China YuHua Education (6169) H2 2024 earnings summary

Executive summary

• Revenue increased 4.4% year-over-year to RMB2,485.3 million, driven by higher student enrolment.

• Adjusted Net Profit attributable to owners fell 48.3% to RMB500.8 million, mainly due to increased investment in teaching and facilities and goodwill impairment.

• Net profit attributable to owners dropped 64.9% to RMB398.7 million, with net profit margin declining to 16.1% from 47.7%.

• The company reached an agreement with bondholders to settle outstanding convertible bonds, including partial redemption and conversion to equity.

• Disposal of Thai Education Holdings Co., Ltd. was agreed for HK$240 million, with an estimated gain of RMB120 million upon completion.

Financial highlights

• Revenue: RMB2,485.3 million (up 4.4% year-over-year).

• Gross profit: RMB982.3 million (down 14.4% year-over-year); gross margin fell to 39.5%.

• Adjusted Gross Profit: RMB1,026.9 million (down 13.8% year-over-year); margin at 41.3%.

• Adjusted Net Profit: RMB500.8 million (down 48.3% year-over-year); margin at 20.2%.

• Net profit attributable to owners: RMB398.7 million (down 64.9% year-over-year).

• Basic EPS: RMB0.11 (down from RMB0.32); Diluted EPS: RMB0.11 (down from RMB0.24).

Outlook and guidance

• Focus on expanding educational infrastructure, opening new campuses, and investing in vocational education.

• No final dividend recommended for the year.

• Management expects sufficient liquidity to meet obligations following bond restructuring and asset disposal.