting from a decrease in contract liabilities[179] - Net cash flows used in investing activities were mainly affected by the purchase and maturity of short-term investments[180] - The increase in net cash flows used in financing activities was primarily due to new bank loans and other borrowings, as well as repayment of bank and other borrowings[181] Notes to the Interim Condensed Consolidated Financial Information Corporate and Group Information The company, incorporated in the Cayman Islands on December 13, 2005, primarily provides educational services in China - The company was incorporated in the Cayman Islands as an exempted company with limited liability on December 13, 2005[182][185] - For the six months ended June 30, 2025, the Group primarily provided educational services in the People's Republic of China[183][185] Basis of Preparation Unaudited interim condensed consolidated financial information is prepared in RMB under IAS 34, consistent with 2024 annual accounting policies - The financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[184][186] - The financial information is presented in RMB, and all amounts are rounded to the nearest thousand[184][186] Changes in Accounting Policies and Disclosures Revised IFRS accounting standards, specifically IAS 21 (Revised) 'Lack of Exchangeability,' were adopted but had no impact due to the Group's convertible currencies - International Accounting Standard 21 (Revised) "Lack of Exchangeability" was adopted for the first time in the current period[187][189] - As the currencies used for transactions by the Group and the functional currencies used by Group entities for translation into the Group's presentation currency are convertible, these amendments had no impact on the interim condensed consolidated financial information[188][189] Operating Segment Information The Group operates two segments, campus and online education, with campus education revenue at RMB 782.8 million and online education at RMB 112.0 million - The Group has two reportable operating segments: campus education and online education[190][194] Segment Revenue (Six Months Ended June 30) | Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Campus education | 782,801 | 752,217 | | Online education | 111,985 | 327,569 | | Total | 894,786 | 1,079,786 | Segment Results (Six Months Ended June 30) | Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Campus education | 268,826 | 283,924 | | Online education | (98,177) | (2,372) | | Total | 170,649 | 281,552 | Segment Assets and Liabilities (As of June 30, 2025) | Segment | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Campus education assets | 9,983,401 | 10,463,743 | | Online education assets | 2,436,361 | 2,516,331 | | Campus education liabilities | 2,781,874 | 3,515,987 | | Online education liabilities | 2,441,343 | 2,426,207 | Revenue, Other Income and Gains Total revenue was RMB 894.8 million, primarily from tuition and accommodation fees, with other income at RMB 55.8 million, while online education revenue significantly declined Revenue from Contracts with Customers (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Tuition fees | 717,682 | 690,920 | +3.9% | | Accommodation fees | 65,119 | 61,297 | +6.2% | | Distance education services | 50,184 | 209,296 | -76.0% | | Teacher training services | 9,262 | 13,570 | -31.7% | | Online course services | 14,567 | 10,676 | +36.4% | | Sale of books | 6,406 | 15,615 | -59.0% | | Other education services | 31,566 | 78,412 | -59.7% | | Total | 894,786 | 1,079,786 | -17.1% | Other Income and Gains (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Short-term investment income | 8,809 | 22,071 | -60.1% | | Rental income | 10,693 | 3,756 | +184.7% | | Bank interest income | 4,271 | 4,080 | +4.7% | | Government grants | 14,644 | 13,382 | +9.4% | | Net exchange gains | 4,763 | 9,202 | -48.3% | | Total | 55,762 | 71,543 | -22.1% | - Government grants are primarily used to compensate for operating expenses and teaching facility expenditures for school teaching activities, with no unfulfilled conditions or contingencies[202][204] Profit Before Tax Profit before tax was RMB 71.0 million, influenced by various expenses and income, including depreciation, amortization, employee benefits, and financial asset impairment Expenses/Income Affecting Profit Before Tax (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 85,013 | 83,433 | | Depreciation of right-of-use assets | 15,603 | 19,340 | | Amortization of other intangible assets | 15,491 | 40,053 | | Total employee benefit expenses | 367,095 | 391,146 | | Total impairment of financial assets | 17,867 | 58,141 | | Investment income from short-term investments | (8,809) | (22,071) | | Bank interest income | (4,271) | (4,080) | | Fair value loss/(gain) on equity investments | 2,676 | (4,182) | - Total employee benefit expenses (including directors' emoluments) amounted to RMB 367,095 thousand, a decrease from RMB 391,146 thousand in the prior period[212] - Impairment losses on financial assets significantly decreased from RMB 58,141 thousand in 2024 to RMB 17,867 thousand in 2025[215] Income Tax Income tax expense significantly decreased to RMB 21.6 million, with various corporate income tax rates applied, including preferential rates for certain entities Income Tax Expense (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current - Mainland China | 23,875 | 127,203 | | Deferred | (2,278) | (54,436) | | Total | 21,597 | 72,767 | - Companies operating in mainland China are subject to a corporate income tax rate of 25% on their respective taxable income[222][223] - Some companies enjoy preferential tax rates of 15% (e.g., schools under the Western Development Tax Incentive Program and high-tech enterprises) and 20% (e.g., small and micro enterprises)[222][223] - The Group's operating school in Yunnan, China, has been re-designated as a for-profit private school and enjoys a 15% preferential tax rate under the Western Development Tax Incentive Program[224][228] Interim Dividend The Board does not recommend any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[225][229] Losses/Earnings Per Share Attributable to Ordinary Equity Holders of the Parent Basic and diluted loss per share attributable to parent owners was RMB (0.0010), with share options having an anti-dilutive effect (Loss)/Earnings Per Share Calculation (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | (Loss)/profit attributable to owners of the parent | (4,075) | 104,802 | | Weighted average number of ordinary shares in issue | 4,217,720,000 | 4,217,720,000 | | Basic and diluted (loss)/earnings per share | RMB(0.0010) | RMB0.0248 | - No adjustment has been made to the basic earnings per share amount for the dilutive impact of share options, as they had an anti-dilutive effect on the basic earnings per share amount presented[227][230] Property, Plant and Equipment The Group acquired RMB 62.4 million in property, plant, and equipment, and disposed of assets with a net book value of RMB 0.3 million, realizing a net gain of RMB 0.4 million Property, Plant and Equipment Changes (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of additions | 62,353 | 179,787 | | Net book value of assets disposed | 269 | 8,826 | | Net gain on disposal | 411 | 382 | Financial Assets at Fair Value Through Profit or Loss Total financial assets at fair value through profit or loss amounted to RMB 120.7 million, primarily comprising contingent consideration, short-term, and equity investments Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current assets: Contingent consideration | 107,301 | 107,301 | | Current assets: Short-term investments | 2,500 | – | | Non-current assets: Equity investments | 10,850 | 13,729 | | Total | 120,651 | 121,030 | Other Non-Current Assets Other non-current assets totaled RMB 264.0 million, mainly advance payments for land use rights and acquisitions of private schools and companies Other Non-Current Assets (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments for acquisition of land use rights | 234,575 | 234,575 | | Prepayments for acquisition of private schools and companies | 19,260 | 19,260 | | Long-term prepayments, other receivables and other assets | 10,191 | 9,852 | | Total | 264,026 | 263,687 | Trade Receivables Total trade receivables were RMB 367.4 million, with the largest portion due within one year Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 212,199 | 295,130 | | 1 to 2 years | 134,363 | 78,513 | | 2 to 3 years | 19,220 | 9,360 | | Over 3 years | 1,650 | 848 | | Total | 367,432 | 383,851 | Trade Payables Total trade payables decreased to RMB 449.4 million, are interest-free, and typically settled within 30-60 days Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 277,190 | 407,255 | | 1 to 2 years | 90,148 | 86,539 | | 2 to 3 years | 76,991 | 6,714 | | Over 3 years | 5,054 | 25 | | Total | 449,383 | 500,533 | - Trade payables are interest-free and generally settled within 30 to 60 days[243][244] Contract Liabilities Total contract liabilities significantly decreased to RMB 94.0 million, primarily comprising prepaid tuition, accommodation, and distance education service fees Contract Liabilities Details (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Tuition fees | 10,200 | 685,090 | | Accommodation fees | 15,960 | 77,899 | | Distance education service fees | 8,342 | 8,888 | | Teacher training services | 135 | 107 | | Other education businesses | 59,397 | 63,171 | | Total | 94,034 | 835,155 | - Tuition and accommodation fees are collected in advance before the start of each academic year and recognized as revenue proportionally over the relevant course period[247][249] - Students have the right to recover relevant amounts for services not yet provided[247][249] - Contract liabilities primarily include short-term prepayments received from partner institutions and other customers, expected to be settled within one year[247][249] Other Payables and Accruals Other payables and accruals decreased to RMB 652.5 million, including accrued bonuses, property, plant, and equipment payables, and student expenses Other Payables and Accruals (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Accrued bonuses and other employee benefits | 65,832 | 87,901 | | Payables for purchase of property, plant and equipment | 168,254 | 281,677 | | Miscellaneous expenses collected from students | 173,570 | 138,234 | | Tuition fees collected from students | 66,371 | 62,043 | | Total | 652,466 | 776,711 | - Other payables are interest-free and repayable on demand[250] Interest-Bearing Bank and Other Borrowings Total interest-bearing bank and other borrowings increased to RMB 2,535.9 million, with rates ranging from 2.2% to 24.0%, secured by various assets Total Interest-Bearing Bank and Other Borrowings (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current | 1,196,657 | 910,937 | | Non-current | 1,339,254 | 1,287,387 | | Total | 2,535,911 | 2,198,324 | - The effective interest rate range for borrowings is 2.2% to 24.0%[253] - Some bank loans and government loans are secured by property, plant and equipment, leasehold land, equity pledges (Chongqing Lion Industry Co., Ltd., Chongqing Minsheng Education Management Co., Ltd., Leling Minsheng Education High School Co., Ltd., Duxue Network Technology (Beijing) Co., Ltd.), and pledges of rights to tuition fees of Yunnan University Dianchi College[255][256] - Time deposits of RMB 897,585 thousand (December 31, 2024: RMB 551,250 thousand) have been pledged to secure bank loans and other borrowings[255][256] - Buildings and equipment with a carrying value of RMB 502,454 thousand (December 31, 2024: RMB 251,450 thousand) held under sale and leaseback liabilities are pledged as collateral for the related sale and leaseback liabilities[255][256] - All borrowings are denominated in RMB, except for certain bank loans denominated in HKD and USD[255][256] Share Capital The company's authorized share capital is 10 billion ordinary shares at USD 0.00001 par value, with 4.217 billion issued and fully paid shares Share Capital Details (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Authorized share capital (10,000,000,000 ordinary shares) | 747 | 747 | | Issued and fully paid (4,217,720,000 ordinary shares) | 322 | 322 | Contingent Liabilities The Group faces a put option dispute over 49% equity in Lead Group and loan arbitration, with ongoing proceedings and no provisions made - Minsheng Vocational Education is in dispute with the seller regarding a put option for 49% of Lead Group's shares, with the seller claiming the exercise price is inflated by RMB 2,180,735,567.50[260][261] - Minsheng Vocational Education believes the seller's exercise is invalid, and that it issued a deed of grant of option on August 3, 2023, but the seller failed to exercise it by the specified deadline, causing the deed to automatically expire[260][261] - The Group provided a RMB 400 million loan to Lead Guojiao Education Technology (Beijing) Co., Ltd., secured by 49% of Lead Group's shares[263][265][266][267] - The seller claims the loan obligation has been offset, but the Group believes the outstanding principal and interest, and the pledge, remain in effect[263][265][266][267] - As of the date of approval of the consolidated financial statements, arbitrations at the Hong Kong International Arbitration Centre and China International Economic and Trade Arbitration Commission are ongoing, and the Group has made no provisions for these arbitrations[262][264][265] Commitments Total contractual commitments amounted to RMB 280.3 million, primarily for equipment, buildings, and private school acquisitions Contractual Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Equipment | 58,141 | 86,627 | | Buildings | 130,315 | 164,569 | | Acquisition of private schools | 91,800 | 91,800 | | Total | 280,256 | 342,996 | - As of the end of the reporting period, the Group had no authorized but uncontracted material capital commitments[270] Related Party Transactions The Group engaged in loan and interest transactions with Minsheng Group Co., Ltd., with RMB 172.6 million owed and RMB 13.3 million in key management compensation Related Party Transactions (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loans from Minsheng Group Co., Ltd. | 38,982 | 124,719 | | Repayment of loans from Minsheng Group Co., Ltd. | 33,029 | – | | Interest expenses paid to Minsheng Group Co., Ltd. | 560 | 744 | - As of the end of the reporting period, the Group had an outstanding balance of RMB 172,636 thousand payable to its ultimate holding company, Minsheng Group Co., Ltd., which is unsecured, bears interest at 5% per annum, and is repayable within one year[273][274] Key Management Personnel Compensation (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 12,983 | 12,826 | | Contributions to pension schemes | 273 | 259 | | Total | 13,256 | 13,085 | Fair Value and Fair Value Hierarchy of Financial Instruments Total fair value of financial assets was RMB 129.9 million, and financial liabilities RMB 2,474.5 million, with most short-term instruments valued at book value Fair Value of Financial Assets (As of June 30, 2025) | Item | Carrying Amount (RMB thousand) | Fair Value (RMB thousand) | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss – Equity investments | 10,850 | 10,850 | | Financial assets at fair value through profit or loss – Contingent consideration | 107,301 | 107,301 | | Financial assets at fair value through profit or loss – Short-term investments | 2,500 | 2,500 | | Financial assets included in other non-current assets | 9,260 | 9,260 | | Total | 129,911 | 129,911 | Fair Value of Financial Liabilities (As of June 30, 2025) | Item | Carrying Amount (RMB thousand) | Fair Value (RMB thousand) | | :--- | :--- | :--- | | Interest-bearing bank and other borrowings (excluding lease liabilities) | 2,502,006 | 2,474,525 | - Management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, and other short-term financial instruments approximate their carrying amounts[284][287] - Fair value measurements primarily use Level 2 (significant observable inputs), including short-term investments and contingent consideration[292][294][297][299][302][304] Event After the Period No significant events occurred after the reporting period - No significant events occurred after the reporting period[306][308]