Bright Scholar(US:BEDU)2022-01-17 16:00Financial Performance - For the fiscal year 2021, the company's revenue was RMB1,401.8 million (approximately US$217.0 million), with a net loss of RMB535.1 million (approximately US$82.8 million) [289]. - The adjusted net loss for the fiscal years 2019, 2020, and 2021 was RMB164.2 million, RMB283.6 million, and RMB420.2 million (approximately US$65.0 million), respectively [289]. - For the fiscal years 2019, 2020, and 2021, the company's revenue was RMB666.6 million, RMB1,476.3 million, and RMB1,401.8 million (US$217.0 million) respectively, with a net loss of RMB227.1 million, RMB307.3 million, and RMB535.1 million (US$82.8 million) for the same periods [436]. - Total revenue for 2021 was RMB 1,401,780, with a significant increase from RMB 1,476,347 in 2020 [460]. - Selling, general, and administrative expenses were RMB 535.9 million (US$82.9 million) in 2021, representing 38.2% of total revenue [465]. - The company reported a net income from discontinued operations of RMB 477,883 for 2020, contributing positively to overall financial results [471]. - Non-GAAP measures, including adjusted net income and adjusted operating income, are utilized to provide a clearer view of the company's financial health [474]. Student Enrollment and Educational Institutions - The overseas school network consists of eight schools, with an average enrollment of 2,343 students for the 2021 school year [290]. - The average number of students enrolled at Bournemouth Collegiate School for the 2021 school year was 631, while CATS London had 195 students [292][293]. - The total student enrollment for continuing operations was 2,835, 3,753, and 3,282 for the fiscal years 2019, 2020, and 2021 respectively, indicating a decline in enrollment in 2021 [441]. - The company has eight kindergartens in China, with a total average enrollment of 939 students in the 2021 school year [308]. - The company lost control of 68 domestic kindergartens since August 31, 2021, which had an average enrollment of 21,257 students during the 2021 school year [312]. - The discontinued bilingual and international schools had a total average enrollment of 33,505 students during the 2021 school year [316]. - The average utilization rate for domestic kindergartens was 34.0% as of September 1, 2021, reflecting the ramp-up stage of recently opened schools [444]. Strategic Investments and Acquisitions - The company has acquired several educational institutions, including BCS in December 2018 and CATS in July 2019, expanding its presence in the UK and the US [291]. - The company is actively exploring mergers and acquisitions to expand its global school network, targeting quality K-12 private education providers [287]. - The company plans to continue making strategic investments and acquisitions in overseas schools and complementary businesses to drive future growth [322]. - The company has strategically invested in several education consulting service providers to enhance its overseas study consulting services [306]. - The company plans to continue strategic investments and acquisitions to expand its global school network and enhance profitability [455]. Regulatory Environment - The company operates under a legal regime in China governed by various authorities, including the National People's Congress and the State Council, which regulate foreign investment in education [348]. - Foreign investment in kindergarten, high school, and higher education is restricted, requiring domestic parties to play a dominant role in cooperation [349]. - The 2021 Negative List maintains restrictions on foreign investment in the education sector, prohibiting foreign investors from participating in compulsory education [353]. - The company’s domestic kindergartens are classified within restricted industries for foreign investors [354]. - The Education Law of the PRC establishes a nine-year compulsory education system and encourages private investment in education, although profit-making is generally prohibited [355]. - The Law for Promoting Private Education allows for the establishment of non-profit and for-profit private schools, with specific regulations governing their operations [360]. - The company is subject to significant limitations on its ability to engage in the private for-profit education business due to the amended regulations, which may materially and adversely affect its financial condition and results of operations [370]. - Local governments, such as Jiangsu and Hebei provinces, have introduced regulations requiring existing private schools to register as either for-profit or non-profit within a specific time period [371]. - The Implementation Rules effective from September 1, 2021, restrict foreign-invested enterprises from controlling private schools providing compulsory education [420]. Operational Efficiency and Management - The company has centralized its management system to improve efficiency across its domestic school network [317]. - The company implemented an ERP system in the 2018 fiscal year to enhance data management processes and operational efficiency [321]. - The ability to maintain collaboration with Country Garden for school operations is crucial for cost-efficient expansion of the school network [454]. - The company continues to operate domestic for-profit kindergartens and K-12 services, alongside overseas schools and complementary education services [434]. Educational Programs and Services - The company has developed business collaborations for summer and winter camp programs in countries like the UK, US, and Australia, enhancing students' learning experiences [299]. - In the 2021 fiscal year, approximately 87,000 students participated in the company's domestic and overseas camp programs as well as domestic travel study programs [302]. - The company operates 18 learning centers for English proficiency training, with an average student enrollment of 3,651 in the 2021 school year [304]. - The company launched its first domestic campground, Lake Forest Camp, in Huizhou, Guangdong province in early 2019, targeting students from both its own schools and external schools [301]. - The company plans to launch new camp programs in three to five provinces in the coming year, focusing on STEAM activities [301]. Teacher Recruitment and Training - The company has established partnerships with several universities for teacher training and recruitment, ensuring a steady source of qualified educators [330]. - The company faces risks related to the inability to recruit and retain qualified teachers due to stringent regulations on professional ethics for primary and secondary school teachers [379]. Intellectual Property and Branding - The company has registered a total of 71 trademarks and 71 domain names, including "Bright Scholar" and "élan," to protect its intellectual property rights [343].