Bright Scholar(US:BEDU)2019-04-23 13:43Financial Data and Key Metrics Changes - The company's revenue for Q2 2019 was RMB 508.8 million, representing a year-over-year increase of 57.5% [14] - Gross profit for the quarter was RMB 150.3 million, up 108%, with gross margin improving from 22.4% to 29.5% [17] - Adjusted net income for the quarter was RMB 32 million, up 991.2%, with an adjusted net margin of 6.3% compared to a loss of 1.1% in the same period last year [20] Business Line Data and Key Metrics Changes - Revenue from international schools for the quarter was RMB 146.3 million, up 23.3% [14] - Revenue from bilingual schools for the quarter was RMB 130.6 million, up 20.2% [15] - Revenue from kindergartens for the quarter was RMB 91.5 million, up 25.3% [15] - Revenue from complementary education services for the quarter was RMB 124.3 million, up 445.8% [15] Market Data and Key Metrics Changes - The average student enrollment increased by 22.7% to 42,035, with blended utilization rising to 71% from 60.4% [9] - The company operates a total of 69 schools, including six international schools, 13 bilingual schools, and 47 kindergartens [9] Company Strategy and Development Direction - The company aims to maintain competitive pricing across all school segments to optimize utilization [9] - Strategic investments are pivotal for expanding the business scale and broadening educational service offerings, with seven completed acquisitions and three in progress [10] - The company is focusing on expanding its overseas presence, particularly in English-speaking countries, and is looking for unique schools or large-scale companies for acquisition [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of their financial guidance range due to strong growth across all business segments [8] - The company is committed to investing in teacher recruitment and development, improving operational infrastructure, and enhancing service offerings to meet academic excellence aspirations [22] Other Important Information - The company has been active in its share repurchase program, repurchasing approximately 6.48 million American depository shares for about USD 75 million [13] - The company reaffirmed its revenue guidance for fiscal year 2019, expecting total revenue to be between RMB 2,300 million and RMB 2,350 million, representing a year-over-year growth of 34% to 37% [21] Q&A Session Summary Question: What has changed regarding the gross margin improvement in complementary education services? - Management indicated that the margin improvement is due to the consolidation of new acquisitions, which have higher margins, contributing significantly to the blended gross margin [26] Question: What is the full-year EBITDA margin guidance? - Management did not provide specific EBITDA margin guidance but noted that they expect to maintain similar levels of EBITDA margins compared to the previous year while achieving margin leverage going forward [29] Question: What is the overseas expansion strategy? - The company will focus on English-speaking countries and seek unique schools with a solid reputation or large-scale companies for acquisition [38]