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First High-School Education Group Co., Ltd. (NYSE: FHS) reported a net loss of RMB3.8 million (US$0.6 million) for the first half of 2021, a significant decline from a net income of RMB31.9 million in 2020. This loss was attributed to non-recurring expenses such as IPO costs (RMB10 million) and debt restructuring (RMB7.3 million). However, excluding these costs, the company realized a comparable net income of RMB42.2 million, marking a 32.8% increase from the previous year. As of September 1, 2021, the company operates 36 school programs with over 35,000 students, achieving a utilization rate of 62.3%.
Positive
Comparable net income of RMB42.2 million, up 32.8% from 2020.
Increased utilization rate from 55.3% to 62.3%.
Negative
Net loss of RMB3.8 million compared to net income of RMB31.9 million in 2020.
Significant one-off expenses totaling over RMB46 million, impacting bottom line.
BEIJING--(BUSINESS WIRE)--
First High-School Education Group Co., Ltd. ("First High-School Education Group" or the "Company") (NYSE: FHS), the largest operator of private high schools in Western China and the third largest operator in China, provides additional details concerning its net loss on its unaudited financial results for the six months ended June 30, 2021.
The net loss in the first half of 2021 was RMB3.8 million(US$0.6 million) compared to a net income of RMB31.9 million in the same period of 2020. The decrease in net income was due to certain one-off and non-recurring expenses, including: (1) Professional expense of approximately RMB10.0 million with the Company’s initial public offering; (2) Debt restructuring related expenses of approximately RMB7.3 million; (3) one-off option granted to a strategic investor and consultant of RMB15.0million; (4) The acquisition related expense of approximately RMB4.3 million; (5) The accrual revenues of RMB9.6 million from government for the relevant cooperative arrangements.
Excluded the above non-recurring expenses, the Company’s comparable net income was approximately RMB42.2 million, an increase of 32.8% from RMB31.9 million in the same period of 2020.
The senior management of the Company, commented: "Facing tough regulatory environment, we remain committed to driving rapid growth with further operation expansion while improving utilization rate for our existing schools. As of September 1, 2021, we are running 36 school programs with a total of over 35,000 students across Yunnan province, Guizhou province, Shanxi province, Shaanxi province, Inner Mongolia Autonomous Region, Sichuan province and Chongqing, with a utilization rate of 62.3%, compared to 55.3% as of December 31, 2020. In the meanwhile, we continued to invest heavily in technology and education quality to provide premium and authentic educational services to satisfy each student and parent we serve. We believe that the education market in China will continue to see steady growth and that the current education companies will play a very important role in the education sector. We are highly confident in the market opportunities for China's private high school and Gaokao repeaters school programs and believe that our company will reach potential beyond our responsibilities and mission.”
