EQS-News / 27/04/2021 / 15:55 UTC+8
Immediate release 27 April 2021
(Stock code: 2001. HK)
China New Higher Education Group Announces Interim Results of 2021 fiscal year
Total Revenue Increased by 34.1%
Focus on Higher Vocational Education Segment
Cultivate High-quality Technical and Skilled Talents
(April 27, 2021, Hong Kong) China New Higher Education Group Limited ("New Higher Education Group", collectively called
the "Group" together with its affiliated companies; stock code: 2001.HK) is pleased to announce the interim financial
results of the six months ended 28 February 2021.
Financial Highlights
Total revenue amounted to RMB925 million, up 34.1% YoY;
Revenue from principal businesses amounted to RMB787 million, up 29.8% YoY;
Other income and gains amounted to RMB139 million, increased substantially by 65.5% YoY;
Net profit amounted to RMB305 million, up 35.6% YoY;
Net profit attributable to owners of the parent amounted to RMB295 million, up 45.0% YoY;
Adjusted net profit increased substantially by 53.3% YoY;
Adjusted net profit attributable to owners of the parent increased substantially by 64.7% YoY.
Interim dividend declared RMB0.054/ share, up 28.6% YoY;
With sufficient capital reserve, total capital increased substantially and amounted to RMB1.63 billion
Interest-bearing debt/ total asset was 21.1%, reaching historical lowest level
Financing cost reached historical lowest level
Financial Analysis
Leading the Industry with Strong Organic Growth and Diversified Income
During the report period, the total revenue up 34.1% YoY, with other income and gains increased substantially by 65.5%
YoY, which was much higher than the YoY growth of 29.8% of revenue from principal businesses. The diversified
development of the Group was evident that proportion of other income and gains to total revenue was higher than the
industry average.
Enhancement of Cost Structure, Precision Investment, Building Core Competitiveness
During the reporting period, the group improved and increased teaching investment that cost of sales increased by
38.3%, which was higher than the growth rate of total cost. The proportion of the cost of human resources and teaching
increased by approximately 10 percentage points YoY. And the cost of depreciation and amortization decreased by 10
percentage points YoY. Meanwhile, the Group also optimized administrative expenses, finance costs and selling and
distribution expenses, etc.
The Group steadily put forward high-quality development strategy through the strong centralized replication capability,
achieving great quality and great price and building up core competitiveness.
Leading Shareholder Value in The Industry and Continual Improvement of Shareholder's Returns
In the past three years, the organic growth of the Group has been leading among peers. With the solid financial
strength built up, the Group continuously improved and increased investment in teaching which adherence to high-quality
development on one hand. It continuously improved the capital strength to steadily execute M&A and self-founding
projects on the other hand. With the mainstay of strong centralized replication capability, the Group's ROE in 2020 was
ready above industry average which achieved an increase of 4.5 percentage YoY during the reporting period. Meanwhile,
the dividend declared has increased year by year to reward shareholders. The interim dividend declared was RMB0.054/
share, up 28.6%.
Continuous Debt Optimization Various Indicators Achieved Historical Best
With the efforts on expansion of financing channels, control of total debt level, adjustment on the structure and
minimization of cost, the Group's debt level was effectively improved, with various financial indicators achieved
historical best level. For example, the Group's interest-bearing debt/ total assets decreased to 21.1%, short-term debt
to total debt decreased to 35.0%, interest coverage ratio increased to 9.38x. and the weighted average interest rate
decreased by approximately 130 bps compared to 2018, reaching lowest level historically.
Message from the Chairman:
Only by addressing the diversified demands from different entities, can the Group consolidate its position under the
competition in the industry and the market. We adhere to the two-wheel driven development strategy of "organic growth +
value investment" to connect higher vocational education and undergraduate education for the cultivation of talents,
implement the development of vocational education, prioritize the internal development, increase the investment in
school operation, promote the balanced development of scale, quality and structure, determine in the strategy of
high-quality development with internal management, implement the "double effectiveness of economy and society" of value
investment and acquisitions,reserve strong momentum for future development. The Group will create more stable and
sustainable investment return for investors,after continuously exploring the unique advantage of the Group in school
operation, working on the top-level planning, quickly duplicating the model and expediting the release of potential to
improve profitability and maintain reasonable growth of revenue, cultivating more high-quality technical and skilled
talents for society to support the development of economy.
Operational Highlights
Strong Centralized Replication Capability, Successful One-off Conversion of Two Schools in Short Time
Benefiting from the strong centralized replication capability, the newly invested schools of the Group have learned
from the successful experience of well-established schools, including campus construction, team management and internal
control that was copied in accordance with unified standards, and have been established into high-quality ones with
high efficiency. Both Gansu School and Central China School made one-off conversion successfully within a very short
period of time.
Invest One more School in Henan, Driven by Two Wheels of Internal Growth and External Investment
Benefiting from our strong centralized replication capability, the Group invested one more school in Zhengzhou, the
principal capital of Henan Province which has the largest number of candidates for the College Entrance Examination and
the 5th largest GDP in China. The Group will leverage its advantage of centralized replication capability, output its
mature school operation experience and increase investment in terms of talent cultivation, major construction,
school-enterprise cooperation, student enrolment, campus construction, online education, and further improve school
conditions to strengthen the connotation construction, improve the campus environment, quickly unleash the potential of
Zhengzhou School, and further realize high-quality school operation.
Group's Average Employment Reaching 98%, Outstanding Achievement Highly Recognized
Benefiting from the strong centralized replication capability, the Group has explored the typical experience of
employment, even in COVID-19, making the average employment rate of the Group reaching 97.91% in 2020, exceeding the
rate in the same period of 2019 and 7 percentage points higher than the national average level. Many Schools of the
Group delivered speeches in their local employment work conferences and were reported to the Ministry of Education as
typical employment cases. The Group was awarded the National Employment Competitiveness Group in the CCTV.COM Education
Awards in 2020, which was the only education group in China to win the award.
During the reporting period, the Group has newly set up 39 high-wage classes and established in-depth cooperation with
more than 1,500 leading enterprises in industries covering Huawei, JD.com and ByteDance and others to achieve effective
linkage between employment departments and schools, graduates and enterprises. Meanwhile, the Group has established
Yangtze River Delta Regional Career and Innovation Center to connect with a large amount of quality local employment
resources, and the star employment rate in 2020 doubled as compared with the same period of last year.
Diversified Financing Channels to Support Value Investment
The Group completed the issuance of USUSD100 million of convertible bonds and approximately USUSD30 million of top-up
placement, making it the first simultaneous issuance of convertible bond and placement transaction in the Asia-Pacific
education sector during the reporting period. In April 2021, the Group established an trust plan with RMB2 billion,
providing an investment and financing platform for the Group to further expand its self-founding and M&A projects, and
targeting the private higher vocational education industries in the PRC.
Core Strength
Since the establishment of the Group in 2005, it deeply explores the best practices from all aspects and has formed
replicable brand recruitment strategy and talent cultivation system; through innovation of employment ways, the Group
has entered into strategic cooperation with famous enterprises to jointly cultivate application-oriented talents; the
Group continues to improve the campus environment, enhances the student-teacher experience, and promote the rapid
replication of management, teaching, service and safety led by informatization at the same time. Through controlling
and empowering by the Group, the newly invested schools achieved remarkable results after investment compared with
before.
Replication of student recruitment strategy
The Group has implemented an "online and offline brand enrollment" strategy to organize its Schools to launch
enrollment promotions in nearly 1,000 key high schools, and strengthened "online promotions" to expand the visibility
and reputation of the schools. In 2021, Gansu School has doubled quotas of students enrolled through junior college to
bachelor degree transfer programs granted last year.
Replication of teaching models (MORE TO FOLLOW) Dow Jones Newswires
April 27, 2021 03:56 ET (07:56 GMT)
