EQS-News / 24/03/2020 / 14:54 UTC+8
China New Higher Education Group Announces Results for FY2019
Total Revenue Increases 72.2% to RMB1,252 Million; Net Profit Grows 69.3%
Student Enrollment Up 21.3%; Strong Results Growth
(Hong Kong, March 24, 2020) China New Higher Education Group Limited ("China
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 2019 ("Review Period").
The Group's Position
· Practitioner of Collectivized School Operation: Established in 2005, the
Group has now formed a replicable collectivized school operation model.
· The propeller of application-oriented Universities: The Group is the
initiator and vice-chairman unit of the Association of Universities
(Colleges) of Applied Science of the MOE.
· Leader of High-quality Employment: The Group won the title of the Top 50
National Employment of the MOE, with an average employment rate of above
97%.
· Pioneer of Cross-regional Layout: The group started to operate schools
in different provinces since 2009, and has built a network of schools in 7
provinces and regions in China.
· Forerunner of Organic Growth: The Group's total number of student
enrollment increased by 21.3% yoy, with a continuous increase in student
enrollment and tuition fees.
Financial Highlights
· Total revenue amounted to RMB1,252 million, up 72.2% yoy
· Gross Profit amounted to RMB543 million, up 89.9% yoy
· Profit before tax amounted to RMB486 million, up 75.5% yoy
· Net profit amounted to RMB430 million, up 69.3% yoy
· Net profit attributable to owners of the parent amounted to 386 million,
up 58.8% yoy
· A proposed final dividend of RMB0.032 per share, up 68.4% yoy
Business Highlights
· In the 2019/2020 academic year, the Group's student enrollments totaled
over 113,500, up 21.3% yoy;
· The average employment rate for graduates reached 97.35% and
high-quality employment rate reached 38.48%;
· The Group consolidated financial statements for the Guangxi Schools and
Central China School in 2019, expanded the Henan School by 500 mu with
over 27,000 student enrollments, and completed the construction and
relocation of the Gansu School within only one year;
· In the 2019/2020 academic year, the Group was enabled to add 24 new,
popular majors, mainly on arts, engineering, and medicine;
· Around 1,700 students have won close to 500 awards in subject
competitions;
· The Group has 1,000 experimental training bases on and outside its
campuses, among which 164 were added in 2019, including 40 internal
experimental training rooms and 124 external practice bases;
· The Group steadily pushed forward with international collaboration by
signing cooperation agreements with 17 overseas schools in countries
including the UK, the US, Germany, and Canada; with international students
from 34 countries studying and exchanging in the schools.
Founder of the Company and Chairman of the Board Mr. Li Xiaoxuan said:
"Since our listing, we have been taking solid steps in the capital market
and delivering satisfactory results with supports from our investors and the
society. In 2019, the Group realized growth from dual drivers, enhanced the
quality of education and employment and successfully merged the acquired
universities, achieving steady growth in all its businesses.
Also, we paid attention to improving our teaching and digitalization and
digitalized our teaching, management, services and safety measures. During
COVID-19 outbreaks, TronClass, an online education platform combining
teaching, learning, management and assessment functions, has played a
prominent role in meeting online teaching and learning needs and accumulated
over 40 million visits.
Looking ahead, we expect growth and plenty of room for value increase,
thanks to favorable policies and the potential geographical advantages of
our schools. We shall seize the opportunities to achieve synergy and rely on
our growth strategy which prioritizes organic growth and pursues business
expansion to swiftly improve operational efficiency and profitability,
diversify our sources of revenue, bringing greater value for our
shareholders."
Financial Analysis
In 2019, the Group's revenue increased 94.1% to RMB1,089 million, tuition
fee increased 92.2% to RMB984 million, and the boarding fee increased 114.3%
to RMB105 million, reflecting the increases in its student number, tuition
fees, and boarding fees. Additionally, the Group's training and logistics
revenue grew 65.2% yoy to RMB114 million. The advantages of the Group's
collectivized operation have emerged and a diversified revenue structure has
gradually taken shape.
The Company continuously optimized its cost structure and increased its
teaching input, with its major business constituting 71% of the total costs
in 2019, up from 61% in 2018, which showed constant improvement in teaching
quality; on the other hand, the proportions of items such as management fees
and financing expenses decreased from last year.
In 2019, the Company's profitability reached a new high. The gross profit
increased 89.9% yoy to RMB542 million; EBITDA increased 63.2% yoy to RMB717
million; net profit attributable to owners of the parent company increased
58.8% yoy to RMB386 million, and the proposed final dividend increased 68.4%
yoy to RMB0.032. Significant increase in shareholder returns.
The Company's total capital doubled and level of liability decreased by
half, with the total capital of the Company grew more than doubling yoy by
153.5% to RMB1,047 million, Net interest-bearing liabilities decreased 49.8%
yoy to RMB439 million, and net interest-bearing debt/total equity ratio
improving remarkably by decreasing from 38.3% in 2018 to 14.9%, which showed
noticeable improvement in weighted average interest rate, 100 bps lower yoy.
Business Review
Focusing on the teaching quality
In 2019, to answer the calling of MOE, the Group repeatedly increased its
input into education. The Group was enabled to add 24 new, popular majors,
mainly on arts, engineering, and medicine; based on the OBE (Outcomes-based
Education) model, the Group enhanced its course research; the Group
organized more than 100 teacher training sessions to establish a team of
dual-qualified teachers, resulting in 2 first prizes and 7-second prizes
from provincial teaching competitions; Also, approximately 1,700 students of
the Group participated in various types of academic contests in 2019 and won
nearly 500 awards and honors, including the Special Award (???) and Best
Innovation Award (?????) from the National Finals of the 9th China National
College Student "Innovation, Originality and Entrepreneurship" Challenge
national finals grand prize (???????????????????????????) and National
Top-class Award (?????) from the 3D Design Show (Elite League)
(?????????????(????)); Finally, the Group continued to push forward with
international cooperation by signing agreements with 17 overseas schools or
organizations in countries including the UK, the US, Germany, and Canada;
with international students from 34 countries studying and exchanging in the
schools.
Bolstering the employment quality
In 2019, the Group trained innovative talent and deepened industry-education
integration, leading to a drastic increase in employment quality. It further
promoted a high-paid talent training model with pilot classes (such as the
college of excellence and Talent Class program), bringing about an average
employment rate of nearly 100% and an annual salary of above RMB75,000, far
higher than the market average. With its schools collaborating with more
than 10,000 employers such as Huawei, Alibaba, State Grid Corporation of
China, and China State Construction, the Group boasted an average graduate
employment rate of 97.35% and high-quality employment rate of 38.48%
(renowned companies, continued education, and civil service positions).
Raising the level of digitalization
In 2019, the Group implemented digital teaching, management, services and
safety measures:
For digital teaching, the Group combined cloud technologies to establish
TronClass, an online education platform combining teaching, learning,
management and assessment functions, which has played a prominent role
during the COVID-19 outbreaks in meeting online teaching and learning
demands and recorded over 40 million visits.
Regarding digital management, the Group established its computing center,
data center, and safety center with help from Alibaba Cloud and applied the
products of a renowned management software provider, Yonyou,to upgrade its
ERP resources management system.
As for digital services, the Group independently developed the
teacher-student digital integrated service platform using micro-frontends,
big data and cloud computing structures, providing teachers and students
with integrated services - including academic results, exam registration,
fee payment, teaching, and learning assessment, apartment repair, and
suggestions and advice-recorded more than 15 million times.
Concerning digital safety measures, the Group cooperated with major market
player Hangzhou Hikvision Digital Technology Co., Ltd. in comprehensively
managing campus personnel safety, fire safety, food safety, campus traffic
safety, etc. with emerging technologies such as face recognition, big data,
and behavior recognition, achieving zero major safety accidents.
Outlook
The Company will continue to take advantage of its strengths in the
collectivized operation of schools and implement its two-wheels-driven
development strategy. For Organic Growth, the Group will further enhance the
quality of its teaching, employment, management, and services expand its
sources of revenue and focus on light assets, to make the demand side more
scientifically, the user side more efficiently, the input side more
reasonably and the income side more effectively. Regarding Value Investment,
the Group will stick to the principle of "Precision, Stability and
Collectivized Operation" in promoting higher education, It will also look
for quality targets in regions with a low gross enrollment rate, high
student demand and great potential for future development; for newly
acquired schools, the Group will make good use of its strength of sharing
resources and promote both synergy and innovation in a host of areas through
support from sources including digital platforms, to further solidify its
financial foundation and markedly increase the overall post-investment
benefits.
The Group proactively invested in 5 colleges and universities before and
after the listing, the acquisition cost is far below current market price,
showing evident first-mover advantages; with effective group management and
the obvious post-investment integration effects of the acquired schools, the
Group currently has more than 113,500 enrolled students, ranks third among
listed higher education groups in Hong Kong, and shows notable improvement
in teaching, employment quality, revenue and profit of its invested schools.
The Group's development strategy of focusing on organic growth and pursuing
business expansion has been validated; benefiting from the recent
introduction of favorable policies for higher education, and the locations
of the Group's schools in regions with a low gross enrollment rate, scarce
education resources, and huge growth potential, the Group expects to see
future growth and continue receiving support from local governments; The
Group will experience continued high-quality improvement in its business
performance in the future, and there is huge room for valuation improvement.
- End -
About China New Higher Education Group Limited:
China New Higher Education Group Limited is a leading private formal higher
education group in China with nearly 20 years of education industry
experience, specializing in providing higher education which focuses on
applied sciences. The Group endeavors to help each student maximize his or
her potential and live his or her life to the fullest. Since 2009, the Group
has been operating schools in different provinces and regions, and its
current school network covers 7 provinces in China, including Yunnan,
Guizhou, Hubei, Heilongjiang, Henan, Guangxi, and Gansu.
The Group provides high quality higher education in a wide selection of
fields in applied sciences. Its courses are designed to equip students with
practical and readily applicable skills, helping to prepare them for the job
market. As a leader in high-quality employment, the Group won the title of
the Top 50 National Employment of the MOE, with an average employment rate
of above 97%. The Group became a constituent stock of the Hang Seng
Composite Small Cap Index and the Hang Seng Consumer Goods & Services Index
in the Hang Seng Composite Index Series in August 2017, and was included as
a constituent stock of the MSCI China Small Cap Index in November 2017 and
included as a constituent stock of Shenzhen and Hong Kong Stock Connect in
March 2018.
This press release is distributed by Wonderful Sky Financial Group Limited
on behalf of China New Higher Education Group Limited.
For further information, please contact:
Wonderful Sky Financial Group Limited
Aileen Wang / Georgina Zhao
Tel: (852) 3970 2226/ (852) 3970 2236
Email: newhigheredu@wsfg.hk
Document: https://eqs-cockpit.com/c/fncls.ssp?u=TETEMCJDXT [1]
Document title: China New Higher Education Group Announces Results for
FY2019 Total Revenue Increases 72.2% to RMB1,252 Million; Net Profit Grows
69.3% Student Enrollment Up 21.3%; Strong Results Growth
24/03/2020 Dissemination of a Marketing Press Release, transmitted by EQS
Group.
The issuer is solely responsible for the content of this announcement.
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March 24, 2020 02:54 ET (06:54 GMT)
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