Hailiang Education Group Inc. Reports Fiscal Year 2020 Financial Results
Hailiang Education Group (Nasdaq: HLG) reported its fiscal year 2020 results, revealing a slight revenue decline of 1.1% to RMB1,482.6 million (US$209.8 million), mainly due to COVID-19's impact on educational training and study trip services. However, revenue from K-12 educational services grew by 7.5% to RMB1,308.2 million (US$185.2 million). Net profit attributable to shareholders increased by 26.4% to RMB370.8 million (US$52.5 million), driven by higher tuition and improved cost control. The gross profit margin rose to 33.7%, up from 31.5% in the previous year.
- Net profit attributable to shareholders increased by 26.4% to RMB370.8 million (US$52.5 million).
- Revenue from K-12 educational services grew by 7.5% to RMB1,308.2 million (US$185.2 million).
- Gross profit margin improved to 33.7%, up by 2.2 percentage points from last year.
- Educational training services generated RM48.3 million (US$6.8 million), an 18.1% increase.
- Overall revenue decreased by 1.1% to RMB1,482.6 million (US$209.8 million).
- Revenue from educational training services fell by 62.8% to RMB53.7 million (US$7.6 million).
- Revenue from study trip services dropped by 30.8% to RMB56.4 million (US$8.0 million).
- Net cash provided by operating activities decreased significantly to RMB431.0 million (US$61.0 million) from RMB690.3 million.
HANGZHOU, China, Oct. 14, 2020 /PRNewswire/ -- Hailiang Education Group Inc. (Nasdaq: HLG) ("Hailiang Education", the "Company" or "we"), an education and management service provider of primary, middle, and high schools in the PRC, announced its financial results for the fiscal year ended June 30, 2020.
"Despite temporary disruptions and short-term impact on our business caused by the COVID-19 pandemic, our strong and stable performance has demonstrated our continued progress in executing and innovating our growth strategy and highlighted the resilience of our underlying business. For the fiscal year 2020, our revenue was RMB1,482.6 million (US
Dr. Chen continued, "When the outbreak of COVID-19 first appeared, with careful and proactive arrangements and deployments, we regarded the safety and health of all our students and employees as top priority and made appropriate short-term adjustments to our business operations when needed. To reduce the negative impact of COVID-19 on planned teaching progress of the Spring semester, we launched 'Hailiang VIP Cloud Virtual Classroom' in February 2020 to ensure that our students could continue their courses as planned before the outbreak of COVID-19 via online live classes. Benefiting from our abundant educational resources, outstanding facility capabilities, and technical advantages in IT infrastructure, our online education services and "Smart Campus" platform have thrived during the outbreak of COVID-19. As a result of above countermeasures, no material curriculum education service fees were refunded. We will continually monitor the development of the pandemic, assess and timely disclose the impact of COVID-19 on our financial position and financial performance."
For the year ended June 30, | ||||||
(RMB millions, except per share data) | 2020 | 2019 | % Change | |||
Revenue | 1,482.6 | 1,499.0 | - | |||
K-12 educational services | 1,308.2 | 1,217.0 | ||||
Basic educational program | 859.2 | 805.7 | ||||
International program | 449.0 | 411.3 | ||||
Educational training services | 53.7 | 144.2 | - | |||
Study trip services | 56.4 | 81.5 | - | |||
Education and management services | 48.3 | 40.9 | ||||
Others | 16.0 | 15.4 | ||||
Gross Profit | 499.4 | 472.1 | ||||
Gross Margin | 2.2pp* | |||||
Operating Profits | 467.8 | 399.6 | ||||
Operating Margin | 4.9pp* | |||||
Net Profit | 366.6 | 315.8 | ||||
Net Profit Attributed to the Company's shareholders | 370.8 | 293.4 | ||||
EPS | 0.90 | 0.71 | ||||
*Notes: pp represents percentage points | ||||||
Fiscal Year 2020 Financial Highlights
- Revenue was RMB1,482.6 million (US
$209.8 million ), a slight decrease of1.1% from RMB1,499.0 million in fiscal year 2019. Revenue from K-12 educational services increased to RMB1,308.2 million (US$185.2 million ), or by7.5% , from RMB1,217.0 million in fiscal year 2019. - Gross profit was RMB499.4 million (US
$70.7 million ), an increase of5.8% from RMB472.1 million in fiscal year 2019. - Gross margin was
33.7% compared with31.5% in fiscal year 2019. - Net profit attributed to the Company's shareholders was RMB370.8 million (US
$52.5 million ), an increase of26.4% from RMB293.4 million in fiscal year 2019. - Basic and diluted earnings per share were RMB0.90 (US
$0.13 ) compared with RMB0.71 in fiscal year 2019.
Fiscal Year 2020 Operational Highlights[1]
- As of June 30, 2020, the scale of the Company's school network has expanded to 37 schools, 9 of which were affiliated schools that we sponsored and 28 of which were managed schools that we provided education and management services to.
- As of the date of our annual report on 20-F filed on October 14, 2020, there were four new affiliated schools, including Lanzhou Hailiang Experimental School, Wuhu Hailiang Experimental School, Hailiang Overseas Chinese School, which we started operating in September 2020 and Jinhua Hailiang Foreign Language School, which we acquired in September 2020.
- As of June 30, 2020, the aggregate number of students enrolled in both our affiliated and managed schools were 66,344, which included 23,716 students enrolled in our affiliated schools. The number of students enrolled in the basic educational programs of our affiliated schools was 18,857, and the number of students enrolled in the international programs of our affiliated schools was 4,859.
- For the fall semester of fiscal year 2021, as of September 20, 2020, the aggregate number of students enrolled in our affiliated schools increased to 26,865, which included 2,542 students enrolled in the four new affiliated schools that started operation or was acquired in September 2020. The number of students enrolled in the basic educational programs of our affiliated schools was 20,864, and the number of students enrolled in the international programs of our affiliated schools was 6,001.
- As of June 30, 2020, there was an aggregate of 2,153 teachers and educational staff in our affiliated schools, which included 16 golden Olympiad competition training coaches, 9 exceptional teachers, and 139 senior teachers. Additionally, 26 graduates from Tsinghua University and Peking University have been appointed to take leading positions as teachers or in management as of August 31, 2020.
- As of the date of our annual report on 20-F filed on October 14, 2020, we have facilitated the development and application of "Smart Campus" and "Smart Classroom" by establishing an experienced team composed of education professionals and IT developers, and cooperating with top Chinese universities and leading enterprises. With the integration of IoT, cloud and big data technology and the innovation of education and management experiences, we have launched a variety of applications and IT infrastructures, such as "iClass", "Star Classroom", "Star Teacher Training", and online registration system, to improve efficiency of management and quality of teaching and learning.
[1] Operational figures after June 30, 2020 are approximate numbers based on the Company's internal statistics currently available and differences may arise between such figures and the disclosure in subsequent results announcements, financial reports and/or other relevant corporate materials of the Company. The Company wishes to remind the shareholders of the Company and potential investors not to unduly rely on such numbers and that they are advised to exercise caution when dealing in the shares of the Company. |
Fiscal Year 2020 Financial Results
Revenue
Revenue slightly decreased by
Revenue from K-12 educational services increased by RMB91.2 million (US
Revenue from educational training services decreased by RMB90.5 million (US
Revenue from study trip services decreased by RMB25.1 million (US
Revenue from education and management services increased by RMB7.4 million (US
Other revenue mainly represented revenue derived from overseas study consulting services and hotel management services. Other revenue increased by RMB0.6 million (US
Cost of Revenue
Cost of revenue decreased by RMB43.7 million (US
Gross Profit and Gross Margin
Gross profit increased by
Gross margin increased by 2.2 percentage points to
Other Income, net
Other income consists of government grants and other miscellaneous income. Other income increased by RMB47.7 million (US
Operating Expenses
Operating expenses increased by RMB6.7 million (US
Selling expenses increased by RMB1.9 million (US
Administrative expenses increased by RMB4.8 million (US
Finance Income and Finance Costs
Finance income increased by RMB0.2 million (US
Finance costs was RMB4.4 million (US
Income Tax Expense
Income tax expense increased by RMB13.2 million (US
Net Profit and Net Profit Attributable to the Company's Shareholders
Net profit increased by
Net profit attributable to the Company's shareholders increased by
Basic and Diluted Earnings per Share
Basic and diluted earnings per share were RMB0.90 (US
Cash Flow
Net cash provided by operating activities was RMB431.0 million (US
Balance Sheet
As of June 30, 2020, the Company had cash and cash equivalents of RMB503.0 million (US
Exchange Rate
This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.0651 to US
The Company will host its fiscal year 2020 financial results conference call at 9:00 am Eastern Time (6:00 am Pacific Time/9:00 pm Beijing Time) on October 15, 2020. To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for "Hailiang Education Group/HLG".
Conference Call | |
Date: | October 15, 2020 |
Time: | 9:00 am ET, U.S. |
International Toll Free: | United States: +1 888-346-8982 Mainland China: +86 400-120-1203 Hong Kong: +852 800-905-945 |
International: | International: +1 412-902-4272 |
Conference ID: | Hailiang Education Group |
Please dial in at least 15 minutes before the commencement of the call to ensure timely participation. For those unable to participate, an audio replay of the conference call will be available from approximately one hour after the end of the live call until October 22, 2020. The dial-in for the replay is +1-877-344-7529 within the United States or +1-412-317-0088 internationally. The replay access code is No. 10148525.
A live webcast and archive of the conference call will be available at http://ir.hailiangedu.com.
About Hailiang Education Group Inc.
Hailiang Education (Nasdaq: HLG) is one of the largest primary, middle, and high school educational service providers in China. The Company primarily focuses on providing distinguished, specialized, and internationalized education. Hailiang Education is dedicated to providing students with high-quality primary, middle, and high school, and international educational services and highly valuing the quality of students' life, study, and development. Hailiang Education adapts its education services based upon its students' individual aptitudes. Hailiang Education is devoted to improving its students' academic capabilities, cultural accomplishments, and international perspectives. Hailiang Education operates multilingual programs including Chinese, English, Spanish, Japanese, Korean, and French. In addition, Hailiang Education has launched various diversified high-quality courses, such as Mathematical Olympiad courses, A-level courses, Australia Victorian Certificate of Education (VCE) courses, IELTS courses, TOEFL courses, as well as SAT courses. The Company has also formed extensive cooperative network with more than 200 educational institutions and universities globally. Hailiang Education is committed to making great effort to provide its students with greater opportunities to enroll in well-known domestic and international universities to further their education. For more information, please visit http://ir.hailiangedu.com.
Forward-Looking Statement
This press release contains information about Hailiang Education's view of its future expectations, plans, and prospects that constitute forward-looking statements. These forward-looking statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts in this announcement are forward-looking statements, including but not limited to the following: general economic conditions in China, competition in the education industry in China, the expected growth of the Chinese private education market, Chinese governmental policies relating to private educational services and providers of such services, health epidemics and other outbreaks in China, the Company's business plans, the Company's future business development, results of operations, and financial condition, expected changes in the Company's revenue and certain cost or expense items, its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the number of students entrusted by schools, the successful integration of acquired companies, technologies and assets into its portfolio of software and services, marketing and other business development initiatives, dependence on key personnel, the ability to attract, hire, and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property, the outcome of ongoing, or any future, litigation or arbitration, including those relating to copyright and other intellectual property rights, and other risks detailed in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"). Hailiang Education may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Hailiang Education's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, whether known or unknown, and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "will make," "will be," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "endeavor to," "is/are likely to," or other similar expressions. Further information regarding these and other risks is included in our annual report on Form 20-F and other filings with the SEC. All information provided in this press release is as of the date of this press release, and Hailiang Education undertakes no obligation to update any forward-looking statements, except as may be required under applicable law.
Contacts:
Mr. Litao Qiu
Board Secretary
Hailiang Education Group Inc.
Phone: +86-571-5812-1974
Email: ir@hailiangeducation.com
Ms. Tina Xiao
Ascent Investor Relations LLC
Phone: +1-917-609-0333
Email: tina.xiao@ascent-ir.com
HAILIANG EDUCATION GROUP INC.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE (Amounts in thousands except per share data) | |||||
2020 | 2019 | 2018 | |||
RMB | USD | RMB | RMB | ||
Revenue | 1,482,599 | 209,848 | 1,499,025 | 1,169,348 | |
Cost of revenue | (983,175) | (139,159) | (1,026,903) | (804,674) | |
Gross profit | 499,424 | 70,689 | 472,122 | 364,674 | |
Other income, net | 72,776 | 10,301 | 25,100 | 3,689 | |
Selling expenses | (26,899) | (3,807) | (25,003) | (24,539) | |
Administrative expenses | (77,536) | (10,975) | (72,661) | (63,374) | |
Operating profit | 467,765 | 66,208 | 399,558 | 280,450 | |
Gain on disposal of affiliated entities | — | — | — | 5,349 | |
Finance income | 25,120 | 3,556 | 24,935 | 11,391 | |
Finance costs | (4,363) | (618) | — | — | |
Net finance income | 20,757 | 2,938 | 24,935 | 11,391 | |
Profit before tax | 488,522 | 69,146 | 424,493 | 297,190 | |
Income tax expenses | (121,924) | (17,257) | (108,713) | (66,288) | |
Net Profit | 366,598 | 51,889 | 315,780 | 230,902 | |
Profit attributable to: | |||||
Net (loss)/profit attributable to non-controlling interests | (4,234) | (599) | 22,359 | 8,314 | |
Net profit attributable to the Company's shareholders | 370,832 | 52,488 | 293,421 | 222,588 | |
366,598 | 51,889 | 315,780 | 230,902 | ||
Earnings per share | |||||
Basic and diluted earnings per share | 0.90 | 0.13 | 0.71 | 0.54 | |
Net Profit | 366,598 | 51,889 | 315,780 | 230,902 | |
Other comprehensive (loss)/income | |||||
Items that will not be reclassified to profit or loss | |||||
Exchange differences on translation of financial statements | 2,966 | 420 | 4,086 | (3,016) | |
Items that are or may be reclassified subsequently to profit or | |||||
Exchange differences on translation of financial statements | (640) | (91) | (776) | 474 | |
Other comprehensive income/(loss), net of nil income tax | 2,326 | 329 | 3,310 | (2,542) | |
Total comprehensive income | 368,924 | 52,218 | 319,090 | 228,360 | |
Total comprehensive income attributable to: | |||||
Total comprehensive (loss) /income attributable to non- | (4,234) | (599) | 22,359 | 8,314 | |
Total comprehensive income attributable to the Company's | 373,158 | 52,817 | 296,731 | 220,046 | |
HAILIANG EDUCATION GROUP INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF JUNE 30, 2019 AND 2020 (Amounts in thousands) | |||
2020 | 2019 | ||
RMB | USD | RMB | |
Assets | |||
Property and equipment, net | 628,538 | 88,964 | 620,623 |
Intangible assets and goodwill, net | 97,806 | 13,844 | 99,525 |
Right-of-use assets | 517,609 | 73,263 | — |
Contract costs | 10,766 | 1,523 | 9,899 |
Prepayments to third party suppliers | 75 | 11 | 94 |
Deferred tax assets | 568 | 80 | — |
Non-current assets | 1,255,362 | 177,685 | 730,141 |
Other receivables due from related parties | 76,646 | 10,849 | 91,674 |
Other current assets | 36,723 | 5,198 | 31,706 |
Term deposits held at a related party finance entity | 916,601 | 129,736 | 1,387,094 |
Restricted bank deposits | 324 | 46 | 1,613 |
Cash and cash equivalents | 503,021 | 71,198 | 260,684 |
Current assets | 1,533,315 | 217,027 | 1,772,771 |
Total assets | 2,788,677 | 394,712 | 2,502,912 |
Equity | |||
Share capital | 268 | 38 | 268 |
Share premium | 134,583 | 19,049 | 134,583 |
Contributed capital | 251,034 | 35,532 | 251,034 |
Reserves | 394,865 | 55,890 | 360,914 |
Retained earnings | 1,244,216 | 176,107 | 905,009 |
Total Hailiang Education Group Inc. shareholders' equity | 2,024,966 | 286,616 | 1,651,808 |
Non-controlling interests | 10,797 | 1,528 | 37,439 |
Total equity | 2,035,763 | 288,144 | 1,689,247 |
Liabilities | |||
Contract liabilities | 3,159 | 447 | 2,579 |
Deferred tax liabilities | 4,607 | 652 | 4,691 |
Lease liabilities | 18,749 | 2,654 | — |
Non-current liabilities | 26,515 | 3,753 | 7,270 |
Trade and other payables due to third parties | 264,870 | 37,490 | 218,122 |
Other payables due to related parties | 136,045 | 19,256 | 134,745 |
Contract liabilities | 274,874 | 38,906 | 398,951 |
Income tax payable | 48,857 | 6,915 | 54,577 |
Lease liabilities | 1,753 | 248 | — |
Current liabilities | 726,399 | 102,815 | 806,395 |
Total liabilities | 752,914 | 106,568 | 813,665 |
Commitments and contingencies | — | — | — |
Total equity and liabilities | 2,788,677 | 394,712 | 2,502,912 |
View original content to download multimedia:http://www.prnewswire.com/news-releases/hailiang-education-group-inc-reports-fiscal-year-2020-financial-results-301152662.html
SOURCE Hailiang Education Group Inc.
