Edvantage Group (0382.HK)'s Net Profit Surged 35.6% YoY to RMB292 Million, Gross Profit Margin Continuously Expanded
- Written by ACN Newswire - Press Releases
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| Shenzhen venue, from the left: Mr. Liu Yung Chau, Founder & Executive Director and Chairman of the Board of Edvantage Group; Ms. Liu Wenqi, Chief Operating Officer |
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| Hong Kong venue, from the left: Mr. Sunny Yan, Director of ICF & IR of Edvantage Group; Mr. Simon Wong, Chief Financial Officer and Company Secretary; Ms. Liu Yi Man, Executive Director and Chief Executive Officer |
Financial Highlights (For the year ended 31 August 2020)- Revenue increased by 13.6% YoY to approximately RMB800 million;- Gross profit rose by 15.7% YoY to approximately RMB396 million, and gross profit margin rose by 0.9 ppts YoY to 49.5%;- Net profit1 grew by 35.6% YoY to approximately RMB292 million, and net profit margin grew by 5.9 ppts YoY to 36.4%;- Adjusted net profit2 improved by 30.5% YoY to approximately RMB309 million, and adjusted net profit margin improved by 5.0 ppts YoY to 38.6%;- Number of students3 increased by 7.3% YoY to 35,453;- Proposed final dividend per Share is HK4.9 cents- Annual dividend payout ratio accounted for 30%Note: (1) Net profit represents the profit from continuing operations; (2) Adjusted net profit includes three adjustments: 1) Net foreign exchange gain and loss (FY 2020: loss of RMB 8,119,000; FY 2019: gain of RMB 17,031,000); 2) Share-based payments (FY 2020: RMB 9,464,000; FY 2019: Nil); 3) Listing expenses (FY 2020: Nil; FY 2019: RMB 38,896,000); (3) Number of students is the sum of students in Huashang College, Huashang Vocational College, Global Business College of Australia and Edvantage Institute of Singapore (formerly known as NYU Language School) for the year ended 31 August 2020;
During the Reporting Period, the Group's total number of students amounted to 35,453, representing a year-on-year ("YoY") increase of 7.3%. The average tuition fee of Huashang College was RMB24,315, indicating a YoY growth of 11.4%, and that of Huashang Vocational College was RMB15,597, indicating a YoY growth of $3.6%. The Group's revenue accounted for approximately RMB800 million, increasing by 13.6% YoY. Its gross profit amounted to approximately RMB396 million, growing by 15.7% YoY, and the gross profit margin was 49.5%, growing by 0.9 percentage points YoY. Its net profit was approximately RMB292 million, representing a YoY rise of 35.6%, and the net profit margin was 36.4%, representing a YoY rise of 5.9 percentage points. The adjusted net profit accounted for approximately RMB309 million, increasing by 30.5% YoY, and the adjusted net profit margin was 38.6%, increasing by 5.0 percentage points YoY. The Board of Directors of the Group proposed a final dividend of HK4.9 cents per share. Together with the interim dividend of another HK4.9 cents, the annual dividend payout ratio accounted for 30%.
Performance ReviewChina SchoolsHigh-end and Innovative Majors SettingThe Group's Huashang College and Huashang Vocational College in China offer innovative high-end majors mainly in fields of business, healthcare and information technology, among which Accounting and Journalism are the core and most renowned majors in Huashang College, which have been respectively listed as a key discipline with characteristics of Guangdong Province and a key discipline for universities in Guangdong Province. Meanwhile, during the Reporting Period, in order to meet the demand for developing talents in various directions in China, the Group introduced popular majors including Chinese Medicine, Medical Beauty Technology, Nursing and Interior Art Design.
Registration Rates Reached Record HighFor the school year 2020/21, the registration rates of Huashang College and Huashang Vocational College reached record highs at respectively 95.9% and 85.2%, increasing by 4.1 and 2.1 percentage points from 91.8% and 83.1% for the year 2019/20. It was noteworthy that degree programmes of Huashang College aiming at junior college students gained enormous popularity among candidates, with more than 6,000 candidates applying for the year 2020/21, ranking first among Guangdong Province's independent colleges.
Quality of Enrolled Students Continuously ImprovingHuashang College's score lines have been going up every year. For the school year 2020/21, the minimum admission scores to liberal arts and science majors were 34 and 33 points higher than those of Guangdong Province. The minimum admission scores to popular majors such as Accounting for junior college students were also higher than the province's minimum thresholds by more than 80 points. The Group believes the uplifted score lines not only demonstrate its higher level of educational services but also guarantee the source of unlimited quality students for the Group.
Employment Quality SparkledBesides the historical registration rates and continuously rising score lines, the employment quality of the Group's graduates was also particularly eye-catching. Among the 2019 graduates, 248 were hired by enterprises in Fortune 500 and 220 entered China's top 100 companies, showing significant increases from 154 and 161 respectively in the previous year. Benefitting from the international education which equips students with outstanding language and professional capabilities, the Group has outputted almost 500 graduates for the Big Four accounting firms in the recent 5 years.
International SchoolsAs an early mover in the education sector pursuing global expansion, the Group's international education consists of 3 major aspects: (1) self-founded schools under the asset-light model autonomously recruiting students abroad and introducing innovative classes together with local and overseas institutions; (2) local schools cooperating with well-known foreign schools, such as University of Canberra in Australia, in various double-degree international classes; (3) offering local students Global Immersion Programmes ("GIP").
The Group's exclusive GIP are two-to-seven-week overseas courses to provide students with comprehensive, diversified and international learning experiences and practical opportunities. Students can participate in English-only immersion classes according to their professions and transfer credits upon the completion of such courses.
The Group's international education has been highly recognised by students and their parents and, to a certain extent, expanded the influence of the education brand of "Huashang". Simultaneously, students can enjoy high-end and diversified educational services, which brings a steady growth in the average tuition fee of local students.
Conversion Progress of Huashang CollegeDuring the Reporting Period, the Group proactively promoted the conversion of Huashang College, which is currently under National Ministry of Education's review and the result is expected to be announced before the end of 2020. After the conversion, Huashang College will still maintain a decent and continuous cooperation with Guangdong University of Finance and Economics. Such cooperation will include co-construction of research institutes and external social services. The costs induced will only be related to the cooperation maintenance and constitute teaching expenses, which are much lower than the annual school management fee paying Guangdong University of Finance and Economics.
Strategies and GoalsThe Group's future development mainly focuses on the business expansion through endogenous growth as well as outreach mergers and acquisitions ("M&A"). The full-time academic business and vocational education business, which is now under rapid development, are the major drivers of the endogenous growth, whilst the strategy of outreach M&A is equally vital for the Group.
Endogenous GrowthFull-time academic education businessImproving school conditions: Phase 1 of the new Sihui campus of Huashang College has already commenced operation in early September 2020, with an estimated capacity of approximately 16,000 students. The construction of Xinhui campus of Huashang Vocational college began this October, and Phase 1 is expected to commence operation in September 2021, with an estimated capacity of approximately 30,000 students. Huashang Science and Technology Centre and Huashang International Conference Centre in Zengcheng campus is currently under construction as scheduled.
Enriching and diversifying education services: The Group has established a venue in Shenzhen, the "Special Economic Zone of China" and "Silicon Valley of China". It is located in The MixC Commercial Zone in Nanshan District and started operation this May, mainly as a connection between domestic and foreign high-end vocational education, also organising high-end academic seminars and forums and providing the Group's students with better pre-employment training and services of matching corporate positions. Meanwhile, the Shenzhen venue is a candidate for the location of the Group's future GBA Business School, aiming to grow into a quality business school with MBA/EMBA as the key curriculum.
Optimising Programmes: During the Reporting Period, the Group was dedicated to cooperation with famous enterprises, namely SenseTime, Kingdee Group, Zhongxingxin Cloud and Baidu, as well as a prominent institute, Southwest University of Political Science and Law, to jointly develop high-end application talents. Such cooperation included co-establishing programmes and laboratories and introducing courses with title sponsorship, aiming to improve the competitiveness of Huashang's students.
Vocational Education BusinessThe Group positively supports the national "1+X" certification system and additional enrolments for higher vocational colleges. During the Reporting Period, the Group substantially enhanced its vocational education business with high growth rate and gross profit margin. Revenue from it is expected to grow by over 50% YoY, and its gross profit margin is estimated to exceed that of the Group's core business. It is even expected to contribute 20% of the Group's total revenue in the future.
Outreach M&ADuring the Reporting Period, the Group has been seeking M&A targets with superior profitability, courses offering and reputation in the Pan Pearl River Delta Region, where resources of higher education are tremendously demanded. Relevant work is now in steady progress, and the Group will make announcements in due course.
Mr. Liu Yung Chau, Founder, Executive Director and Chairman of the Board of Edvantage Group, said, "Edvantage has always been conducting its businesses in accordance with the national policy of 'Domestic circulation and dual circulation', from the past to the future. 'Domestic circulation' refers to the local full-time academic education and vocational education businesses as well as the Group's international educational services provided to local students through the 3 self-founded schools overseas. 'Dual circulation' refers to the combination of the overseas self-founded schools' autonomous recruitment and the local school's introduction of foreign students, with domestic students enjoying international education. Furthermore, our principles are to persevere in quality education and to offer highly differentiated education so as to gain a sustainable and healthy development with our brand's reputation. We firmly believe this is the very original force for continuously creating values for shareholders. In the 3 to 5 years ahead, we will steadily boost the development of local and overseas academic and vocation education businesses both online and offline to grow into a globally well-known quality educational group, thus continuously creating values for shareholders."
About Edvantage Group Holdings LimitedEdvantage Group Holdings Limited ("Edvantage Group" or the "Group", stock code: 0382.HK) is the largest private higher education group in the Greater Bay Area and an early mover in education sector in pursuing international expansion. The total number of student enrolments of the Group were 35,453 and the Group owns 5 schools in both China and overseas as of 31 August 2020.
In China, the Group currently operates 2 private higher education institutions in Guangdong Province, namely undergraduate college Huashang College Guangdong University of Finance and Economics and Guangzhou Huashang Vocational College, featuring business courses (such as accounting, finance, economics and business English) as the strategic curriculum; In overseas, the Group operates a private vocational education institution named Global Business College of Australia ("GBCA") authorised by Australian Skills Quality Authority ("ASQA") in Australia, offering vocational education courses and non-formal short-term courses. GBCA is the first Chinese international education institution approved by the Australian government. In December 2019, the Group has also acquired a private vocational education institution in Singapore, that is, Edvantage Institute (Singapore) ("EIS") (formerly known as NYU Language School), which provides short-term and long-term language training courses, various kinds of diploma and higher diploma programmes. It is qualified to offer internationally-recognised courses and accept local and overseas students in Singapore. Moreover, the Group established a higher education institution Edvantage Institute Australia ("EIA"), which is granted by the Tertiary Education Quality and Standards Agency ("TEQSA") in the first quarter of year 2020 and qualified to accept students, offer and award undergraduate and master's degrees. Its courses will be commenced in November 2020.
This press release is issued by Porda Havas International Finance Communications Group for and on behalf of Edvantage Group Holdings Limited For further information, please contact:
Porda Havas International Finance Communications GroupMr. Bunny Lee +852 3150 6707 bunny.lee@pordahavas.comMs. Angela Shi +852 3150 6778 angela.shi@pordahavas.comMs. Sarah Liang +852 3150 6765 sarah.liang@pordahavas.comMr. Addison Chu +852 3150 6750 addison.chu@pordahavas.com
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Authors: ACN Newswire - Press Releases
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