Bright Scholar(US:BEDU)2020-11-12 17:59Financial Data and Key Metrics Changes - Revenue for Q4 2020 was RMB652.1 million, a decrease of 80.4% year-over-year, with gross profit down 29.5% and an operating loss of RMB171.9 million, primarily due to the pandemic's impact on business operations [10][20] - For the full fiscal year 2020, revenue grew by 31.3% to RMB3,366.5 million, with adjusted EBITDA growth of 36.5% [10][20] - Adjusted net loss for Q4 was RMB59 million, up 72.9%, with an adjusted net margin of negative 9.1% compared to negative 4.8% in the previous year [25] Business Line Data and Key Metrics Changes - Domestic K-12 schools revenue increased by 5.8% for Q4 and 4.1% for the fiscal year, with student enrollment up 6.6% for Q4 and 9.9% for the fiscal year [20][11] - Revenue from overseas schools for Q4 was RMB69.1 million, down 53.4%, but grew 359.9% year-over-year to RMB835.9 million due to the inclusion of acquired overseas schools [21] - The EdTech segment saw a revenue increase of 14% for Q4 and 47.7% for the fiscal year, driven by the acquisition of an online Academic Olympiad training business [22] Market Data and Key Metrics Changes - The pandemic significantly affected overseas operations, particularly in the UK and the US, leading to a decline in student enrollment and revenue from overseas schools [14][17] - Domestic operations have shown signs of recovery, with all K-12 campuses reopened and student enrollment returning to pre-COVID levels [12][34] Company Strategy and Development Direction - The company aims to leverage its global education network to enhance academic performance and expand its portfolio in complementary education services and EdTech [14][15] - A new share repurchase plan of up to US$50 million was approved, reflecting confidence in the company's long-term prospects [19][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the pandemic but expressed optimism about recovery in the domestic market and growth in EdTech and complementary education services [18][19] - The company remains cautious about overseas operations due to ongoing lockdowns and regulatory uncertainties [34][35] Other Important Information - The average student-teacher ratio for domestic K-12 schools was 8.9 for the fiscal year, slightly up from 8.8 [22] - The company plans to open 19 new kindergartens in fiscal 2021 and has seven schools and 39 kindergartens contracted for future operation [26] Q&A Session Summary Question: Can you break down the F 2021 revenue guidance and the assumptions behind it? - Management indicated that the guidance reflects the impact of COVID-19 on overseas business, estimating a potential loss of RMB300 million if conditions normalize [31][32] Question: What is your view on the recent MOE letter regarding regulations? - Management noted that the tone of the MOE letter has softened compared to previous communications, but they remain conservative in their expansion plans until more clarity is provided [35] Question: How do you see synergies between EdTech and complementary education? - Management highlighted that EdTech and complementary education services are growth areas with less regulation, allowing for potential synergies and cross-selling opportunities [39] Question: How much of the growth in guidance is organic versus acquisition? - Management clarified that the guidance does not include any potential acquisitions and is based solely on organic growth [40] Question: What is the current demand for international schools in China? - Management observed a hesitance among parents to send students overseas due to the pandemic and visa issues, but they expect demand to return once restrictions are lifted [42]