WEB NEWS Comments & Business Outlook
Second Quarter 2020 Financial Results
Revenue increased by 37.9% to RMB128.8 million (US$18.0 million) from RMB93.4 million in the same period of last year.
Basic and diluted net income per American Depositary Share ("ADS") attributable to ordinary shareholders were RMB0.40 (US$0.06) and RMB0.39 (US$0.05), respectively, compared with RMB0.14 and RMB0.13, respectively, for the same period of last year. Each two ADSs represent one ordinary share.
Adjusted basic and diluted net income per ADS attributable to ordinary shareholders(5) (non-GAAP) were RMB0.53 (US$0.08) and RMB0.52 (US$0.07), respectively, compared with RMB0.33 and RMB0.31, respectively, for the same period of last year.
"We achieved a strong quarter with remarkable operating and financial performances, thanks to our successful strategy and continuous efforts to optimize our operations," said Mr. Peiqing Tian, Chairman and Chief Executive Officer of Four Seasons Education. "In the second quarter, our total student enrollment reached 39,357, representing a robust growth of 90.8% compared with the same period of last year. The active student participation reflects the popularity of our programs and our enhanced brand awareness, as we have been consistently enriching and diversifying our course offerings to cover more academic subjects and educational topics. With differentiated programs designed for different grade levels, we have efficiently extended our courses to broader age groups.
"Following the optimization of our learning center network in previous quarters, our efforts are now bearing fruit respect to encouraging student enrollment in learning centers both in and out of Shanghai. Additionally, we included a new learning center in Chongqing and another one in Shenzhen in our national footprint during the second quarter. Both cities are economically dynamic markets that we believe have great growth potential for K-12 after-school education.
"Overall, our robust second quarter fiscal 2020 results demonstrate the success of our strategic adjustments according to the changing regulatory environment and evolving market demands. We believe that we have achieved healthy development following our strategic transformation. With our extensive educational capabilities and successful operating experiences, we will focus on strengthening our advantages in Shanghai and other cities where we have already established our presence. Meanwhile, we will remain prudent and diligent in our expansion while maintaining quality growth," Mr. Tian concluded.
Ms. Yi (Joanne) Zuo, Director and Chief Financial Officer of Four Seasons Education, commented, "Our impressive second quarter results are a clear testament to our strategy of providing comprehensive after-school education for K-12 students with diversified course offerings. Besides the excellent total student enrollment growth, we carried the momentum of diversification with an increasing number of enrollments in our non-math courses and middle school programs. Bolstered by the enormous market demand for our high-quality courses, our revenue growth reached 37.9% year over year in the second quarter, exceeding the high end of our guidance range. As a result of optimizing our learning center network in previous quarters, our gross margin realized a substantial growth to 55.1% for the second quarter, up 282 basis points from the same period last year. Coupled with our efficient operational cost control, we are thrilled to report strong operating income and net profit for the quarter. Our robust operational performance demonstrates the effectiveness of our business model and strategic transformation. We remain committed to our mission to unlock students' intellectual potential through high-quality and effective education, while bringing long-term value to our shareholders."
Business Outlook
For the third quarter of fiscal year 2020, the Company expects to generate revenue in the range of RMB100.3 million to RMB104.8 million, representing year-over-year growth of approximately 10% to 15%.
Comments & Business Outlook
Fourth Quarter 2019 Financial Results
Revenue decreased by 3.7% to RMB64.7 million (US$9.7 million) for the fourth quarter of fiscal year 2019 from RMB67.2 million in the same period of last year. Non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders for the fourth quarter of fiscal year 2019 was both RMB0.23 (US$0.03), compared with non-GAAP basic and diluted net income per ADS attributable to ordinary shareholders of RMB0.22 and RMB0.20, respectively, for the same period of last year.
"We continued to make strategic adjustments with the goal of optimizing operations and broadening educational offerings," said Mr. Peiqing Tian, Chairman and Chief Executive Officer of Four Seasons Education. "We were able to further improve the diversification of offerings in spite of the seasonality impact we experienced in this quarter due to Chinese New Year and winter break. As a result, revenue contribution from non-math courses and middle school programs steadily ratcheted up. We continued to enhance the geographic diversification of our revenue as our learning centers outside of Shanghai are contributing an increasing percentage to our revenue. Moreover, we established online presence by providing online courses and educational content that were diligently selected. Students are now able to participate in Four Seasons Education's featured online courses including certain Ivy program as well as other interest-based classes such as Rubik's Cube.
"With respect to our learning center network, we have been in the process of optimization as we planned. To optimize our network layout and resource allocation, we relocated or combined certain learning centers with small gross floor areas into large centers at new locations with upgraded facilities. As of February 28, 2019, we had 52 learning centers including 44 in Shanghai and eight in other cities.
"We achieved notable progress in developing and promoting other initiatives and activities designed to improve logical reasoning and foundational math skills. Four Seasons' competitive Sudoku and Bridge teams achieved outstanding performance in competitions during the quarter, which promoted the games' popularity as an interest-oriented competitive learning method across China. In addition, we have finished the majority of the course development work for our math lab program. Our self-test system has also been upgraded with an enriched question library and well-tagged categorization. Based on the increasingly comprehensive dataset, our evaluation system will be able to automatically generate bespoke sets of test questions, helping students develop a comprehensive understanding of certain areas of knowledge according to the individual's scholastic aptitude. Overall, we finished the fiscal year 2019 with many achievements despite changes in regulatory requirements in the fast-evolving education industry and relatively weak performance of new learning centers during the ramp-up period. We believe we are in the right trajectory to grow our business as we provide math and many other core subject classes to students at different grade levels," Mr. Tian concluded.
Ms. Yi (Joanne) Zuo, Director and Chief Financial Officer of Four Seasons Education, commented, "we are pleased to conclude fiscal 2019 with full-year revenue growth of 11.7% year over year and adjusted net income of RMB35.6 millionfor the year. The fiscal year 2019 was a year of transformation for the Company. Anchored by our strong capabilities in math education serving as our foundation and a core strength, we have been broadening course offerings, which cover more subjects across wider age groups. We also expanded and improved our learning center network which optimized utilization of our resources in the fiscal year 2019. We are confident in our strategy that has been set forth and are encouraged by the development of our business. We remain committed to nurturing students' interests in learning with enriched educational content, while seeking quality growth and enhanced efficiency."
Business Outlook
For the first quarter of fiscal 2020, the Company expects to generate revenue in the range of RMB83.8 million to RMB86.4 million.
Comments & Business Outlook
SHANGHAI, April 15, 2019 /PRNewswire / -- Four Seasons Education (Cayman) Inc. ("Four Seasons Education" or the "Company") (NYSE: FEDU), a leading after-school math education service provider for elementary school students in Shanghai, today announced that effective April 15, 2019, the board of directors of the Company (the "Board") approved a share repurchase program whereby Four Seasons Education is authorized to repurchase its own ordinary shares in the form of American depositary shares ("ADS") with an aggregate value of up to US$15 million during the next twelve-month period. The Company plans to fund the repurchase program out of its available working capital, existing cash balance or future cash provided by operating activities.
Mr. Peiqing Tian, Chairman and Chief Executive Officer of Four Seasons Education, commented, "As we continue to cultivate the after-school education market in Shanghai and nationwide, we remain committed to delivering value to our shareholders. With our newly approved share repurchase program, we expect to capitalize on our current valuation to repurchase shares at attractive prices. The proposed program also demonstrates our firm conviction in the value and long-term outlook of the Company."
The share repurchases under the 2019 program may be made from time to time through various means, including open market and privately negotiated transactions. The per share price cap will be determined from time to time by the discretion of the Chief Executive Officer or the Chief Financial Officer, as authorized by the Board. The proposed share repurchase may be effected on the open market at prevailing market prices, depending on a number of factors, including, but not limited to, share price, trading volume and general market conditions, along with the Company's working capital requirements, general business conditions and other factors, as well as subject to applicable rules of Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended.
Comments & Business Outlook
Third Quarter 2019 Financial Results
Revenue increased by 4.5% to RMB91.2 million (US$13.1 million) from RMB87.2 million in the same period of last year.
Adjusted basic and diluted net income per ADS attributable to ordinary shareholders (non-GAAP) was RMB0.28 (US$0.04) and RMB0.27 (US$0.04), compared with RMB0.46 and RMB0.44, respectively, for the same period of last year.
"During the third quarter, we continued to adjust our operations under the new regulatory requirements, while remaining steadfast in carrying out our strategy for quality growth," said Mr. Peiqing Tian, Chairman and Chief Executive Officer of Four Seasons Education. "As we constantly broaden our course coverage across the entire K-12 age groups with more in-demand class offerings on a variety of academic topics and areas, we have achieved further enrollment diversification in various subjects and age groups. Besides the course offerings that target improving students' academic performance, we are hosting a series of interest-oriented classes and activities to further promote student engagement. Based on our strong math teaching capabilities and resources, our featured classes for logic-based games such as Bridge, Sudoku and Rubik's Cube gained great popularity. We now deliver Bridge classes at ten Four Seasons Education's learning centers and have formed Four Seasons Education training teams in 2018 and 2019 for national competitions. Recently, our teams also achieved outstanding performance in bridge and Sudoku matches. We plan to organize more of these dynamic and enjoyable courses and activities which help students' logic-thinking and intellectual development.
"To comply with the latest set of regulatory changes, we have accordingly re-arranged our enrollment and class delivery process by limiting prepayment to cover a maximum of three-month curriculums. This operational adjustment has led to a year-over-year decrease in total enrollment for the quarter as we anticipated. However, we believe this change will not affect the overall demand. In addition, we have been optimizing our learning center network with prudent expansion. We added a learning center in Shanghai and one in Chongqing during the quarter. At the same time, we moved three learning centers in Shanghai to new locations to better meet the related requirement and provide a refreshing environment to our students. We also plan to restructure a few centers to optimize our facility utilization and profitability in the quarters ahead.
"Our ongoing efforts to comply with the latest regulation have been recognized by the government and related authority. We are pleased to report that our Shanghai Four Seasons Education and Training Co., Ltd., Four Seasons Class Training Co., Ltd. and other entities in our group were among the white list of after-school tutoring institutions released by the Shanghai Education Bureau in late December 2018, demonstrating our compliance in terms of operating licensure, educational content and the teaching facility environment. We would like to continue working with related authorities and adapting our operations to the evolving regulations of a rapidly growing after-school tutoring industry in China, as we fulfill our commitment to providing best-of-class educational services and learning experience to our students," Mr. Tian concluded.
Ms. Yi (Joanne) Zuo, Director and Chief Financial Officer of Four Seasons Education, commented, "It was very encouraging for us to achieve approximately 5% growth in the topline as compared to a relatively high revenue base in the same period of last year, thanks to our strategic adjustments to course offerings which better accommodate the evolving market's needs. During the third quarter, we focused on strengthening our core business, as we strategically combined several classes to improve overall efficiency. We are pleased with the initial positive result that gross margin improved sequentially in the third quarter. Looking forward, we plan to maintain our business strategy, seeking quality growth while making prudent operational adjustments for enhanced efficiency."
Business Outlook
For the fourth quarter of fiscal year 2019, the Company expects revenue to be relatively flat compared to the fourth quarter of fiscal 2018.
Comments & Business Outlook
Second Quarter 2019 Financial Results
Revenue increased by 20.7% to RMB93.4 million (US$13.7 million) from RMB77.4 million in the same period of last year.
Adjusted basic and diluted net income per ADS attributable to ordinary shareholders (non-GAAP) was RMB0.33 (US$0.05) and RMB0.31 (US$0.05), compared with RMB0.64 and RMB0.58, respectively, for the same period of last year.
"Besides delivering high-quality class content, our strong teaching capabilities and extensive educational experience also allow us to develop effective educational products and organize attractive learning activities. During the second quarter, we continued to improve our self-assessment system with an enhanced test database and successfully concluded our summer math camp in collaboration with East China Normal University. Recently, we were invited to present our math lab program in the 4th China Education Innovation Expo, which is a clear testament to this program and a recognition of our educational quality and innovation capability.
"We believe the market demand for after-school tutoring is still significant. We will continue to address the market need for synchronous tutoring to help students in different age groups review and consolidate knowledge to improve their study performance in various subjects. In addition, we are confident in our ability to maintain compliance with the latest regulatory requirements in terms of operating licenses and educational content as well as the teaching facility environment. As a leading after-school education service provider, we are committed to cooperating with related authorities to generate a more regulated market environment in the long run," Mr. Tian concluded.
Ms. Yi (Joanne) Zuo, Director and Chief Financial Officer of Four Seasons Education, commented, "We were pleased to achieve solid financial results during the second quarter with net revenue increasing 20.7% year over year, exceeding the high end of our guidance range. The encouraging topline performance was achieved as a result of our previous marketing effort as well as our initiatives of proactively providing a variety of shorter-duration classes and special programs. We have also realized further success in diversifying our program offerings for students in different age groups with greater revenue contributions from our Chinese curriculum, middle-school program and kindergarten program. On the expenses front, we have diligently continued to invest in our math lab program and online self-assess product development to further strengthen our service offering and educational quality. At the same time, we have prudently made investments in learning center network expansion and facility upgrades to provide a premium learning environment for our students. All these efforts, in return, will better prepare us in the evolving market and regulatory environment. Looking forward, we are committed to maintaining our educational capability and business flexibility while focusing more on the quality growth of our business with efficient operating and stringent cost control."
Business Outlook
For the third quarter of fiscal year 2019, the Company expects to generate revenue in the range of RMB89.9 million to RMB91.6 million, representing year-over-year growth of approximately 3.0% to 5.0%.
The above guidance reflects the Company's current and preliminary view, which is subject to change.
Comments & Business Outlook
First Quarter 2019 Financial Results
Revenue increased by 25.6% to RMB86.4 million (US$13.5 million) from RMB68.7 million in the same period of last year.
Adjusted basic and diluted net income per ADS attributable to ordinary shareholders (non-GAAP) was RMB0.38 (US$0.06) and RMB0.35 (US$0.05), respectively, compared with RMB0.51 and RMB0.47, respectively, for the same period of last year.
"We are pleased to start the fiscal year 2019 with a solid performance and report encouraging progress during the first quarter," said Mr. Peiqing Tian, Chairman and Chief Executive Officer of Four Seasons Education. "While the regulatory environment has brought substantial impact to our elementary math tutoring business, we have nevertheless been consistently carrying out our strategy of providing broader course offerings for students at different age groups, and steadily expanding our learning center network in Shanghai and nationwide. We are delighted to report that a greater proportion of our enrolled students participated in our non-math, non-elementary school programs, reflecting our efforts in diversifying our course offerings and enhancing our competitiveness in the evolving after-school education market."
"While our teaching quality is highly recognized by students and parents, we continue to adopt new methods and technology in our services to further facilitate our teaching and students' learning. Recently we developed a series of video class presentations and digital study materials that are conveniently accessible by our students via our online portals. We also cooperate with East China Normal University Press, the publisher of "One Lesson One Exercise," a well-known and widely-used reference book series to develop both online and offline synchronous teaching system. Furthermore, our self-test system was launched and is now open to our existing and potential students on our online portals and offline learning centers. As a part of our intelligent math lab program, the self-test system backed by our extensive educational experience provides students with a quantified assessment of their math level through a series of tests, and can recommend classes that are the most suitable to their current levels."
"In conclusion, we are dedicated to nurturing students' interests in math and other subjects. It is our firm belief that learning ability is a core competency for students in their career and life path and this does not change no matter how our current regulatory environment changes. Through our diversified course offerings to students from pre-school kids to high school teenagers, we are committed to guiding their learning process and nurturing their learning habits," Mr. Tian concluded.
Ms. Yi (Joanne) Zuo, Director and Chief Financial Officer of Four Seasons Education, commented, "We are delighted to report an outstanding bottom-line performance during the first quarter of fiscal 2019 with a strong adjusted net margin of 21.1%. This result was achieved largely through our stringent cost control during the quarter amid some pressure on our top-line resulting from a changing regulatory environment since last December and this February. We are also pleased to have made progress in diversifying our program offerings for students in different age groups. These efforts, in return, partially offset the regulatory impact, and are reflected by the significant increase in revenue contributed by our kindergarten programs, Chinese programs and middle-school programs. Apart from the adjustment to our course offerings, we have been prudently making investments in our nationwide learning network expansion and exploring different kinds of educational activities to further enhance our brand recognition in the market. Although these investments and efforts are currently at an early stage and not generating significant cash flow, we believe they will bring profound benefits to our future development," Ms. Zuo concluded.
Business Outlook
For the second quarter of fiscal 2019, the Company expects to generate revenue in the range of RMB89.0 million to RMB92.9 million, representing year-over-year growth of approximately 15% to 20%.
Comments & Business Outlook
Fourth Quarter 2018 Financial Results
Revenue increased by 40.0% to RMB67.2 million (US$10.6 million) from RMB48.0 million in the same period of last year.
Adjusted basic and diluted net income per ADS attributable to ordinary shareholders (non-GAAP) was RMB0.22 (US$0.03) and RMB0.20 (US$0.03), respectively, compared with RMB0.13 and RMB0.13, respectively, for the same period of last year.
"We are pleased to conclude our 2018 fiscal year on a strong note while maintaining multiple areas of progress in the fourth quarter," said Mr. Peiqing Tian, Chairman and Chief Executive Officer of Four Seasons Education. "During the quarter, our total student enrollment increased by 25.4% year over year, driven by diversified programs and course offerings for students at different age groups, as well as the expansion of our learning center network outside Shanghai. Specifically, our middle school program covering multiple subjects and providing knowledge enhancement training services has experienced strong enrollment growth, reflecting our superior course design quality and teaching effectiveness. In the first quarter of fiscal year 2019, we have entered into an acquisition agreement to acquire 90% equity shares of a renowned early childhood education provider in Shanghai, to spearhead our efforts to penetrate into pre-school tutoring market. We also made encouraging progress in our learning center network expansion outside the Shanghai area, with newly registered learning centers in Fuzhou and Shenzhen, which extends our presence to more provinces in China.
"In addition, at the end of this February, the Ministry of Education released a new policy that aims to further alleviate the study burden on primary school students. After the policy announcement, we conducted a comprehensive review of our teaching materials to ensure that our class contents meet regulatory requirements. It is worth mentioning that our strong teaching capabilities enable us to always provide students with different approaches to solutions using the knowledge within their grade level, instead of using the knowledge that should be taught at higher levels. Although we expect the new policy will have a short-term impact on the after-school education industry, we believe it will help to generate a more regulated market environment in the long run, which will benefit institutions like us with a strong understanding of education and student intellectual development paths. In the meantime, we have been actively shifting our operations to cover wider age groups and more subjects, with a goal of keeping our position and competitive edge in the evolving market."
Ms. Yi (Joanne) Zuo, Director and Chief Financial Officer of Four Seasons Education, commented, "During the fourth quarter, our top-line was impacted by the behind-schedule application of the law on promotion of non-public schools, which caused the delayed opening of our new learning centers and postponed their enrollment processes. In December, the release of the new policy that imposes limitations on certain types of after-school academic-related competitions also negatively affected our enrollment in January and February. In addition, in compliance with the new policy, some of our courses were restricted to open enrollment to our existing students only, which further impacted our revenue growth.
"On the operating front, we incurred a substantial increase in our sales and marketing expenses, primarily driven by our student promotion expenses outside of the Shanghai area as well as our proactive efforts to build a business development team for our nationwide expansion. Also, during the fourth quarter, we launched our math lab program in cooperation with East China Normal University to further enhance our brand awareness and penetration into schools. Despite the additional expenses for these initiatives during the quarter, we believe the upfront investments in our team-building and cooperative programs will better position us to capture the tremendous opportunity in the after-school education market in China," Ms. Zuo concluded.
Business Outlook
For the first quarter of fiscal 2019, the Company expects to generate revenue in the range of RMB89.4 million to RMB92.8 million, representing year-over-year growth of approximately 30% to 35%.
Research
Four Seasons Education (Cayman) Inc. (NYSE: FEDU) ,an after-school math education service provider for elementary school students in city of Shanghai, China, announced the pricing of its IPO of 10.1m ADSs at a price of US$10.00 per ADS for a total offering size of US$101 million. Each two ADSs represents one ordinary share. The ADSs are expected to start trading on NYSE today under the symbol "FEDU." The market cap after IPO is approximately US$577 million with a P/E of 65 based on the annualized net income for the first 6 months in fiscal 2018.
