Financial Performance - For the fiscal year 2021, the company reported revenue of RMB 352.9 million, an increase of 6.0% compared to RMB 333.0 million in the previous fiscal year[8]. - The company experienced a significant loss before tax of RMB (55.7) million, a decrease of RMB 60.4 million from a profit of RMB 4.7 million in the previous year, representing a decline of 1,291.6%[8]. - The net loss for the year was RMB (56.8) million, compared to a profit of RMB 2.1 million in the previous year, marking a decline of 2,866.5%[8]. - The total comprehensive loss for the year amounted to RMB (61.8) million, compared to a total comprehensive income of RMB 2.1 million in the previous year, reflecting a decline of 3,110.0%[8]. - Basic loss per share was RMB (7.31), a decrease of RMB 7.61 from earnings of RMB 0.30 per share in the previous year, representing a decline of 2,536.7%[8]. - Total revenue for the fiscal year 2021 was approximately RMB 352.9 million, an increase of about RMB 19.9 million or approximately 6.0% compared to RMB 333.0 million in fiscal year 2020[20]. - Tuition revenue from regular, premium, and VIP classes amounted to RMB 325.9 million, representing 92.3% of total revenue, compared to RMB 304.6 million or 91.5% in the previous year[22]. - Gross profit increased by approximately RMB 8.4 million or about 7.7% to RMB 117.4 million, with a gross margin rising from approximately 32.7% to 33.3%[24]. Operational Changes - The company strategically adjusted its operations in the second half of the fiscal year to explore new business opportunities and diversify its business portfolio[11]. - The company faced unprecedented challenges in the second half of the fiscal year due to regulatory changes and the resurgence of COVID-19, impacting its operations significantly[10]. - The company has shifted several in-person classes to online formats due to challenges posed by the COVID-19 pandemic and regulatory changes in the education sector[16]. - The company closed most of its self-operated teaching centers starting August 2021 due to regulatory compliance, impacting future revenue generation[20]. - The company has closed 10 existing self-operated teaching centers as part of a business restructuring plan, with agreements reached to terminate the lease agreements, resulting in partial refunds of existing deposits and rent prepayments[198]. Student Enrollment and Services - In the fiscal year 2021, the total number of enrolled students in regular, boutique, and VIP classes reached 281,765, with a total tutoring duration of 5,539,289 hours, 102,197 hours, and 504,271 hours respectively[15]. - The total tutoring hours for fiscal year 2021 reached 6,145,757, an increase from 5,769,582 hours in the previous year[22]. - As of December 31, 2021, the company had approximately 94,000 students, an increase from about 66,000 students as of December 31, 2020, reflecting a growth of approximately 42.4%[97]. Business Expansion Plans - The company plans to diversify its business portfolio to include three additional types of tutoring services: (i) extracurricular personal quality courses in arts, sports, and coding for children and teenagers; (ii) vocational education for high school students and adults; and (iii) overseas study consulting[12][17]. - The company plans to leverage its over 20 years of experience to maintain teaching quality and efficiency while enhancing its reputation and influence in tutoring services[10]. - The company aims to enhance training quality in vocational education and incorporate advanced technology subjects to support sustainable economic and social development[13]. - The company plans to acquire a 60% equity interest in a target company for a consideration of RMB 1,000,000, with the acquisition agreement signed on February 14, 2022[91]. Financial Position and Assets - Cash and bank balances were approximately RMB 259.8 million as of December 31, 2021, a decrease of approximately RMB 39.9 million or 13.3% from RMB 299.7 million on December 31, 2020[46]. - The company's capital-to-debt ratio was approximately 0.1 as of December 31, 2021, down from approximately 0.7 on December 31, 2020[54]. - The current ratio improved to approximately 4.1 times as of December 31, 2021, compared to approximately 1.7 times on December 31, 2020[55]. - The company has no outstanding loans or borrowings as of December 31, 2021[103]. Management and Shareholding - Zhang Hongjun holds 505,860,800 shares, representing approximately 63.23% of the total issued share capital of the company[60]. - The company has a significant management team with over 23 years of experience in the education industry, led by Zhang Hongjun[60]. - The shareholding structure indicates a strong commitment from the executive directors, with substantial ownership stakes[60][61][64]. - The company has established a remuneration committee to review its remuneration policy based on operational performance, individual performance of directors and senior management, and market practices[114]. Risks and Compliance - The company faces significant risks related to brand reputation, regulatory compliance, and competition in the education sector[79][80]. - The company will continue to closely monitor the regulatory environment that may significantly impact its operations and financial condition[18]. - Risks associated with structural contracts include potential non-compliance with Chinese laws, which could lead to severe consequences, including the invalidation of contracts[174]. - The company has taken steps to mitigate risks related to foreign investment laws, including hiring external legal advisors for compliance reviews[176]. Share Incentive Plans - The stock option plan allows for a maximum issuance of 80,000,000 shares, representing 10% of the issued share capital at the time of listing, subject to shareholder approval for any increase[123]. - A total of 30,000,000 reward shares were granted to 56 employees, including four directors, at a zero reward price during the fiscal year 2021[138]. - The total number of shares granted under the share award plan shall not exceed 10% of the issued shares as of December 14, 2020, which amounts to a maximum of 80,000,000 shares[131]. - The total percentage of shares granted to related parties is approximately 58.90% of the incentive shares[157]. Structural Contracts - The company operates in the Chinese education sector through a structured contract due to legal restrictions on foreign ownership in the industry[162]. - The exclusive business cooperation agreement grants the company proprietary rights to provide necessary technical services and management support to its consolidated affiliated entities[165]. - The structural contracts remain legally effective and binding, with no violations or non-compliance reported as of the report date[185]. - The company has implemented measures to ensure compliance with structural contracts and effective business operations, including annual reviews by the board of directors[176].
大山教育(09986) - 2021 - 年度财报