Financial Performance - The company's revenue for the year ended December 31, 2021, increased by 11.0% to RMB 831.7 million compared to RMB 749.1 million in 2020[11]. - Gross profit rose by 20.9% to RMB 315.0 million from RMB 260.5 million in the previous year[11]. - The net loss attributable to equity holders was RMB 26.6 million, a significant decline from a profit of RMB 48.9 million in 2020, representing a change of 154.4%[11][17]. - The adjusted net profit attributable to equity holders was RMB 23.9 million, down 75.3% from RMB 96.8 million in the prior year[11]. - Basic loss per share was RMB (4.83), compared to earnings of RMB 8.81 per share in 2020, reflecting a decrease of 154.8%[12]. - Profit before tax decreased by 88.8% from RMB 49.8 million in 2020 to RMB 5.6 million in 2021[44]. - Income tax expenses increased significantly from RMB 0.8 million in 2020 to RMB 32.6 million in 2021, mainly due to the termination of deferred tax asset recognition[45]. - The loss attributable to equity holders for 2021 was RMB 26.6 million, compared to a profit of RMB 48.9 million in 2020, representing a decrease of 154.4%[46]. - Total equity as of December 31, 2021, was RMB 317.5 million, down from RMB 538.0 million in 2020[55]. - Cash and cash equivalents decreased by 46.7% from RMB 442.6 million in 2020 to RMB 236.0 million in 2021, primarily due to net cash outflows from financing activities[55]. Revenue Sources and Growth - Non-academic quality courses saw a significant increase in revenue, rising 1,912.7% to RMB 195.973 million in 2021 from RMB 9.737 million in 2020[32]. - The total number of enrolled students in non-academic quality courses increased by 1,338.1% to 57,207 in 2021, while academic education course enrollment decreased by 24.5% to 249,826[32]. - Approximately 23.6% of the revenue came from non-academic quality courses, while about 76.4% was derived from academic education courses[113]. - Future guidance indicates an expected revenue growth of 20% for the upcoming fiscal year[88]. Operational Changes and Strategies - The company introduced non-academic competency courses targeting primary and secondary school students in the fall of 2021, including science literacy and logical thinking training[17]. - The group plans to enhance the "Le Xue" brand's business development, focusing on various quality education programs to support comprehensive development for children[20]. - The group is actively organizing after-school care services to provide a safe and comfortable environment for students[20]. - The company aims to diversify its development in response to recognition from students, parents, and the community[9]. - The company is committed to complying with relevant regulations and actively transforming its business model in response to the "double reduction" policy[17]. Cost Management and Expenses - Sales costs increased by 5.8% to RMB 516.7 million in 2021, primarily due to higher teacher salaries and reduced rent relief from COVID-19[34]. - Administrative expenses increased by 11.6% from RMB 152.3 million in 2020 to RMB 170.1 million in 2021, primarily due to a one-time impairment provision of RMB 30.6 million[37]. - R&D expenses decreased by 6.3% from RMB 57.0 million in 2020 to RMB 53.4 million in 2021, mainly due to reduced spending following the closure of the learning center network[38]. - Other income decreased by 36.0% from RMB 35.2 million in 2020 to RMB 22.5 million in 2021, primarily due to a reduction in government subsidies by RMB 12.7 million[41]. - Other net income turned into a loss of RMB 65.9 million in 2021, a decrease of 385.7% from a profit of RMB 23.1 million in 2020, mainly due to increased losses from the sale of property and equipment[42]. - Financial costs decreased by 20.5% from RMB 36.4 million in 2020 to RMB 29.0 million in 2021, attributed to reduced interest expenses on borrowings and lease liabilities[43]. Regulatory Compliance and Market Adaptation - The company is committed to adapting to changing market conditions and actively seeking investment opportunities to broaden its revenue base[61]. - The company will continue to monitor the regulatory environment and assess its impact on business and financial conditions[76]. - The Ministry of Education has issued guidelines requiring off-campus training materials to comply with national curriculum standards and undergo internal and external audits[73]. - The company is prohibited from financing or investing in subject-based off-campus training institutions through the stock market or other means[76]. - All subject-based off-campus training institutions are required to register as non-profit organizations by the end of 2021, with a suspension of enrollment and fee collection until registration is completed[76]. Shareholder Information and Corporate Governance - The board has declared an interim dividend of HKD 0.10 per share for the six months ended June 30, 2021, and a special dividend of HKD 0.15 per share for the year ended December 31, 2021[77]. - The board does not recommend a final dividend for the year ended December 31, 2021, compared to a final dividend of HKD 0.12 per share for the previous year[77]. - The company has adopted share option and share award plans as incentives for directors and eligible employees[135]. - The independent non-executive directors confirmed their independence in accordance with the listing rules[133]. - The company has no knowledge of any tax relief available to shareholders due to their shareholdings[119]. - The major shareholder, Tian Sheng, also holds 214,080,000 shares, equivalent to 38.52% of the equity[150]. Structural Contracts and Related Party Transactions - The structural contracts established on January 13, 2019, allow Shenzhen Fengye to receive all economic benefits generated by Chinese operating entities through service fees[193]. - The structural contracts include various agreements such as exclusive business operation and consulting services, exclusive technology services, and exclusive purchase rights agreements[193]. - Independent non-executive directors confirmed that transactions under the structural contracts for the year ended December 31, 2021, were established according to the relevant provisions of the contracts[198]. - The structural contracts ensure that most profits generated by Chinese operating entities are retained by the group[198]. - The group has maintained compliance with the relevant regulations regarding related party transactions[198].
思考乐教育(01769) - 2021 - 年度财报