Core Viewpoint - The article discusses the challenges faced by Zhonggong Education, highlighting its declining revenue, increasing refund liabilities, and the impact of its "agreement class" model on its financial health [6][10][15]. Group 1: Company Performance - Zhonggong Education's revenue has decreased from 6.9 billion in 2021 to 2.6 billion in 2024, with a loss of 3.68 billion over the past years [6][10]. - The company reported a cash balance of 177 million, while the pending refunds reached 482 million [9]. - The "agreement class" model, which initially contributed 75% of the company's revenue, has now led to 82% of its litigation cases [8][10]. Group 2: Refund Issues - The refund process has become a significant issue, with reports of students facing long repayment terms, such as a 17-year plan for refunds [12][13]. - The overall refund rate reached 68.46% in 2021, with some products having a failure rate of 82.94% for students not passing exams [22]. - The company has been forced to adjust its refund policies, including offering internal vouchers instead of cash refunds [18]. Group 3: Market Dynamics - The number of applicants for national civil service exams has nearly doubled from 2021 to 2024, while the acceptance rate has dropped from 1.6% to 1.3% [23]. - The competitive landscape has intensified, with new entrants offering innovative refund schemes, further complicating Zhonggong Education's position [35]. - The company has begun downsizing its workforce from 45,000 to 7,888 and reducing its branches from 1,669 to 681 in response to financial pressures [35]. Group 4: Strategic Shifts - Zhonggong Education is attempting to diversify its business model by exploring new revenue streams, including employment services and hardware sales [36]. - The company has invested heavily in real estate, spending billions on new training facilities, which has not yielded the expected returns [29]. - Despite these efforts, the revenue from new ventures remains minimal, accounting for less than 3% of total income as of 2024 [38].