Hailiang Education — Investor Presentation (April 2020)
27 slides from Hailiang Education's investor presentation, Apr 3, 2020
Slide 1: Hailiang Education Group Inc. Investor Presentation March 2020
Hailiang Education Group Inc. (Nasdaq: HLG) Investor Presentation March 2020
Slide 2: Management team and company at a glance
67,821 Students 38 Schools 25 years Ming Wang, Chairman and CEO Mr . Ming Wang is the Chairman and CEO of Hailiang Education (Nasdaq : HLG) . Mr . Wang was awarded the title of “New Economic Person of the Year” in 2017 , Forbes China “Best CEOs of Chinese Public Companies in 2018 ” and “Outstanding
Slide 3: Our School Network
3 Our School Network Established in 1995 42 Schools a cross 7 P rovinces in China Gansu Province GDP: CNY871 Billion USD125 Billion Population: 26 Million Schools:1 Shandong Province GDP: CNY7,107 Billion USD1,015 Billion Population: 100 Million Schools:1 Hubei Province GDP: CNY4,583 Billion USD655
Slide 4: Distinguished Academic Results (1/3)
4 Distinguished, Specialized, and Internationalized Education Brand （ 1/3 ） Distinguished Academic Results 18 of our students placed in Top 20 High school entrance examination of 2018/2019 school year in Zhuji City 4 gold medals and 2 silver medals in national competition 5 first - prize, 18 second
Slide 5: Specialized and Diversified Curricula / Programs (2/3)
5 Distinguished, Specialized, and Internationalized Education Brand （ 2/3 ） Specialized and Diversified Curricula / Programs Art School Workshops for Science Competition Exchange Student Program HSK Programs for Non - Chinese Students Study Trip Camp Courses Japanese, Korean, Spanish Program - Impro
Slide 6: Cooperation with International Partners (3/3)
6 Distinguished, Specialized, and Internationalized Education Brand （ 3/3 ） Cooperation with International Partners Established partnership with more than 200 education institutions and partners globally, and provide a variety of programs for local and international students .
Slide 7: Competitive Advantages
Competitive Advantages 1 Leading One - Stop Integrated K - 12 Education Service Provider 2 Expansion Supported by Asset - light and Management & Operating Approach 3 Group Management to Support Rapid Expansion 4 Sustained Strong Profitability, Steady Cash Flow and Solid Financial Position 7 5 Growin
Slide 8: Leading One-Stop Integrated K-12 Education Service Provider
Study Trip Accommodation Catering Educational Training After - school Enrichment Program Note: A s of June 30, 2019, unless otherwise stated. Ancillary Education Services Overseas Study Consulting 8 Basic Programs International Programs • K - 12 local program studies • Olympics training program • El
Slide 9: Expansion Supported by Asset-light and Management & Operating Approach
Strategic Cooperation K - 12 Schools Rapid Expansion Build/ Acquire/ Entrust Build / Acquire/ Operate (Entrust/ Lease) 9 Date Expansion of school network July 2019 Operate and manage 1 public school in Jiangsu province July 2019 To sponsor “Lanzhou Hailiang Experimental School” in Lanzhou province N
Slide 10: Group Management to Support Rapid Expansion
10 Full Range - Academic Programs 3 Group Management to Support Rapid Expansion Well known Brand to get more external supports 10 schools under central management 23,630 students and 2,129 teachers/staffs Year 1 - Year 13 Basic program, Int’l program, Art program, University foundation program Top 5
Slide 11: Revenue by Business Stream
36,395 144,188 59,829 43,393 FY2017 FY2018 FY2019 FY2019H1 FY2020H1 YOY Growth: 296.2% Educational training services (RMB’000) 11 K - 12 Educational Services (RMB’000) 657,915 764,165 805,693 355,127 411,742 195,380 329,768 411,314 189,035 212,710 FY 2017 FY 2018 FY 2019 FY2019H1 FY2020H1 Basic educ
Slide 12: Steady Revenue Growth with Diversified Business Streams
Number of students by program Average tuition by program (RMB) 36,299 40,880 44,109 19,692 21,957 69,161 83,170 90,339 41,501 43,606 FY 2017 FY 2018 FY 2019 FY2019H1 FY2020H1 Average tuition of basic educational program Average tuition of international program FY2017 - 2019 CAGR Basic: 10.2% Int’l:
Slide 13: Sustained Strong Profitability
13 ROE* 15% 17% 18% 7% 11% FY 2017 FY 2018 FY 2019 FY2019H1 FY2020H1 Net Profit （ RMB ‘000 ） 167,743 230,902 315,780 129,582 197,637 FY 2017 FY 2018 FY 2019 FY2019H1 FY2020H1 36.8% 37.7% YOY Growth EBITDA （ RMB ‘000 ） 271,998 394,024 533,078 FY 2017 FY 2018 FY 2019 EBITDA Margin 32% 34% 36% 35% 42%
Slide 14: Steady Cash Flow and Solid Financial Position
14 Net cash generated from operating activities （ RMB ‘000 ） 286,953 587,931 690,317 646,850 476,103 FY 2017 FY 2018 FY 2019 FY 2019H1 FY 2020H1 Debt* Asset Ratio 21% 29% 33% 33% 36% 20170630 20180630 20190630 20181231 20191231 * Liabilities mainly include fees received in advance and accrued payrol
Slide 15: Growth Strategies
Growth Strategies 15 Focus on building our brand and reputation as a global leading K - 12 education integrated service provider Strengthen our market leadership by increasing education quality and scale while improving academic performance Focus on quality K - 12 education training and develop onli
Slide 16: Appendix: Industry Overview
Appendix 1 Industry Overview 行业概览
Slide 17: Market Size Empowered by China's Urbanization
17 Market Size Empowered by China’s Urbanization Data Source: Wind Data Source: Wind
Slide 18: Growth Potential Demonstrated by Enrollments of Private K-12 Education Market
18 Growth Potential Demonstrated by Enrollments of Private K - 12 Education Market Top Private Education Group in China Student Enrollments 2 Percentage against Total Enrollments of China Private Education Hailiang Education (East area) 67,821 （ 2019.12.31 ） Total enrollments of six leading private
Slide 19: Demand of International Education in China
19 Demand of International Education in China 19 Total Number of Student Enrollments of International and Bilingual Private Schools (China), 2013 – 2022E Note: Data are derived from Frost & Sullivan report in 2018 Unit: RMB 115,244 108,189 101,583 95,368 89,530 84,082 78,495 73,315 67,973 62,777 0 2
Slide 20: Demand of Online Education in China
20 Demand of Online Education in China 20 Data Source: Wind Data Source: Wind
Slide 21: Status of Private Education Industry Policy
21 Status of Private Education Industry Policy The private schools can choose to establish non - profit or for - profit private schools . However, compulsory education may be not allow to establish the for - profit schools . The 19 th To implement the national strategy of promoting the healthy devel
Slide 22: Appendix: Financial Statements
Appendix 2 Financial Statements 财务报表
Slide 23: Income Statement
Income Statement 23 Fiscal year ended on June 30 For 6 months ended on December 31 (In thousands of RMB, except for EPS) 2017 2018 2019 2018 2019 Revenue 853,295 1,169,348 1,499,025 652,715 736,676 Cost of revenue (645,757) (804,674) (1,026,903 ) (454,983) (498,878) Gross profit 207,538 364,674 472,
Slide 24: Balance Sheet
Balance Sheet As of June 30 As of December 31 (In thousands of RMB) 2018 2019 2019 Property and equipment, net 679,081 620,623 625,084 Intangible assets and goodwill, net 78,747 99,525 98,860 Right - of - use assets — — 530,435 Contract costs — 9,899 13,963 Prepayments to third party suppliers 92 94
Slide 25: Cash Flow Statement
Cash Flow Statement Fiscal year ended on June 30 (In thousands of RMB) 2017 2018 2019 Net profit for the year 167,743 230,902 315,780 Adjustments for: Depreciation 110,485 113,128 132,026 Gain on disposal of affiliated entities — (5,349 ) — (Gain)/loss on the disposal of property and equipment (41)
Slide 26: Disclaimer
Disclaimer This presentation has been prepared by Hailiang Education Group Inc . (Nasdaq : HLG) (“ Hailiang Education” or the “Company”) solely to facilitate the understanding of the Company’s business model and growth strategy . The information contained in this presentation has not been independen
Slide 27: Contact
Contact Ascent Investor Relations LLC Tina Xiao Email: tina.xiao@ascent - ir.com Tel: +1 - 917 - 609 - 0333 Address: 733 3rd Avenue 16th Floor, New York, NY 10017, USA Hailiang Education Group Inc. Litao Qiu Email: ir@hailiangeducation.com Tel: +86 571 5812 - 1974 Address: 1508 Binsheng RD, Binjiang
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