Minsheng Education Group Co. Ltd. · HKEX:1569
Minsheng Education — H1 2020 Earnings Presentation
43 slides from Minsheng Education's earnings presentation, 2020
Slide 1: Minsheng Education Group First Half 2020 Results
Stock Code: 1569 MINSHENG EDUCATION GROUP FIRST HALF 2020 RESULTS
Slide 2: Disclaimer
DISCLAIMER This document does not constitute an offer or invitation to purchase or subscribe for any shares. No part of this document should be the basis or reliance on any form of contract, commitment or investment decision. The information contained in this document is for your reference only. Suc
Slide 3: Contents
CONTENTS 01 02 03 04 05 PERFORMANCE INVESTMENT MINSHENG FUTURE APPENDIX REVIEW HIGHLIGHTS AT A GLANCE PROSPECTS
Slide 4: Performance Review
PART ONE vwroe()1 = PERFORMANCE REVIEW
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS In the 1st half of 2020, the Group has a realized strong organic growth, with a YoY increase of 16.1% in profit for the reporting period and a YoY increase of 32.8% in profit for the reporting period after adding back deferred tuition, marking the highest organic growth since th
Slide 6: Operational Highlights
OPERATIONAL HIGHLIGHTS Total Number of Students Distribution of Students : On-campus Education (As of June 30 ) (As of June 30, 2020) 127,824 7.3% 2.7% 84,821 74,450 28.1% 61.9% 43,444 32,515 2017 2018 2019 2020 Junior Adult High No. of on-campus No. of online students (under Undergraduate School/Se
Slide 7: Revenue & Cost of Sales
REVENUE & COST OF SALES Revenue In RMB thousands Cost of Sales In RMB thousands (For the six months ended June 30) (For the six months ended June 30) 219,868 235,905 576,735 14.2% 19.4% +9.6% 34,000 10.3% 8.2% +3.1% 542,735 20.0% 18.6% 526,397 53.8% 55.5% 1H 2019 1H 2020 1H2019 1H2020 Revenue Deferr
Slide 8: Gross Profit and Gross Profit Margin
GROSS PROFIT AND GROSS PROFIT MARGIN In RMB thousands Gross Profit Gross Profit Margin In RMB thousands (For the six months ended June 30) (For the six months ended June 30) 340,830 +11.2% 59.1% 34,000 +0.1% 306,830 58.2% 306,529 56.5% 1H 2019 1H 2020 1H 2019 1H 2020 Gross Profit after Gross Profit
Slide 9: Profit for the Period & Adjusted Net Profit
PROFIT FOR THE PERIOD & ADJUSTED NET PROFIT Profit for the Period In RMB thousands Adjusted Net Profit In RMB thousands (For the six months ended (For the six months June 30) ended June 30) 270,420 285,086 +22.5% +32.8% 34，000 34,000 +16.1% 236,420 +7.8% 251,086 251,086 203,674 232,818 1H 2019 1H 20
Slide 10: Assets
ASSETS Total Assets In RMB thousands Net Assets In RMB thousands (As of June 30) (As of June 30) 7,301,227 7,077,602 +3.2% 4,216,431 3,870,793 +8.9% 1H 2019 1H 2020 1H 2019 1H 2020 9
Slide 11: Solid Cash and Financial Position
SOLID CASH AND FINANCIAL POSITION RMB 1. 3 Billion 16% The Group has strong cashflow. As of June 30 2020, the The Group's financial position was healthy and stable. As of balance of cash and bank deposit was approx. RMB 1.31 June 30 2020, the Group's net gearing ratio was approx. billion. 16.01%, a
Slide 12: Suspending Schools Without Suspending Learning
SUSPENDING SCHOOLS WITHOUT SUSPENDING LEARNING Organize Online Teaching and Learning from home Fulfilling Social Responsibilities and Donating Pandemic Prevention Materials Our schools have taken effective prevention and control measures To combat the COVID-19 pandemic, the Group donated supplies an
Slide 13: Investment Highlights
PART TWO INVESTMENT HIGHLIGHTS
Slide 14: Investment Highlights
INVESTMENT HIGHLIGHTS 1. Consistent Growth of On-Campus Education Business 2. Strong Pipeline of 5. Quality Education with M&A Projects High Reputation 3. Major Breakthrough in 6. Experienced Online Education Management Team Business 4. Diversified Sources of 7.7. Stable Long-term Dividend Financing
Slide 15: Chongqing College of Humanities, Science & Technology
Consistent Growth of on-Campus Education Business Chongqing College of Humanities, Science & Technology The first and only independently-established private undergraduate college in the city of Chongqing approved by Number of Enrolled Students government. It has been successfully converted from a pu
Slide 16: Dianchi College of Yunnan University
Consistent Growth of on-Campus Education Business Dianchi College of Yunnan University A top ranked 5-star independent college in China Dianchi College of Yunnan University is preparing for the Number “Conversion of Independent College”. The college has （ i ） of Enrolled Expected growth of 12% stabi
Slide 17: Pass College of Chongqing Technology and Business University
Consistent Growth of on-Campus Education Business Pass College of Chongqing Technology and Business University Pass College is an independent college of Chongqing Technology and Business University. It will be renamed as "Chongqing College of Economics“ after the completion of conversion. Pass Colle
Slide 18: Junior Colleges
Consistent Growth of on-Campus Education Business Junior Colleges The Group now has four junior colleges in Chongqing, Shandong and Inner Mongolia Autonomous Region. As of June 30 2020, the number of students enrolled in Qufu Fareast Vocational and Technical College was 10,604, an increase of 91% Yo
Slide 19: Nanchang Vocational University
Strong Pipeline of M&A Projects Nanchang Vocational University Nanchang Vocational University is one of the first 15 pilot colleges for undergraduate vocational education reform in Key Drivers of Growth China, and it is an independently established undergraduate vocational college. The changes of sp
Slide 20: Anhui Wonder University of Information Engineering
Strong Pipeline of M&A Projects Anhui Wonder University of Information Engineering Anhui Wonder University of Information Engineering is an independently established private undergraduate Key Drivers of Growth college. Aim to complete the M&A in the 1st half of 2021. Enrollment Growth As of June 30
Slide 21: Anhui Sky Aviation International Flight Academy
Strong Pipeline of M&A Projects Anhui Sky Aviation International Flight Academy A CCAR-141 flight training academy certified by the Civil Aviation Administration, which has been approved for courses of private licenses, commercial licenses and so on. Aim to complete the M&A in the first half of 2021
Slide 22: Qufu Fareast Vocational and Technical College
Strong Pipeline of M&A Projects Qufu Fareast Vocational and Technical College Qufu Fareast Vocational and Technical College is a higher vocational college located in Qufu City, Shandong Province. Aim to complete the M&A by 2021. Expanding recruitment and new campus construction will lead to sustaine
Slide 23: Overview of Online Education Brands
Major Breakthrough in Online Education Business OVERVIEW OF ONLINE EDUCATION BRANDS Three online education brands & over 140 partner colleges and universities, providing services to nearly 10 million students and users Courses Partnered Network Number of Ownership Offered College Covered Students/Us
Slide 24: Growth Drivers of Online Education Business
Major Breakthrough in Online Education Business Growth Drivers of Online Education Business If M&A is finalized, revenue +37.8% from online business will be increased by OMO +28% 2 Billion RMB Empower Education with Technology +25.6% · Merge offline and online curriculum Consolidation of M&A Transac
Slide 25: Diversified Financing Channels
Diversified Financing Channels DIVERSIFIED FINANCING CHANNELS Diversified Actively expanding sources of Low Costs financing to obtain lower funding cost through debt and equity financing. Providing long term and stable funding support for business development. Cost of new debt inside and outside Chi
Slide 26: Quality Reputation of Schooling
Quality Education with High Reputation QUALITY REPUTATION OF SCHOOLING Top National Comprehensive Ranking Top Ranking by Majors in China Dianchi College of Yunnan University ranked 10th The law major of Dianchi College of Yunnan University Top 10 in the "2019 Comprehensive Strength Ranking of Compre
Slide 27: Experienced Management Team
Professional and Efficient Management Team EXPERIENCED MANAGEMENT TEAM Mr. LI Xuechun Mr. ZUO Yichen Mr. LIN Yilong President and Executive Director Financial Controller and Executive Founder and Chairman of the Board Director Responsible for the Group's overall Responsible for the strategic develop
Slide 28: Long-term Stable Dividend Distribution Strategy
Long-term Stable Dividend Distribution Strategy LONG-TERM STABLE DIVIDEND DISTRIBUTION STRATEGY The Company desires to maintain a long term stable dividend strategy and share the increase in value of Minsheng with its shareholders In March 2020, the Board of Directors of the Group declared a final d
Slide 29: Minsheng at a Glance
PART THREE MINSHENG AT A GLANCE
Slide 30: Our Business Roadmap
OUR BUSINESS ROADMAP The Company operates and manages 10 schools in Chongqing, Yunnan, Shandong and Inner Mongolia Autonomous Region We are one of the largest operators of private universities and colleges in China The Company is listed on the main board of the Hong Kong Stock Exchange Included in S
Slide 31: On-Campus Education
ON-CAMPUS EDUCATION One of the largest Giving priority to undergraduate private higher education education and developing in the group in China direction of graduate education The Company’s on-campus network covers Chongqing, As of June 30, 2020, the number of Yunnan, Shandong, Inner Mongolia, Anhui
Slide 32: On-Campus Education School Network
Existing Campus Education Schools of the Group ON-CAMPUS EDUCATION SCHOOL NETWORK Chongqing College of Humanities, Inner Mongolia Fengzhou Vocational Science & Technology College (Qingcheng Branch) Qufu Fareast Vocational and An independently established private Higher vocational college Technical C
Slide 33: Schools to Be Consolidated
Schools to be consolidated ON-CAMPUS EDUCATION SCHOOL NETWORK Anhui Wonder University of Information Engineering An independently established private university Providing 35 undergraduate and 22 junior collegemajors Number of students: about 10,594 Anhui Hefei Information Engineering School Technica
Slide 34: Online Education
ONLINE EDUCATION Degree Granting Education MOOC Education Providing junior college and China's largest on-line IT undergraduate degree granting education platform courses on-line together with partnership universities Continuing Education for Teachers Certificate Training Providing training courses
Slide 35: Online Education Network
ONLINE EDUCATION NETWORK More than 1,600 centers in 31 provinces and autonomous regions The centers are located in 5 provinces, cities and autonomous regions, with more than 13 centers in total Silk Roads 70 online examination centers in China and 9 overseas examination centers 3 Online Education Ab
Slide 36: Future Prospects
PART FOUR FUTURE PROSPECTS
Slide 37: Prospects
PROSPECTS Minsheng Education will use technology to empower education and build a new higher education ecosystem. We strive to grow our business with both off-line and on-line engines, as well as, the opportunities from the merge of them. Minsheng Education will continue to innovate and expand. We a
Slide 38: Appendix
PART FIVE APPENDIX
Slide 39: Appendix I: Our Schools of Campus Education
Appendix I: Our Schools of Campus Education As at June 30, 2020, the Company had 10 schools under its operations or management: No. of Students No. of Students Expected No. of students Expected Tuition for No. Schools Level as of June 30 as of June 30 for 2020-2021 academic 2020-2021 academic 2019 2
Slide 40: Appendix II: On-Campus Education Projects under Merge Agreements
Appendix II: Overview of On-Campus Education Projects under Merge Agreements As of June 30, 2020, the Company has 4 signed campus education merger projects to be completed: Expected No. of Expected tuition for No. of students as No. of students as No. Schools Level students for 2020-2021 2020-2021 a
Slide 41: Appendix III: Summary of Financial Data
Appendix III: Summary of Financial Data Six months Period Six months Period Unit: In RMB thousands By June 30 2020 By June 30 2019 Revenue 542,735 526,397 Gross Profit 306,830 306,529 EBITDA 338,510 304,871 Profit for the Period 236,420 203,674 Adjusted Net Profit 251,086 232,818 Unit: In RMB thousa
Slide 42: Appendix IV: Incentives For Higher Education and Vocational Education
Appendix IV: Incentives For Higher Education and Vocational Education Issued Date Policy Name Summary Starting from 2019, pilot programs will be launched in vocational colleges and application-oriented undergraduate National Vocational Education Reform and universities for the system of "academic ce
Slide 43: Minsheng Education Group Contact Details
Minsheng Education Group Co., Ltd. Minsheng Education Group Co., Ltd. Hong Kong Office Headquarters Office Tel: + 852-3468 5563 Tel: + 86-10-8591 1099 / 8591 1180 ext. 8014 Fax: + 852-3101 1179 Fax: + 86-10-8591 0588 Email: ir@minshengedu.com Email: ir@minshengedu.com Address: Suite 3202A, Floor 32,
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