Dow Jones received a payment from EQS/DGAP to publish this press release.
EQS-News / 01/04/2019 / 09:27 UTC+8
*Strong Organic Growth with Student no. increased by 72%
Total income increased by 34% to RMB 730 mn*
(29 March 2019, Hong Kong) *China New Higher Education Group Limited* ("New
Higher Education Group", together with its subsidiaries, the "Group"; stock
code: 2001.HK) is pleased to announce the consolidated annual results for
the year ended 31 December 2018.
*Financial Overview*
- Total revenue amounted to RMB728 million, up 34.0% yoy
- Gross Profit amounted to RMB286 million, up 25.9% yoy
- EBITDA amounted to RMB439 million, up 34.2% yoy
- Adjusted net profit increased 20.3% to RMB285 million, adjusted net profit
margin of 39.2%
- Proposed final dividend of RMB0.019 per share (HK$0.0222), combined annual
dividend of RMB0.046 per share (HK$0.0532).
*Operation Overview*
*- *Leading organic growth among peers, total student enrollment no. of the
four schools established or invested before IPO growed 15.0% averagely
- Total student enrollment no. reached 93,548 in 2018/19 academic year,
compared to 54,290 in 2017/18 academic year, increased by 72.3% y/y
(including newly invested schools)
"In 2018, the Group steadily embarked on a new journey of another round of
entrepreneurship. Listed for around 2 year, with the support of investors
and stakeholders, we have braved the storms and faced the world in the
capital market and have taken solid steps on the new journey." Founder of
the Company and Chairman of the Board Mr. Li Xiaoxuan said.
Benefiting from our cross provinces expansion and pro-investment
consolidation capability, total student enrollment no.of the Group, both
organic and inorganic, maintaining strong growth trend. We have accumulated
years of collectivized school operation experience, enabling us successfully
entering into 7 provinces, with the widest footprint. The new schools have
achieved remarkable improvement.
*Financial Analysis*
Looking back, the Group's revenue increased 35.5% to RMB562 million. Tuition
fee income increased 34.6% to RMB512 million, reflecting the increased in
both student no. and tuition fee. Boarding fee increased 45.3% to RMB49
million reflecting the increased in both student no. and boarding fee.
Gross profit increased by 25.9% to RMB286 million y/y. The gross profit
margin decreased to 51.0% from 54.9%, primarily due to the the increase in
the Group's teaching investment, improve student's experiences and the
consolidation results from new schools.
Adjusted net profit increased 20.3% to RMB285million y/y, excluding the
impairment allowance made for prepayment included in other non-current
assets.
*Cash on hand*
As at the end of 2018, the Cash on hand of the Group amounted to RMB413
million.
*Capital Expenditures *
For the year ended 31 December 2018, our capital expenditures were RMB415
million, including the construction of buildings and school facilities at
the new campus, prepaid rental for the land lease and purchase of equipment
and software by the schools of the Group.
*Business Review*
On 31 December 2018, the Group operated and invested 6 higher education
institutes in six
provinces in mainland China with nationwide student enrollment coverage. Our
students attended 84 general undergraduate majors and 76 general junior
college majors. Total student no. reached 93,548, representing an increase
of 72.3% (excluding Gansu College). Furthermore, the Group has applied to be
a joint school sponsor of Gansu College and is expected to complete its new
campus relocation in September 2019.
*Job-oriented nurturing model*
As of 31 December 2018, 1,211 students had participated in the Group's
excellent apprenticeship
Training.The starting salary of the 2017 fresh graduates from the College of
Excellence at Yunnan School is RMB5,601 per month, which is way above market
standard, and its employment rate is 100%.
*Integration of Industry and Education, Cooperation between Schools and
Enterprises*
For the schools under the Group, they established a profound
school-corporate cooperation with
many well-known companies including Microsoft, Huawei, Alibaba, Lenovo,
Jingdong, Midea,
Gree, Geely, 360, Tedu, iFlytek, China Union, Chinasoft International,
Newland Group and
Travelsky Group. They jointly carry out talents training through many
cooperative models such as
teaching sharing, course resources sharing, construction of experimental
training bases, joint
construction of majors as well as college co-found.
*Future Prospect*
*Education Policy Trend*
Recently, the PRC government promulgated the "National Vocational Education
Reform
Implementation Plan"(????????????), which not only puts vocational
education on the equal position as ordinary education on the top-level
design, but also clarifies
the direction of social diversified school establishment, and once again
strengthens the policy
of encouraging private education. The plan has opened up more development
room for private
vocational education, especially for those higher education groups (such as
China New Higher
Education) which has both undergraduate colleges focusing on applied
sciences with vocational
colleges. The plan not only has demonstrated the correctness of the
strategic choice of applied
education, but also provides guidance for future development of school
establishment.
The promulgation of a series of policies and documents such as "China
Education Modernization
2035"(«???????2035»)and "Accelerating the Implementation Plan of Education
Modernization (2018-2022)"(«?????????????(2018-2022?)»)shows
that private higher vocational education has become an important part of the
national education
strategy. Relying on encouragement, guidance and standardized supervision of
the PRC, more
development opportunities will be emerged in the private education sector,
but also face more
demands and expectations from the national and public levels in improving
their own development
standards. In addition, in the government work report, it is mentioned that
it will further reform
and improve the examination and enrollment methods for higher vocational
colleges and expand
additional one million students enrollment this year, which reflect the
determination of the State
to promote the development of vocational education. All higher vocational
colleges will directly
benefit therefrom, especially the schools with brand and competitive
advantages will have greater
development opportunities.
*Development strategy of "Improvement, Enlargement, Light Assets"*
It is our primary task to improve quality, including improving talent
training capability focused
on applied science and driving the overall quality improvement. Secondly, we
will enlarge income
base and enhance the utilization rate of schools under the Group, focus on
traditional principal
business, expand the sectors for external income and enlarge the income from
our principal
and secondary businesses, optimize expenditure structure to cut down
operating costs. Thirdly,
we will adopt light assets approach, adjust and optimize its structure and
integrate resources
comprehensively, and at the same time, lower capital expenditure and improve
the capability of
light assets and strong management.
*Investment Strategy*
The Group intends to expand its school network and increase market
penetration and market
share in the vocational higher education sector. The Group's investment team
has rich investment
experience and has identified certain targets for potential quality
acquisitions. The Group gives
priority to invest in those provinces with lower gross higher education
enrollment rates and
gradually penetrates into education developed regions. In terms of education
level, the Group
focuses on undergraduate school especially independent colleges as our main
target and vocational
colleges with potential expansion as the support. The Group plans to use
reproducible teaching
models to optimize operation management to schools that we newly invested,
so as to enhance
educational leven and financial returns.
Document: http://n.eqs.com/c/fncls.ssp?u=CBLLGQNBQM [1]
Document title: China New Higher Education 2018 Annual Result Announcement
01/04/2019 Dissemination of a Marketing Press Release, transmitted by EQS
Group.
The issuer is solely responsible for the content of this announcement.
Media archive at www.todayir.com
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=4f789a708070c2d0c416727164818dfd&application_id=793943&site_id=vwd&application_name=news
(END) Dow Jones Newswires
March 31, 2019 21:27 ET (01:27 GMT)
