Group 1 - The number of applicants for the 2026 national civil service exam reached a record high of 3.718 million, with only 38,100 positions available, resulting in an acceptance ratio of approximately 98:1 [1] - Major players in the civil service exam training industry, such as Zhonggong Education, are experiencing significant revenue and profit declines, with Zhonggong's revenue dropping from 6.9 billion to 2.6 billion over four years [3][4] - The training institutions are heavily reliant on a model called "guaranteed pass classes," where students pay upfront and receive a full refund if they do not pass, leading to a paradox of increasing enrollment but decreasing profitability [3][4] Group 2 - The upfront payments from students are recorded as liabilities rather than income, creating a financial strain when refund requests increase [4][5] - Zhonggong Education expanded aggressively using prepayments and introduced a loan program that allowed students to enroll with no upfront cost, which initially boosted enrollment and revenue [5][7] - As the number of applicants increases and exam difficulty rises, refund claims have surged, with Zhonggong's refund liabilities exceeding training fees for the first time in Q3 2021 [7][9] Group 3 - The civil service training industry is facing intensified competition due to policies and the entry of other educational institutions, which has made traditional marketing and profit models less effective [9] - Universities are now providing their own civil service exam resources, further squeezing the market for training institutions [9]

Core Viewpoint - The article discusses the challenges faced by Zhonggong Education, a leading public examination training institution in China, highlighting its declining revenue, increasing refund liabilities, and the impact of its business model on its financial health [5][6][9]. Group 1: Company Performance - Zhonggong Education's revenue has significantly decreased from 6.9 billion in 2021 to 2.6 billion in 2024, with a cumulative loss of 3.68 billion over the past years [6][8]. - The company reported a refund liability of 4.82 billion while having only 1.77 billion in cash on hand as of the first half of this year [8][9]. - The "agreement class" model, which initially contributed 75% of the company's revenue, has now led to 82% of its litigation cases, indicating a severe operational risk [7][9]. Group 2: Business Model and Risks - The "agreement class" model, which promised refunds for unsuccessful candidates, has become a liability, with a refund rate reaching 68.46% in 2021 [30][39]. - The company has heavily invested in short-term financial products, totaling 889 billion from 2018 to 2021, but has faced increasing refund demands that outpace its investment returns [27][35]. - The competitive landscape has intensified, with new entrants offering attractive refund policies, further straining Zhonggong Education's market position [47][48]. Group 3: Industry Trends - The public examination market has seen a surge in applicants, with the number of candidates nearly doubling from 2021 to 2024, while the acceptance rate has dropped from 1.6% to 1.3% [31][32]. - The article notes that the public examination training industry is evolving, with competitors diversifying into other sectors, such as health and wellness, to mitigate risks associated with the public examination model [45][46]. - Zhonggong Education is attempting to pivot towards employment services, recognizing the need for adaptation in a challenging market environment [50][52].

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].

Core Viewpoint - The article discusses the challenges faced by Zhonggong Education, highlighting its declining revenue and increasing refund liabilities due to its "agreement class" model, which has led to significant financial strain and legal issues [2][4][9]. Group 1: Company Performance - Zhonggong Education's revenue has decreased from 6.9 billion in 2021 to 2.6 billion in 2024, with a cumulative loss of 3.68 billion over the past years [2][4]. - The company reported a cash balance of 177 million, while the pending refunds reached 482 million, indicating a severe liquidity crisis [4]. - The "agreement class" model, which once accounted for 75% of the company's revenue, now contributes to 82% of its legal disputes [4][9]. Group 2: Refund Issues - A recent incident highlighted the difficulties in refunding students, with one student facing a 17-year repayment plan for a failed exam [6][8]. - The refund process has become so problematic that it has attracted attention from scammers posing as customer service representatives [8]. - The overall refund rate reached 68.46% in 2021, with only 20%-30% of students passing the written exams, leading to increased financial liabilities for the company [12][16]. Group 3: Market Dynamics - The competition in the civil service exam training market has intensified, with the number of applicants nearly doubling from 2021 to 2024, while the acceptance rate dropped from 1.6% to 1.3% [12][14]. - New entrants in the market have introduced aggressive refund policies, further complicating Zhonggong Education's position [22][23]. - The company has begun downsizing, reducing its workforce from 45,000 to 7,888 and cutting the number of direct branches from 1,669 to 681 [23]. Group 4: Strategic Shifts - Zhonggong Education is attempting to pivot towards employment services, claiming it will be a valuable market in the next decade [23][25]. - The company has also ventured into new business areas, including hardware and live streaming, although these efforts have yet to yield significant revenue [23][25]. - Despite these efforts, the revenue from new ventures remains below 3% of total income, indicating challenges in successfully diversifying its business model [25].

Core Viewpoint - The ongoing refund issues at Zhonggong Education highlight significant operational and financial challenges, with a growing number of complaints and lawsuits related to refund disputes, indicating a potential crisis for the company [4][7][21]. Group 1: Refund Issues - A recent case involved a student who was promised a refund of 17,000 yuan but was informed that only 1,000 yuan could be refunded per year, leading to a 17-year wait for full reimbursement [4]. - As of August 21, Zhonggong Education had 115,052 complaints on the Black Cat Complaints platform, significantly higher than competitors Huatu Education and Fenbi, which had 2,798 and 1,626 complaints, respectively [4]. - The company reported 700 new lawsuits and arbitration cases since January 25, 2025, with a total amount involved of 53.8 million yuan, including 575 cases related to refund disputes totaling 11.5 million yuan [7][8]. Group 2: Financial Performance - Zhonggong Education's revenue for Q1 2025 was 575 million yuan, a decrease of 24.69% year-on-year, while net profit dropped by 51.69% to approximately 40 million yuan [30][31]. - The company's cash flow from operating activities fell by 42.45%, indicating severe liquidity issues, with only 372 million yuan in cash by mid-2025, compared to competitors Fenbi and Huatu, which had 902 million yuan and 295 million yuan, respectively [31][32]. Group 3: Business Model and Market Position - Zhonggong Education's business model, particularly the "agreement class" system, allowed students to pay upfront for courses with a refund guarantee if they failed exams, creating a low-cost funding pool for the company [11][12]. - The company expanded rapidly, achieving nationwide coverage with 1,335 direct teaching points by 2019, but this aggressive expansion has now become a liability as it struggles to manage its financial obligations [12][14]. - The shift in the market towards smaller training institutions and the impact of AI on vocational education are posing additional challenges to Zhonggong Education's traditional business model [23][26]. Group 4: Strategic Missteps - The company's strategic focus on expansion and financial investments rather than addressing refund issues has led to a trust crisis among students, resulting in a significant drop in new enrollments [21][22]. - The founder, Li Yongxin, attributed the company's struggles to external factors like the pandemic, but internal strategic errors, such as failing to adapt to market changes, have also played a crucial role [17][18].

Group 1 - The core initiative "Skills Illuminate the Future" aims to enhance employment opportunities for university graduates in Hohhot by establishing a service system that integrates skills training and employment services [1] - Hohhot is promoting training models such as "order classes" and "agreement classes" to improve graduates' skills and facilitate their employment [1] - The city is fostering cooperation between government, schools, and enterprises by collecting training needs from companies and aligning them with academic programs, resulting in 91 "order classes" and training 2,200 students [1] Group 2 - Hohhot has launched the "Skills Illuminate the Future: Qingcheng Craftsman School Tour" to inspire students' interest in skill learning and ensure that employment policies are accessible and understandable [2] - The city has identified 35,000 job opportunities for graduates through various methods, including job fairs and policy-driven job releases [2] - A total of 22,600 university students have secured employment in Hohhot this year, supported by 11 campus recruitment fairs and a tailored job matching approach [2]