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China New Higher Education Group Announces Interim Results of 2021 fiscal year

·13-min read


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 acquisitionsreserve strong momentum for future development. The Group will create more stable and sustainable investment return for investorsafter 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 US$100 million of convertible bonds and approximately US$30 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

Through replicating the teaching ideology, strengthening the internal management, improving the teaching quality, facilitating industry-academia-research integration development and cultivating results-oriented education, in 2020, the Group won 33 national awards and 377 provincial awards in the 44 national university student competitions recognized by the Ministry of Education. For example, the School of Group won Grand Prizes at the "Innovation, Creativity and Entrepreneurship" Challenge for National University Students in E-Commerce.

 

Replication of employment system

The Group has innovated the "Seven Clouds" employment methodology, launched Yangtze River Delta Regional Career and Innovation Center, and signed strategic cooperation and jointly build an industrial college with a number of leading enterprises in industries covering Huawei and JD.com which was copied to each school of the Group to realize coordinated education and joint training of the application-oriented talents among schools, government, business and enterprise.

 

Replication of standardized process:

Cooperating with renowned third-party enterprises covering Tsinghua Architectural Design Institute and China Academy of Architectural Sciences to carry out planning and design, the Group has formed a replicable group standardized construction system with excellent design, high quality, fast speed, continuing to enhance student-teacher experience.

 

Replication of information management:

The Group has deployed the most advanced OA and ERP system, BI data decision platform and TronClass platform in China, realizing full coverage of smart campuses and safe campus platforms, and facilitating the rapid replication of management, teaching, services and other abilities to its schools.

 

Future Prospects

 

Brilliant future of vocational education with favorable policies

In mid-April, the National Conference on Vocational Education was held, which is a milestone for the development of vocational education. President Xi Jinping gave an important instruction on vocational education, emphasizing that vocational education has "a promising future and great potential"; Premier Li Keqiang gave a directive to strive to build a high-level technical and skilled talents training system, releasing a strong signal to the whole society that the state strongly supports vocational education, which is in line with the previous state support for the private sector to enter into the field of vocational higher education.

 

From the current situation of higher education management practice in each place, provincial governments also encourage social forces to set up more undergraduate-level vocational and technical universities and vocational colleges, encourage qualified specialized vocational colleges to actively apply for vocational undergraduate programs, and encourage specialized-level vocational colleges to cultivate more high-quality technical talents.

 

China New Higher Education Group is committed to cultivating students' own competitiveness, and will also actively respond to the call of the state and the government to make use of its strong centralized replication capability to promote the integration of industry and education and school-enterprise cooperation. Meanwhile the Group continues to increase teaching investment and improve the quality of the universities and colleges in all aspects to contribute to the development of vocational education in China, and cultivate more high-quality technical and skilled talents for regional development.

 

Continuing to Firmly Insist on Higher Vocational Education

At present, Cultivation of national technical and skilled talents is difficult and has been a long-term challenge to the government and the society, which need the support from social force and capital. Meanwhile, the private system has greater vitality to satisfy to the cultivation demand of technical and skilled talents with economic and social development.

 

Recently, favorable policies about higher vocational education published frequently. The Group, with obvious advantages in collectivized school operation that can be replicated, shared and synergized, can give full play to the scale effect. Therefore, the Group will continue to firmly insist on higher vocational education and constantly contribute to the development of higher vocational education.

 

Strong Organic Growth with Promising Value Investment

Recently, the Group has already deployed layout for next academic year. In future, the Group will continue to provide high-quality teaching, employment, campus environment, student and teaching experience, adhering to Great Quality Great Price strategy which supports the growth of future tuition fee. Meanwhile, the Group will push forward the strategy of robust self-founding and acquisition, fully take its advantage of centralized replication capability to consolidate and enhance existing schools, to unleash full potential of the newly invested school and to improve the overall qualities of schools under the Group. The Group concerns both social and economic benefits and integrates them into development strategy setting and facilitates the execution of "Two-wheel Driven" business strategy.

 

-End-

 

 

About China New Higher Education Group Limited:

 

China New Higher Education Group Limited is a leading private higher education group in China with nearly 21 years of education industry experience, specializing in providing higher education which focuses on applied sciences. The Group endeavors to help each student maximize their potential and live their life to the fullest. Since 2009, the Group has been operating schools in different provinces and regions, and its current school network covers 7 provinces in China, including Yunnan, Guizhou, Hubei, Heilongjiang, Henan, Guangxi, and Gansu.

 

The Group provides high quality higher education in a wide selection of fields in applied sciences. Its courses are designed to equip students with practical and readily applicable skills, helping to prepare them for the job market. As a leader in high-quality employment, the Group won the title of the Top 50 National Employment of the MOE, with an average employment rate of above 97%. The Group became a constituent stock of the Hang Seng Composite Small Cap Index and the Hang Seng Consumer Goods & Services Index in the Hang Seng Composite Index Series in August 2017, and was included as a constituent stock of the MSCI China Small Cap Index in November 2017 and included as a constituent stock of Shenzhen and Hong Kong Stock Connect in March 2018.

 

This press release is distributed by Wonderful Sky Financial Group Limited on behalf of China New Higher Education Group Limited.

 

For further information, please contact:

Wonderful Sky Financial Group Limited

Aileen Wang / Jing Chen

Tel: (852) 3970 2226/ (852) 3970 1557

Email: newhigheredu@wsfg.hk



File: China New Higher Education Group Announces Interim Results of 2021 fiscal year

27/04/2021 Dissemination of a Marketing Press Release, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

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