Bright Scholar(BEDU) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q2 2021 were RMB809 million, down 7.8% year-over-year, with gross profit and operating income down 46.5% and 152.9% respectively [8][18] - Adjusted net loss for the quarter was RMB36 million compared to adjusted net income of RMB59.4 million, with adjusted net margin at negative 4.4% compared to 6.8% [23] Business Line Data and Key Metrics Changes - Domestic K-12 business revenue increased by 12% in Q2 and 11.3% in the first half, driven by a substantial increase in enrollment [9][18] - Revenue from overseas schools decreased by 49.3% for the quarter and 48.8% on a six-month basis due to the pandemic [19] - Education Technology revenue grew by 35.6% in Q2 and 48.2% on a six-month basis, attributed to the acquisition of an online Academic Olympiad training business [19] Market Data and Key Metrics Changes - International schools' revenue for Q2 was up 10.6% due to a 7.6% increase in student enrollment [18] - Bilingual schools' revenue increased by 17.2% in Q2, with a student enrollment increase of 8.1% [19] - Kindergarten revenue was up 6.7% in Q2, driven by a 19.7% increase in student numbers [19] Company Strategy and Development Direction - The company aims to continue organic growth in the domestic K-12 business, rebuild overseas revenue, expand complementary service offerings, and accelerate growth in the EdTech business [16] - Strategic investments are planned in areas such as Golden Ballet Dance and expanding camp business offerings [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for a strong recovery in the second half of fiscal 2021, anticipating growth to resume as vaccination programs progress and travel restrictions are lifted [12][16] - The company is focused on maintaining organic enrollment momentum and enhancing offerings to rebuild and accelerate revenue growth [26] Other Important Information - As of February 28, 2021, cash and cash equivalents totaled RMB2,098.4 million, an increase from RMB1,697.2 million as of November 30, 2020 [23] - The company affirmed its revised guidance for total revenue in the range of RMB3.59 billion to RMB3.69 billion for the fiscal year ending August 31, 2021 [24] Q&A Session Summary Question: Can you elaborate on cost control in overseas schools and the low gross profit margin this quarter? - Management noted that SG&A expenses for the overseas segment decreased significantly year-over-year, with a combined cost reduction of RMB124 million [30] Question: What is the status of M&A opportunities? - Management indicated that while they are exploring M&A opportunities, they have not yet made any acquisitions due to ongoing travel restrictions affecting due diligence [31]