EQS-News / 01/12/2020 / 10:25 UTC+8
Immediate release 1 December 2020
(Stock code: 2001. HK)
China New Higher Education Group Announces 2020.831 New Fiscal Year Results
Continuous Strong Organic Growth
Expected External Contributions in the Future
Huge Room for Valuation Improvement
(December 1, 2020, 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
financial results of the fiscal year ended 31 August 2020 (the "Review
Period"). For the 2019/2020 academic year, the total revenue increased by
69.6% year on year, the gross profit increased by 97.5% year on year, the
net profit increased by 124.3% year on year, the net profit attributable to
owners of the parent increased by 127.3% year on year, the organic growth
has been going strong, which maintains a leading growth rate in the country.
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 one of
the initiators 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.
· Pioneer of Cross-regional Layout: The Group started to operate schools
in different provinces in 2009, and has built up its school network in 7
provinces in China.
· Forerunner of Organic Growth: The Group's organic growth rate has
remained stable at around 20% over the past three years, leading the
industry
Financial Highlights
· The total revenue amounted to RMB1.46 billion, up 69.6% YoY;
· The gross profit amounted to RMB620 million, up 97.5% YoY;
· The profit before tax amounted to RMB550 million, up 127.2% YoY;
· The net profit amounted to RMB480 million, up 124.3% YoY;
· The net profit attributable to owners of the parent amounted to RMB430
million, up 127.3% YoY
*On 29 July 2020, the Group announced to change its financial year-end date
from 31 December to 31 August. In order to provide meaningful comparative
information, the Company prepared pro forma financial information covering
the twelve-month ended 31 August 2019 and 31 August 2020.
Business Highlights
· Strong organic growth: In the 2020/2021 academic year, the Group's
student enrollment was up nearly 11% year on year, which totaled over
125,600. Following the continuous enrollment expansion in higher
vocational education, the total number of enrolled students of the Group
will be further increased; The compound annual growth rate of the student
enrollment is 32.3% during the past three years;
· Internal acquisition first followed by external: Internally completed
the further acquisitions of minority interests in Henan School and Guangxi
Schools; Externally acquired the stake in a training institution (Yunnan
Vocational School);
· Sufficient capital reserves: Completed the issuance of USD 100 million
of convertible bonds and approximately USD30 million of top-up placement.
The coupon rate was only 1%, the conversion premium rate was 18%, and it's
one of the lowest discounts in the industry of the year;
· Online education plan: the Group foreseed the future of digital
technology years ago and then strategically planned the online education
and teaching platform before the outbreak of the epidemic;
· Actively respond to the epidemic: During the public health event period,
none of the teachers nor students were infected in the Group; upgraded
online education and teaching platform to meet the online education demand
of all the teachers and student, with the number of clicks reaching 400
million. The number of courses built on the online teaching platform is
over 4,000, which responded to the advocacy by the government and
educational authorities, realizing the principle of "delay backing to
school, no delay in teaching and learning".
Financial Review
"Two-wheel driver" of organic growth and value investment, major businesses
continue to rise: In the 2019/2020 academic year, revenue from principal
businesses (after restoration*) amounted to RMB1.33 billion, representing an
increase of 82.9% compared to the 2018/2019 academic year.
Adherence to high quality development with continuous improvement of
teaching investment: Centred on the principles of "high-quality development"
and "students-orientation", the Group dedicated to the improvement of
employment quality, campus environment, and student's experience, increasing
the investment in enrollment, teaching, employment, logistics and epidemic
prevention in the four domains of talents, hardware, teaching, and systems.
In the 2019/2020 academic year, cost of sales amounted to RMB680 million,
representing an increase of 63% and accounted for 74.2% of the total cost,
up 7.2ppt compared to the previous year.
Strong profitability with profit continuing to rise: The net profit (after
restoration*) increased by 144.9% to RMB530 million; the net profit
attributable to owners of the parent (after restoration*) increased by
150.5% to RMB480 million.
* Due to the impact of COVID-19, RMB 37.19 million was refunded for boarding
fees and RMB 7.02 million was refunded for logistic fees during the 19/20
academic year.
Business Review
High-quality development of schools of the Group
The Group highly focused on quality development, taking high-quality
employment as the leading task, aligned with the popular industry and
leading enterprises, to comprehensively promote the quality of teaching, key
majors, school-enterprises cooperation, innovation and entrepreneurship, and
professional skills. Meanwhile, the group take students' studing and living
experience into consideration, improving campus landscaping by upgrading
facade design of buildings, interior design of indoor and other outdoor
environmental effects.
Distinctive Features of All Schools
Yunnan School attaches great importance to entrepreneurship and innovation
and has become the first private school in China to host the "innovation,
creativity and entrepreneurship" competition of national college students.
which was held by Zhejiang University and other public universities in the
past;
Guizhou School has improved the campus environment and infrastructure, such
as indoor visual effects of school libraries, classrooms, lecture halls,
canteens, student apartment, etc., as well as outdoor environmental
effectsof the school gate, such as flower sea and red maple forest;
Central China School ranks first in the province in terms of job
satisfaction of graduated students and has been named the advanced
collectives of college admissions team in Hubei province and one of the most
popular colleges on the admissions information website of Central China;
Northeast School opened 19 new elites classes for 9 majors, and the tuition
fees of the elite class were as high as RMB25,200, 30% higher than other
majors in 2020. The school jointly established the first joint demonstration
center of intelligent manufacturing technology in northeast China with
Siemens (China), as the only undergraduate major in the province and opened
for enrollment nationwide;
Henan School has carried out school-enterprise cooperation with several
well-known domestic enterprises, such as cooperation with Alibaba's Tmall on
the strategic training base. The cumulative sales of students participating
in Tmall's "Double Eleven" reached RMB2 billion in 2020;
Guangxi Schools have adopted the "Qiduo.net" employment platform to improve
the employment level. So far employment rate of graduates reaches 96%, far
better than those of similar schools within the region. It was reported to
the Ministry of Education as a typical case of employment in schools in
Guangxi autonomous region;
Gansu College has achieved the first employment rate of undergraduate
colleges in Gansu province in 2020 so far, surpassing Lanzhou University and
other well-known public universities.
Application-oriented School Running, Training High-quality Technical Talents
to Serve Regional Development
In response to the call of the State and education authorities, the Group
provides modern vocational education services and cultivates high-quality
technical and skilled talents who are application-oriented for serving
regional development. Intergating with the international OBE education and
teaching model, the Group has put into practice application-oriented talent
training with a focus on the professional structure of new medicine, new (MORE TO FOLLOW) Dow Jones Newswires
November 30, 2020 21:25 ET (02:25 GMT)