Strong growth on the back of solid fundamentals
HONG KONG, CHINA - Media OutReach - 19 August 2019 - Minsheng Education Group Company Limited ("Minsheng Education" or the "Group", stock code: 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: RMB316.3 million)
- Gross profit grew by 62.6% to RMB306.5 million (1H 2018: RMB188.5 million)
- 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 increase of 71.8% (1H 2018: 43,344 students)
For the six months ended 30 June 2019, benefited from external mergers and acquisitions, as well as organic growth, the total student enrollment of Minsheng Education has reached a record high of 74,450 students. The Group's revenue rose significantly to approximately RMB526.4 million, representing an increase of 66.4% over the corresponding period last year. Gross profit increased by approximately 62.6% to approximately RMB306.5 million, while the gross profit margin remained stable.
The Group's profit for the period amounted to approximately RMB203.7 million, representing a 7.8% decline as compared to the same period last year. The decrease was mainly due to the decline in fair value gains on an equity investment at fair value through profit or loss during the Review Period in 2019. The core business of Minsheng Education grew steadily during the Review Period, with a 2.5% growth in adjusted net profit to approximately RMB232.8 million.
Business Review during the Review Period
As of 30 June 2019, Minsheng Education operated and/or managed 11 schools in China, primarily offering formal higher education, including formal undergraduate education and junior college education. Student enrollment has reached 74,450 students in aggregate, representing a significant increase of 71.8% year-on-year and setting a new record. In addition, the Group has entered into agreement for the acquisition of three undergraduate universities in Anhui province, Hebei province and Jiangxi province, the financial results of which will be consolidated into the Group's accounting statements upon completion of necessary approval procedures.
In respect of the external mergers and acquisitions, Minsheng Education acquired Qufu Fareast Vocational and Technical College (""Fareast College") in November 2018 and started its entrustment management in February 2019. In March 2019, Minsheng Education acquired Nanchang Vocational University, which is one of the first 15 pilot vocational undergraduate institutions in the PRC. Enrollment of the first batch of undergraduate students will commence in September 2019.
As far as organic growth is concerned, the Group further expanded its continuing education and vocational qualification training business. Pass College of Chongqing Technology and Business University has admitted 3,704 adult students for degree and junior college programs, while Chongqing College of Humanities, Science and Technology has trained a total of 4,652 people for the teacher qualification certificates.
During the Review Period, Minsheng Education has become one of the constituents of the MSCI China All Shares Small Cap Index. Prior to this, Minsheng Education has already been included as a constituent of the Hang Seng Composite Index and the Hang Seng Stock Connect Hong Kong Index. These demonstrate the capital market's recognition to the Group. The inclusion into these indices will help expand the Group's shareholder base and increase its liquidity, thereby creating value for shareholders and strengthening the Group's reputation in the capital market.
The schools of the Group have been committed to cultivating professional talents with skills they can apply in their occupations. In the first half of 2019, the Chinese government announced a series of policies and documents to promote the integration of enterprises with vocational schools and universities, encouraging the cultivation of application-oriented talents and diversification of vocational schools. Benefiting from the policy of recruiting one million students in higher vocational colleges as stated in the Chinese government work report, the Group's student enrollment quota for undergraduate universities and junior colleges in the 2019-2020 school year will be increased by 7.3% and 27.9% respectively.
According to the official statistics in 2018, there are 750 private higher education colleges in China (including 265 independent colleges). The distribution of schools is relatively scattered and the concentration of the sections is low. Leveraging the extensive experience in operations and mergers and acquisitions in the education industry, Minsheng Education will seize the opportunities brought by government policies and further expand the Group's school network and the number of students through the acquisition of high-quality undergraduate universities, with the aim to cultivate sophisticated talents with skills they can apply, so as to lay a foundation for the Group's long-term development.
Mr. Li Xuechun, Chairman of the Board of directors of Minsheng Education, said, "China has introduced a series of policies on vocational education reform recently. We are optimistic about the prospects of the private higher education sector and will continue to invest in the higher education and vocational education sectors. We will continue to be market-oriented and will cultivate for the society sophisticated talents with skills they can apply, so as to create higher value for the Group and its shareholders."
About Minsheng Education Group Company Limited (Stock code: 1569)
Minsheng Education Group Company Limited, listed on the Main Board of the Hong Kong Stock Exchange on 22 March 2017, is the first higher education operator that went public in Hong Kong and one of the largest private higher education providers in the People's Republic of China (the "PRC"), focusing on cultivating high-quality practical-oriented talents. As of 30 June 2019, the Group operated seven higher education institutions, two secondary vocational schools and two high schools. The seven higher education institutions are Chongqing College of Humanities, Science and Technology, Dianchi College of Yunnan University, Pass College of Chongqing Technology and Business University, Chongqing Vocational College of Applied Technology, Chongqing Electronic Information College, Inner Mongolia Fengzhou Vocational College (Qingcheng Branch) and Qufu Fareast Vocational and Technical College. Minsheng Education primarily offers formal higher education, including undergraduate and vocational programmes. For further details, please visit: http://www.minshengedu.com