HONG KONG, Apr 20, 2021 - (ACN Newswire) - Edvantage Group Holdings Limited ("Edvantage Group" or the "Group", stock code: 0382.HK), the largest private higher education group in Guangdong-Hong Kong-Macau Greater Bay Area (the "Greater Bay Area"), is pleased to announce its unaudited interim results of the financial year 2021 for the 6 months ended 28 February 2021 ("Reporting Period").
Shanghai venue, The Ritz-Carlton Hotel Shanghai, Pudong, from the left: Ms. Liu Wenqi, Chief Operating Officer; Ms. Liu Yi Man, Executive Director and Chief Executive Officer
Hong Kong venue, Edvantage Group's Hong Kong Office, from the left: Mr. Sunny Yan, Director of ICF & IR; Mr. Liu Yung Chau, Executive Director and Chairman of the Board; Mr. Simon Wong, Chief Financial Officer and Company Secretary
Interim Results Highlights (Unaudited data for the 6 months ended 28 February 2021)
-- Revenue (including revenue from vocational education business) grew by 32.5% YoY to approximately RMB554.3 million
-- Vocational education business revenue(1) amounted to approximately RMB20.7 million
-- Gross profit increased by 35.8% YoY to approximately RMB277.2 million, and gross profit margin increased by 1.2 ppts YoY to 50.0%
-- Adjusted net profit(2) increased by 32.5% YoY to approximately RMB199.9 million
-- Number of student enrolments(3) surged by 76.8% YoY to 62,404
-- An interim dividend of HK5.5 cents per share is proposed, representing a dividend payout ratio(4) of 30%
During the Reporting Period, Edvantage Group's revenue grew by 32.5% year-on-year ("YoY") to approximately RMB554.3 million; gross profit increased by 35.8% YoY to approximately RMB277.2 million; gross profit margin increased by 1.2 percentage points YoY to 50.0%; and adjusted net profit increased by 32.5% YoY to approximately RMB199.9 million. Its total number of student enrolments surged by 76.8% YoY to 62,404. In Guangdong Province, the numbers of student enrolments of Guangzhou Huashang College ("Huashang College") and Guangzhou Huashang Vocational College ("Huashang Vocational College") respectively rose by 3.7% and 25.0% YoY to 24,991 and 13,324; in Sichuan Province, the numbers of student enrolments of Urban Vocational College of Sichuan ("Urban Vocational College") and Urban Technician College of Sichuan ("Urban Technician College") were respectively 14,249 and 6,109. The average tuition fees of Huashang College increased by 9.6% YoY to RMB26,661; that of Huashang Vocational College increased by 5.1% YoY to RMB16,361; that of Urban Vocational College amounted to RMB13,430; and that of Urban Technician College amounted to RMB9,901.
During the Reporting Period, Edvantage Group made new progress in expanding its school network, currently operating a total of 8 schools in China and abroad. The Group operated 5 schools in China, namely Huashang College, Huashang Vocational College, Urban Vocational College, Urban Technician College and Greater Bay Area Business School ("GBA"), and 3 schools abroad, namely Global Business College Australia ("GBCA"), Edvantage Institute Australia ("EIA") and Edvantage Institute Singapore ("EIS").
First M&A of Sichuan Schools Completed
Situated in Superior Locations with Top-ranked School-running Indicators
The Group successfully acquired Urban Vocational College and Urban Technician College on 4 December 2020, and both schools' accounts have been consolidated to the group's book since January 2021. Two schools can accommodate a total of approximately 35,000 students and their current number of student enrolments is more than 20,000.
Urban Vocational College ranked 1st in Sichuan Province and came 8th in China in 2020 Wu Shulian Private Higher Vocational Education School Comprehensive Strength Ranking. It is also the school planning to offer upgrading from junior college to degree course included in 14th Five Year Plan. Furthermore, Urban Vocational College ranked 1st in terms of tuition fees standards (RMB16,800 for regular students and RMB17,800 for students majoring in arts in the 2021/2022 school year) among colleges of the similar class in Sichuan Province. The school also stably ranks among the top three in terms of the enrolment rate (around 85% from the 2015/2016 school year to the 2020/2021 school year) among colleges of the similar class in Sichuan Province. All these indicators reflect the school's high teaching quality. In addition, the employment rates of the school's graduates in 2019 and the previous 9 years were more than 98%.
High Degree of Synergy Between Two Regions' Campuses
These two acquired schools and the Group's existing schools in China and overseas can establish a high degree of synergy with an increased number of full-time students, introduction of existing international teaching resources, complementarity and integration of majors setting, combination of cultivating mode of talents, mutual learning of innovative teaching and management services model as well as the improvement of the Group's financial position. The Group believes that the integration will lead to sustainable development and have a positive impact on the development of education on both parties.
Conversion of Huashang College Announced
In December 2020, Huashang College was converted into an independent private regular undergraduate school with the official approval of the Commission of Guangdong Province on the Appraisal of the Establishment of Higher Education Schools and renamed from "Huashang College Guangdong University of Finance & Economics" to "Guangzhou Huashang College". After the conversion, Huashang College will have more autonomy in school running and more flexibility in student enrolment and will be able to offer more quality degrees. Student status management fees payable to Guangdong University of Finance & Economics will also gradually diminish from FY2022, thereby improving the Group's cost structure to improve efficiency.
Capacity of Guangdong Schools Expanded
The first-phase new campus of Huashang College in Sihui City, Zhaoqing City, Guangdong Province that covers an area of approximately 248 Mu was put into use in September 2020. The land of approximately 234 Mu for the second-phase campus was secured on 12 October 2020, and its construction is in active progress. The first-phase new campus of Huashang Vocational College in Xinhui District, Jiangmen City, Guangdong Province that covers an area of approximately 683 Mu is expected to be put into use in September 2021. With the completion of Zengcheng, Sihui and Xinhui campuses in the core regions of the Greater Bay Area, the Group expects them to accommodate more than 80,000 students in total.
Guangdong Schools Made More Breakthroughs in Majors Setting
During the Reporting Period, the Group's domestic schools made breakthroughs in the development of majors. In March 2021, the Accounting major of Huashang College was included in the world-leading top majors for development, marking another breakthrough in the development of majors after the designation of the Accounting major and Financial Management major as leading top majors for development in Guangdong Province in 2019 and 2020, respectively. Besides, Huashang College's Journalism & Communication was also listed as a key development discipline subject in Guangdong Province.
During the Reporting Period, Huashang College offered 40 undergraduate majors, including 3 new majors, namely Primary Education, Nursing and Fintech, while Huashang Vocational College offered 52 junior college diploma programmes, including 8 new programmes, namely Early Education (a state-controlled major), Fintech Application, Software Technology, Cosmetics Operation and Management, Vision Technology, Image Design, Intelligent Control Technology and Electrical Automation Technology. These majors are closely linked to the needs for social development and highly sought after by parents and students. The Group believes that the new majors will help promote the development of relevant industries in the Greater Bay Area and be of great significance to the integration of talent cultivation and economic and social development.
Future Development Strategies
Given favourable national policies for private higher education, Edvantage Group will focus its efforts on developing brands, seeking endogenous growth and external expansion as well as cultivating talent to continuously promote its high-quality sustained growth.
With great emphasis on the building of teaching brands, the Group works to satisfy the needs of society and fit China's clear positioning of school operations for the cultivation of talent in relevant fields, namely, "featuring finance and economy (i.e. business programmes) to develop application-oriented talents equipped with interdisciplinary skills, innovative awareness and international perspectives and who feels socially responsible and aspires to serve society and the country". By doing so, the Group will keep exploring differentiated school operations such as international education, application-oriented teaching models and arrangement of innovative high-end majors according to the principle of "high-quality inputs for high-quality outputs." So far, Edvantage's education brands have become increasingly visible and widely and highly regarded by society, parents and students as these brands offer high-quality education services evidenced by high minimum admission scores and enrolment rates and quality education and employment prospects.
The Group has always been looking for targets for mergers and acquisitions (M&As) of colleges in the Pan-Pearl River Delta region with strong demand for higher education resources. The Group will select target schools mainly based on their regional advantages, performance in school operations, development potential, synergy and consideration for M&As. The Group has completed its first M&A of colleges (i.e. Urban Vocational College and Urban Technician College) since the listing on the Stock Exchange on 16 July 2019. The Group will make corresponding disclosures in due course if there are new projects in the future.
The Group believes that talent is the cornerstone of stable sustainable development of a company, thus recruiting talented people to achieve sustained high-quality development. Up to now, the Group has many industry experts and famed consultants in China and abroad as its school leaders or in the teaching team, among which Mr. Chan Sun-chi, a fellow of the Chinese Academy of Sciences, and Professor Jean-Marie Lehn, the Nobel Prize Winner in Chemistry, are the Principal and Honorary Principal of Huashang College, respectively. In the future, the Group will keep creating a favourable environment for its existing teaching team while bringing in best people to China and aboard.
Mr. Liu Yung Chau, Founder and Chairman of the Board, said, "Alongside the development of the Greater Bay Area and the supportive educational policies of the PRC, Edvantage Group, which was originated in the Greater Bay Area, has made significant achievements since its listing. Prior to the FY2021 interim results, the Group has already announced 4 positive profit alerts and expects an even rapider growth in FY2021 than in the previous 2 years, mainly benefitting from 4 business growth drivers, namely the construction of new campuses, implementation of conversion, M&A and additional majors setting. Edvantage Group will proactively push forward with the vigorous development of domestic and overseas academic education and vocational education businesses. We have successfully expanded our domestic school network from Guangdong Province of the Greater Bay Area to Sichuan Province of the Chengdu-Chongqing Economic Circle. While endeavouring to enhance existing businesses, we are also earnestly seeking premium targets for M&A of colleges in regions favourable to school running. Looking forward, Edvantage Group will take both routes of endogenous growth and external expansion and proactively explore new businesses, aiming to grow into a renowned education brand in China and worldwide, thus continuously creating values for shareholders."
Note: (1) Vocational education business revenue will be included in the main business revenue starting from FY2021. In fiscal year 2020, this part of the revenue was reflected in other income at approximately RMB 15 million;
(2) Adjusted net profit is the net profit with two one-time adjustments: 1) Exchange gains and losses (FY2021 interim: loss of RMB28,255,000; FY2020 interim: loss of RMB2,364,000); 2) Share-based payment related to employee incentive equity and share plans (FY2021 interim: RMB6,888,000; FY2020 interim: RMB1,345,000);
(3) The total number of student enrolments of Guangzhou Huashang College, Guangzhou Huashang Vocational College, Urban Vocational College of Sichuan, Urban Technician College of Sichuan, Global Business College of Australia, Edvantage Institute Singapore and Edvantage Institute Australia for the 6 months ended 28 February 2021;
(4) Dividend payout ratio: based on the 30% dividend policy disclosed in the Company's prospectus
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