China East Education (667) H2 2024 earnings summary

Executive summary

• Revenue increased by 3.5% year-over-year to RMB4,116 million, despite a 6.2% decline in new student enrollments and new customer registrations.

• Net profit surged 88.0% year-over-year to RMB513 million, with adjusted net profit up 86.6% to RMB525 million.

• Gross profit rose 10.8% to RMB2,115 million, and gross margin improved to 51.4% from 48.0% due to cost control.

• The group operates 233 schools and centers across China, with a focus on vocational education in culinary arts, IT, auto services, and fashion/beauty.

Financial highlights

• Adjusted EBITDA increased 21.1% year-over-year to RMB1,376 million.

• Cost of revenue decreased by 3.3% to RMB2,002 million, mainly due to tighter cost controls.

• Selling expenses fell 6.1% to RMB974 million, and administrative expenses dropped 3.9% to RMB508 million.

• Final dividend proposed at HK$0.22 per share, up from HK$0.20 last year.

Outlook and guidance

• Plans to expand vocational education industrial parks and school network, targeting all provincial capitals.

• Strategy includes diversifying course offerings and leveraging third-party vocational skill recognition.

• Dividend policy aims to distribute at least 60% of net profit as cash dividends through 2027.