ATA Creativity (AACG)2024-05-15 15:40Financial Data and Key Metrics Changes - Total net revenues for Q1 2024 were RMB 48.1 million, a 13.7% increase from RMB 42.3 million in Q1 2023, primarily driven by portfolio training services [11][12] - Gross margin improved to 45.5% in Q1 2024 from 44.3% in the prior year period, indicating increased operational efficiencies [11] - Net loss attributed to ACG was RMB 17.9 million in Q1 2024, slightly higher than RMB 17.8 million in the prior year, mainly due to increased sales expenses [12] Business Line Data and Key Metrics Changes - Total student enrollment for Q1 2024 was 1,370, up nearly 25% from about 1,097 in the prior year period [10] - Enrollment in core portfolio training programs increased more than 33%, with 863 students enrolled in Q1 2024 compared to 648 in the prior year [10] - Portfolio training credit hours delivered were 33,527, reflecting a 21.3% year-over-year increase [10] Market Data and Key Metrics Changes - The demand for nontraditional pathways to higher education in China has improved the visibility of arts education institutions [15] - The company hosted the Open Hack Shanghai Fashion Week program, which was well-received and contributed to student portfolios for overseas applications [16] Company Strategy and Development Direction - The company aims to continue growing its core portfolio training service business while exploring potential acquisitions [14][20] - ACG is focused on enhancing research-based learning and overseas study counseling services to provide a comprehensive educational offering [10][20] - The introduction of new projects like the United Nations art bootcamp aims to empower students and enhance their overseas study applications [18][19] Management's Comments on Operating Environment and Future Outlook - Management reiterated revenue expectations for 2024 to be between RMB 233 million to RMB 255 million, representing a 5% to 15% increase from 2023 [14] - The company remains optimistic about its prospects for 2024 and is committed to supporting students academically and emotionally [22] Other Important Information - The company has a solid financial position with US 36.9 million [12] - Management emphasized the importance of student outcomes and the role of dedicated instructors and institutional partnerships in achieving these goals [20] Q&A Session Summary Question: Thoughts on enrollment in portfolio training and its trajectory - Management noted strong growth in Q1 with nearly 50% revenue increase in the previous quarter, driven by student enrollment and credit hours delivered [25] - They believe ongoing investment in teaching resources will support sustainable growth in portfolio training services [26] Question: Additional color on revenue guidance and growth sources - Management indicated that core business and portfolio training will see sustainable growth in the next two to three quarters, with additional revenue from project-based learning and overseas study companies [30]