Minsheng Education Group Company Limited ("Minsheng Education" or the "Group," Stock code: 1569) has announced its audited annual results for the twelve months ended 31 December 2017 ("Period under Review").
- Revenue increased by 7.4% to RMB477.8 million (FY2016: RMB445.0 million)
- Gross profit grew by 7.8% to RMB278.7 million (FY2016: RMB258.6 million). Gross profit margin improved to 58.3% (FY2016: 58.1%)
- Core net profit increased by 31.9% to RMB 310.4 million (FY2016: RMB235.3 million). Core net profit margin increased to 65.0% (FY2016: 52.9%)
- Annual net profit increased by 4.4% to RMB 260.9million (FY2016: RMB249.7 million)
- Basic earnings per share were RMB6.86 cents (FY2016: RMB8.00 cents)
Minsheng Education recorded a revenue of RMB 477.8 million for the twelve months ended 31 December 2017, increasing by approximately 7.4% when compared to the corresponding period of the previous year. Gross profit rose by 7.8% to approximately RMB278.7 million, with gross profit margin up to approximately 58.3%. Net profit was approximately RMB 260.8 million, rising by 4.4% compared to the corresponding period of the previous year. Excluding the listing-related expenses, unrealized exchange loss and share option expenses, the core net profit surged by 31.9% to RMB310.4 million as core net profit margin grew to 65.0%. Basic earnings per share amounted to RMB6.86 cents. The Board does not recommend an annual dividend for the twelve months ended 31 December 2017.
Mr. Li Xuechun, Chairman of Minsheng Education, said, "Minsheng Education intends to expand its school network and increase its market penetration and its market share in private higher education sector in the PRC. The management team will identify and evaluate potential acquisition target across China to solidify our position as one of the largest private provider of formal higher education in China, thus enhancing the value of the Group, further consolidate and expand the Group's competitive advantage to create long term and high value returns to shareholders."
Actively Expands School Network
The Group had an aggregate of 41,120 students enrolled at 5 schools that it owned and operated as at 31 December 2017, namely, Chongqing College of Humanities, Science and Technology, Pass College of Chongqing Technology and Business University, Chongqing Vocational College of Applied Technology, Inner Mongolia Fengzhou Vocational College (Qingcheng Branch) and Chongqing Electronic Information College. Besides, Laoling Minsheng Secondary Vocational School, the sixth school of the Group, is expected to enroll its first batch of students in September 2018. In addition, the People's Government of Laoling (the"Laoling Government") and Bureau of Education of Laoling have entrusted the management and operation of Laoling Secondary Vocational and Technical School to Laoling Minsheng Secondary Vocational School.
In November 2017, Chongqing Yuecheng Zhiyuan Education Technology Co., Ltd. ("Chongqing Yuecheng"), a consolidated affiliated entity of the Company, signed an agreement to increase capital in Chongqing Electronic Information College. Pursuant to the agreement, Chongqing Yuecheng would make a capital contribution of RMB125 million to Chongqing Electronic Information College, increasing its stake in operation of the college to 51%, and all procedures concerned were completed in February 2018.
On 12 February 2018, Chongqing Jierui Education Technology Co., Ltd. ("Jierui"), a company designated by the Company, entered into an agreement and a supplemental agreement (collectively, the"Laoling Agreements") with the People's Government of Laoling (the"Laoling Government") in relation to the proposed establishment of Laoling Senior High School Affiliated with Minsheng Education Group (the "Minsheng Laoling High School"). The establishment of the Minsheng Laoling High School represents the Group's step in expanding the scope of its businesses into the high school market in the PRC.
Growing of teacher qualifications
As at 31 December 2017, the number of school teachers has increased by approximately 286 or approximately 26%. At the same time, the Group has recruited more experienced personnel in various positions. The Group has implemented a job competition mechanism for mid-level management staff in its Pass College of Chongqing Technology and Business University and Chongqing Vocational College of Applied Technology.
Upgrade and transformation of teaching facilities
The Group has further improved the teaching conditions in 2017. Chongqing College of Humanities, Science and Technology has recently built the Innovation and Entrepreneurship College and the Innovation and Entrepreneurship Training Base; Chongqing College of Humanities, Science and Technology and Chongqing Vocational College of Applied Technology have refurbished their stadiums, student apartments in Pass College of Chongqing Technology and Business University and Chongqing Vocational College of Applied Technology have configured new facilities, and Shandong Laoling Minsheng Secondary Vocational School has finished the new campus planning, and has started the basic construction.
Seek acquisition opportunities and formulate organic growth strategyGoing forward, the Group will expand its school numbers and student sizes through mergers and acquisitions and internal growth. It will explore the investment opportunities in independently organized ordinary undergraduate higher education institutions; independent colleges with preliminary conditions to be converted to independently organized ordinary undergraduate higher education institutions; higher vocational (junior) colleges with preliminary conditions to be upgraded to independently organized ordinary undergraduate higher education institutions; and specialized secondary colleges and high schools.
Expand into the high school market and extend its presence in the international teaching arena
The Group will expand the scope of business into the high school market in the PRC through the establishment of high schools and mergers and acquisitions of high schools with both good brand name and good quality. To expand the internationalised school operation, the Group will choose universities with both good brand name and good quality in Europe and the United States as its acquisition targets. It will set up a marketing department and an international college in each school to carry out a variety of models of cooperation in operating schools and cooperate with famous international universities to carry out network teaching.
The Group will gradually expand the teaching-by-network scope and together with its campuses achieve effective information management and services to improve the centralised management, the Group's schools share courses with a high level of high-quality teacher resources and logistics supply, including the implementation of a unified tender and procurement for large amounts procurement, and for building construction, aimed at strengthening management.
About Minsheng Education Group Company Limited (Stock code: 1569)
Minsheng Education Group Company Limited has been listed on the Main Board of the Hong Kong Stock Exchange since 22 March 2017, is one of the largest private providers of higher education in China. As at 31 December 2017, the Group operated five schools in the People's Republic of China (the "PRC"), namely Chongqing College of Humanities, Science and Technology, Pass College of Chongqing Technology and Business University, Chongqing Vocational College of Applied Technology, Inner Mongolia Fengzhou Vocational College (Qingcheng Branch). The sixth school of the Group, Laoling Minsheng Secondary Vocational School is under construction. In addition, Laoling Secondary Vocational and Technical School will be managed and operated by Laoling Minsheng Secondary Vocational School under an entrustment management arrangement. The Group primarily offers formal higher education, including formal undergraduate education and junior college education. For further details, please visit: http://www.minshengedu.com
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