Hong Kong Exchanges and Clearing : Annual results announcement for the year ended 31 May 2019; and change of directors
08/16/2019 | 07:57am EDT
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
KOOLEARN TECHNOLOGY HOLDING LIMITED
新 東 方 在 綫 科 技 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1797)
ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MAY 2019; AND
CHANGE OF DIRECTORS
The board ("Board") of directors ("Directors") of Koolearn Technology Holding Limited ("Company") is pleased to announce the consolidated results of our Company and our subsidiaries (collectively, our "Group") for the financial year ("FY") ended 31 May 2019 ("Reporting Period"). These annual results have been reviewed by our Board's audit committee ("Audit Committee").
In this announcement: (a) "we", "us", and "our" refer to the Company and where the context otherwise requires, the Group; and (b) our consolidated financial statements are presented in Renminbi ("RMB") unless otherwise stated, which is our Group's primary functional currency.
All other capitalised terms will have the same definitions as in our Prospectus of 15 March 2019 ("Prospectus") unless otherwise stated.
ANNUAL RESULTS AND ANNOUNCEMENT FOR FY 2019
(Loss) profit for the year
Total comprehensive (expense) income
- Owners of our Company
- Non-controlling interests
(Loss) earnings per share
- Basic and diluted (RMB)
Non-IFRS measure: Adjusted (loss)
profit for the year1
Non-IFRS measure: EBITDA2
BUSINESS OVERVIEW AND OUTLOOK
We are a leading online provider of extracurricular education services in China with a comprehensive portfolio of well-recognised brands known for high-quality courses and content, with core expertise in online after-school tutoring and test preparation. We strive to become a lifelong learning partner, empowering students to achieve their full potential. We provide our courses and products through different online platforms and mobile applications in multiple formats across three core segments, namely our college education, K-12 education and pre-school education segments.
Adjusted (loss) profit for the year represents (loss) profit for the year less gain on disposal of a joint venture and gain on fair value changes of long-term investments designated as fair value through profit or loss ("FVTPL")/financial assets at FVTPL plus listing expenses and share-based compensation expenses for the year.
Earnings before interest, taxes, depreciation, and amortisation ("EBITDA") represents (loss) profit for the year plus income tax credit (expenses), listing expenses, share-based compensation expenses and depreciation of property and equipment less other income, gains and losses and (impairment losses, net of reversal) reversal of impairment losses, net of impairment on trade receivables for the year. The reclassification of (impairment losses, net of reversal) reversal of impairment losses, net of impairment on trade receivables and, consequently, the change in the definition of our EBITDA, was due to our application of IFRS 9 on 1 June 2018.
The table below sets forth, for the years indicated, the number of student enrolments in each type of our course offerings:
The table below sets forth, for the years indicated, average spending per enrolment in each type of our course offerings:
Our performance overview
Overall financial performance
We achieved significant growth in terms of net revenues and student enrolments across all four business segments during the Reporting Period. Our total net revenues increased by 41.3% from RMB650.5 million in FY 2018 to RMB918.9 million in the Reporting Period. In the college education segment, we recorded RMB631.4 million in net revenue, representing a year-on-year growth of 36.5%. In the K-12 education segment, successful execution of our growth strategies led to extraordinary growth in this highly competitive market. Our net revenue and student enrolments in the K-12 segment increased year-on-year by 80.8% and 209.2%, respectively. In the pre-school education segment, we optimised our product offerings that increased the average spending per student from RMB43 to RMB185, leading to a year-on-year growth of 205.8% in net revenue.
Our courses in the college segment consist of courses for college test preparation, overseas test preparation, English language learning, and other courses. Our courses are primarily used by college students and working professionals preparing for standardised tests or seeking to improve their English language proficiency. During the Reporting Period, our performance in the college segment continued to grow steadily. Our student enrolments in the college segment recorded 1.3 million in the Reporting Period, representing an increase of 11.7% over the previous fiscal year.
Our comprehensive K-12 course offerings, including primarily Koolearn K-12 courses and location- based live interactive after-school tutoring courses ("DFUB"), provide after-school tutoring courses that cover the majority of standard school subjects from primary and high school in China. We also offer preparation courses designed for standardised high school and national college entrance exams. Our courses are carefully designed for K-12 students taking standard education courses in primary and high school in China.
During the Reporting Period, we implemented a series of initiatives to accelerate the expansion of our K-12 segment and achieved outstanding operating results in our K-12 segment. Our student enrolments for overall K-12 segment recorded year-on-year growth of 209.2%. More specifically, our student enrolments for Koolearn K-12 courses recorded year-on-year growth of 188.3%, and our student enrolments for DFUB courses grew year-on-year by 316.1%. Our growth in K-12 education during the Reporting Period was largely attributable to the successful execution of our growth strategies in this segment. In the summer of 2018, we introduced a modified version of the "dual-teacher model", which was applied to all of our K-12 courses on the Koolearn platform, strengthening our content development and customer services, and leading to increased student enrolments. We accelerated the expansion of DFUB business during the Reporting Period and continued to optimise the operations of DFUB courses in each city. As at 31 May 2019, DFUB had entered 63 cities across 15 provinces in China.
Our pre-school education segment offers inspiring and interactive English learning and other pre-school education courses designed specifically for children between the ages of three and ten. Our child-friendly online educational content are delivered through our Donut English-learning app and Donut live online English classroom courses, both of which achieved significant growth during the Reporting Period.
Strategic update and future development
Going forward, we will continue our long-term growth strategies to increase student enrolments by increasing the retention of our existing students and the acquisition of new students. We plan to optimise our products and course offerings across each education segment through developing and refining our content. We will continue to invest more in recruiting, retaining, training and promoting high-calibre teaching, course research and marketing staff. To achieve this, we expect to establish a strong central platform to enhance our office automation system, in an effort to systematically discover and nurture high-calibre teaching staff, establish class scheduling and teaching administration, and improve marketing efficiency through new logo and branding activities, diversified media channels, integrated marketing resources with performance-oriented precision marketing.
In the K-12 segment, we established a teaching training center in Wuhan to ensure a continuous supply of qualified teachers for DFUB in FY 2019. We also optimised user experience on DFUB platform by introducing more online features such as parents' classrooms and new students' classrooms. We deepened our cooperation with EEO Education Technology Co., Ltd ("EEO") and other education technology companies to provide students with a better online study experience. In FY 2020, we expect DFUB to expand into more cities and further customize course content based on materials used by local schools. We plan to establish teaching training centres in other geographical locations to attract more qualified teachers and provide more tailored training programs. For Koolearn K-12 courses, we plan to devote more resources to both product and technological development so as to improve the effectiveness and efficiency of online teaching. We will also enhance our target marketing strategies to lower our average user acquisition cost.
In our college segment, we have taken various steps to strengthen our market leading position. We continuously enhance our development and increase our portfolio of courses in subjects other than English, our strongest subject. In FY 2020, we will introduce more high-quality courses aimed at enhancing the efficiency of our online test preparation. We will also explore our "dual-teacher model" and tailor it for application in preparation courses for graduate school entrance exams. In our overseas test preparation segment, we will continue to collaborate closely with providers of overseas English tests such as Educational Testing Service ("ETS"). As a growing number of Chinese students take Scholastic Assessment Test ("SAT") and Graduate Record Exams ("GRE") outside China, we will also optimise our SAT and GRE preparation courses to better meet their study needs.
This is an excerpt of the original content. To continue reading it, access the original document here.
HKEx - Hong Kong Exchanges and Clearing Ltd. published this content on 16 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 August 2019 11:56:04 UTC