Strong growth on the back of solid fundamentals
HONG KONG, CHINA - MediaOutReach - 19 August 2019 - Minsheng EducationGroup Company Limited ("Minsheng Education"or the "Group", stockcode: 1569) announced its interim results for the six months ended 30 June 2019("Review Period").
- Revenue increased by 66.4% to RMB526.4 million (1H 2018: RMB316.3million)
- Gross profit grew by 62.6% to RMB306.5 million (1H 2018: RMB188.5million)
- Adjusted net profit increased by 2.5% to RMB232.8 million (1H 2018:RMB227.2 million)
- Student enrollment reached 74,450, representing a year-on-year increaseof 71.8% (1H 2018: 43,344 students)
For the six months ended 30 June 2019, benefitedfrom external mergers and acquisitions, as well as organic growth, the totalstudent enrollment of Minsheng Education has reached a record high of 74,450students. The Group's revenue rose significantly to approximately RMB526.4million, representing an increase of 66.4% over the corresponding period lastyear. Gross profit increased by approximately 62.6% to approximately RMB306.5million, while the gross profit margin remained stable.
The Group's profit for the period amountedto approximately RMB203.7 million, representing a 7.8% decline as compared tothe same period last year. The decrease was mainly due to the decline in fairvalue gains on an equity investment at fair value through profit or loss duringthe Review Period in 2019. The core business of Minsheng Education grewsteadily during the Review Period, with a 2.5% growth in adjusted net profit toapproximately RMB232.8 million.
BusinessReview during the Review Period
As of 30 June 2019, MinshengEducation operated and/or managed 11 schools in China, primarily offeringformal higher education, including formal undergraduate education and juniorcollege education. Student enrollment has reached 74,450 students in aggregate,representing a significant increase of 71.8% year-on-year and setting a newrecord. In addition, the Group has entered into agreement for the acquisitionof three undergraduate universities in Anhui province, Hebei province andJiangxi province, the financial results of which will be consolidated into theGroup's accounting statements upon completion of necessary approval procedures.
In respect of theexternal mergers and acquisitions, Minsheng Education acquired Qufu FareastVocational and Technical College (""Fareast College") in November 2018 andstarted its entrustment management in February 2019. In March 2019, MinshengEducation acquired Nanchang Vocational University, which is one of the first 15 pilot vocationalundergraduate institutions in the PRC. Enrollment of thefirst batch of undergraduate students will commence in September 2019.
As far as organic growth is concerned, theGroup further expanded its continuing education and vocational qualificationtraining business. Pass College of Chongqing Technology and Business Universityhas admitted 3,704 adult students for degree and junior college programs, whileChongqing College of Humanities, Science and Technology has trained a total of4,652 people for the teacher qualification certificates.
During the Review Period, Minsheng Educationhas become one of the constituents of the MSCI China All Shares Small CapIndex. Prior to this, Minsheng Education has already been included as aconstituent of the Hang Seng Composite Index and the Hang Seng Stock ConnectHong Kong Index. These demonstrate the capital market's recognition to theGroup. The inclusion into these indices will help expand the Group'sshareholder base and increase its liquidity, thereby creating value forshareholders and strengthening the Group's reputation in the capital market.
The schools of the Group have been committed tocultivating professional talents with skills they can apply in theiroccupations. In the first half of 2019, the Chinese government announced aseries of policies and documents to promote the integration of enterprises withvocational schools and universities, encouraging the cultivation ofapplication-oriented talents and diversification of vocational schools.Benefiting from the policy of recruiting one million students in highervocational colleges as stated in the Chinese government work report, theGroup's student enrollment quota for undergraduate universities and juniorcolleges in the 2019-2020 school year will be increased by 7.3% and 27.9%respectively.
According to the official statistics in 2018, thereare 750 private higher education colleges in China (including 265 independentcolleges). The distribution of schools is relatively scattered and theconcentration of the sections is low. Leveraging the extensive experience inoperations and mergers and acquisitions in the education industry, MinshengEducation will seize the opportunities brought by government policies andfurther expand the Group's school network and the number of students throughthe acquisition of high-quality undergraduate universities, with the aim tocultivate sophisticated talents with skills they can apply, so as to lay afoundation for the Group's long-term development.
Mr. Li Xuechun, Chairman of the Board ofdirectors of Minsheng Education, said, "China has introduced a series ofpolicies on vocational education reform recently. We are optimistic about theprospects of the private higher education sector and will continue to invest inthe higher education and vocational education sectors. We will continue to bemarket-oriented and will cultivate for the society sophisticated talents withskills they can apply, so as to create higher value for the Group and itsshareholders."
About Minsheng Education Group Company Limited (Stock code: 1569)
Minsheng Education Group CompanyLimited, listed on the Main Board of the Hong Kong Stock Exchange on 22 March2017, is the first higher education operator that went public in Hong Kong andone of the largest private higher education providers in the People's Republicof China (the "PRC"), focusing on cultivating high-quality practical-orientedtalents. As of 30 June 2019, the Group operated seven higher educationinstitutions, two secondary vocational schools and two high schools. The sevenhigher education institutions are Chongqing College of Humanities, Science andTechnology, Dianchi College of Yunnan University, Pass College of ChongqingTechnology and Business University, Chongqing Vocational College of Applied Technology,Chongqing Electronic Information College, Inner Mongolia Fengzhou VocationalCollege (Qingcheng Branch) and Qufu Fareast Vocational and Technical College.Minsheng Education primarily offers formal higher education, includingundergraduate and vocational programmes. For further details, please visit: https://www.minshengedu.com