China East Education (667) H1 2024 earnings summary

Executive summary

• Operates 234 schools and centers across China and Hong Kong, serving 144,793 average students/customers for the six months ended 30 June 2024, focusing on five vocational segments under seven brands.

• Revenue increased 1.6% year-over-year to RMB1,983 million for the six months ended 30 June 2024, despite a 7.7% decline in new student enrollments and new customer registrations.

• Net profit rose 33.2% year-over-year to RMB272 million, with adjusted net profit up 57.9% to RMB278 million, reflecting improved cost control and higher-value enrollments.

• Maintains a leading position in vocational training, with a mission to expand its network and enhance market leadership.

Financial highlights

• Gross profit increased 5.4% year-over-year to RMB1,051 million, with gross margin improving to 53.0% from 51.1% year-over-year.

• Adjusted EBITDA reached RMB715 million, up from RMB633 million year-over-year.

• Earnings per share (basic) were RMB0.1246, up from RMB0.0936 year-over-year.

• Cost of revenue decreased by 2.5% to RMB932 million due to tighter cost control.

• Selling expenses fell to RMB464 million, and administrative expenses remained stable at RMB256 million.

Outlook and guidance

• Plans to expand the school network to all provincial capitals and establish more Vocational Education Industrial Parks.

• Intends to diversify course offerings, explore new sectors like AI and healthcare, and strengthen school-enterprise cooperation.

• Ongoing development of Vocational Education Industrial Parks to consolidate market leadership and achieve cost synergies.

• No interim dividend declared for the period; focus remains on business expansion and capital investment.