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EQS-News / 25/11/2019 / 23:35 UTC+8
【For Immediate Release】 25 November 2019
Wisdom Education International Holdings Company Limited
(Stock code: 6068.HK)
Announces 2019 Annual Results
Revenue Increased by 34.9% YoY to RMB1,681.5 Million
Core Net Profit Surged by 33.1% YoY to RMB428.6Million
Financial Highlights
| RMB'000 |
For the year ended 31 August |
| 2019 |
2018 |
Change |
| Revenue |
1,681,530 |
1,246,920 |
+34.9% |
| Gross profit |
741,694 |
544,866 |
+36.1% |
| Core net profit |
428,610 |
321,967 |
+33.1% |
| Profit for the year |
353,578 |
307,182 |
+15.1% |
| Earnings per share (RMB cents) |
17.0 |
15.0 |
+13.3% |
| Interim dividend (HK$ cents) |
4.9 |
4.0 |
-- |
| Final dividend (HK$ cents) |
4.9 |
4.0 |
-- |
| |
2018/19
School Year |
2018/17
School Year |
Change |
| Total Student Enrolment |
54,420 |
43,230 |
+25.9% |
*Core net profit was derived from the profit for the year after adjusting for items not indicative of the Group's operating performances.
(Hong Kong - 25 November 2019) Wisdom Education International Holdings Company Limited ("Wisdom Education" or the "Company" together with its subsidiaries, the "Group", stock code: 6068.HK) is pleased to announce its annual results for the year ended 31 August 2019 (the "Year").
Strong revenue and core net profit growth
During the Year, the Group's total revenue increased by 34.9% year-on-year ("YoY") to RMB1,681.5 million (2018: RMB1,246.9 million), primarily due to the increase in revenue from tuition and boarding fees and the increase in revenue from ancillary services. Core net profit reached RMB 428.6 million (2018: RMB322.0 million), representing a YoY growth of 33.1%.
Adjusted gross profit margin edged up one percent point to 45.6% (2018: 44.6%) while gross profit increased 36.1% to RMB 741.7million (2018: RMB 544.9 million).
Earnings per share amounted to RMB 17.0 cents (2018: RMB15.0 cents). The Board of Directors recommends a final dividend of HK$4.9 cents per share. Together with the interim dividend paid of HK$4.9 cents per share, total dividend for the Year reached HK$9.8 cents per share.
Tuition and boarding fees show solid growth
During the Year, revenue from tuition and boarding fees increased by 36.2% to RMB1,145.5 million (RMB 841.2 million), largely due to the increase in total student enrolment and the increase in tuition
and boarding fees for the new students in Dongguan Guangming Secondary and Primary Schools and Dongguan Guangzheng Preparatory School.
Total student enrolment increased by 25.9% from 43,230 for the 2017/2018 school year to 54,420 for the 2018/2019 school year, primarily due to the increase in student enrolment of Dongguan Guangzheng Preparatory School and Huizhou Guangzheng Preparatory School, and the consolidation of Zhang Pu Longcheng Schools. Meanwhile, the normalized overall average tuition and boarding fees reached RMB21,146 (2018: RMB19,893), representing a YoY increase of 6.3%.
Expanding Capacity to accommodate rise in student enrolment
With a good reputation and strong brand awareness built on outstanding educational quality, the Group has established a proven track record in replicating its business and will continue to expand its school capacity to capture future growth.
The Group's total student capacity increased from 51,924 for the 2017/2018 school year to 63,000 for the 2018/2019 school year primarily due to the expansion of capacity of Dongguan Guangming Secondary and Primary Schools (after the acquisition of an adjacent campus) and Dongguan Guangzheng Preparatory School, the opening of Guang'an Guangzheng Preparatory School in September 2018 and the consolidation of Zhang Pu Longcheng Schools.
In September 2019, the Group has commenced operation of a total of three greenfield schools, which include Yunfu Guangming Foreign Language School ("Yunfu Guangming School") and Shunde Guangzheng Preparatory School in Guangdong provice, as well as Bazhong Guangzheng Preparatory School ("Bazhong Guangzheng School") in Sichuan province.
Bazhong Guangzheng School and Yunfu Guangming School have a maximum total capacity of
10,000 students and 10,680 students respectively, while the total maximum capacity of Shunde Guangzheng Preparatory School is 9,210 students.
The Group has also expanded the capacity of certain existing schools for the 2019/2020 school year in order to cope with the growth in student enrolment. Accordingly, the overall student capacity increased from approximately 63,000 for the 2018/2019 school year to approximately 70,000 for the 2019/2020 school year, representing a YoY growth of about 11.1%. The estimated maximum capacity of the Group will be expanded to more than 140,000 students assuming all available lands of the existing schools for expansion and those of the greenfield schools under development are fully utilized.
In order to sustain its future growth, the Company will continue to expand its school network in addition to increasing the capacity of existing schools. While the Group prefers building greenfield schools of relatively large scale on purchased land use rights for educational purposes, it will also explore the business potential of operating asset-light schools of smaller scale in Guangdong province.
Capturing opportunities in the Greater Bay Area
Looking forward, the Group is expected to enjoy a favorable business environment thanks to the robust economic development in the Greater Bay Area and the Chinese local governments' support for private education.
On 18 February 2019, the central government of China issued the Outline Development Plan ("Outline Development Plan") for the Greater Bay Area, which has drawn a road map to further transform the Greater Bay Area into a world-class city cluster and an international hub for technology and innovation. Particularly, one of the objectives set out in Chapter 8 of the Outline Development Plan is to create an education and talent hub in the region. The inflow of talent with their children to the Greater Bay Area is expected to create a promising environment for the growth of private primary and secondary education in Guangdong province.
Serving an important function of bridging the shortage of public education resources, the private education sector is also expected to receive strong support from the Chinese local governments. The growing demand for education resources coupled with the heavy share of public education expenditure by the local governments are likely to add pressure to provincial and municipal coffers, providing great motivation for them to support the development of private education. Public spending on education in China has increased over the years and over 90% of the public education expenditure is borne by local governments, making it a high percentage to their income and overall spending. For example, in Guangdong province, public education expenditure made up around 17% of the total government spending and was around 24% to its income in 2016.
The Board of Directors of Wisdom Education commented, "Focusing our development on the Greater Bay Area, we are in an advantageous position to capture the business opportunities arising from the prosperous economic growth in the region. Apart from the existing schools in Dongguan, Huizhou and Foshan, we have entered into cooperation or framework agreements with the local governments of Jiangmen, Guangzhou and Zhaoqing in respect of the proposed establishment of a private boarding school in each of these cities, achieving a potential coverage of as many as six Guangdong cities in the Greater Bay Area. We will continue to maintain top-notch educational quality and leverage on the favorable policies to achieve comprehensive coverage in all the nine Guangdong cities of the Greater Bay Area."
- End -
About Wisdom Education International Holdings Company Limited
Wisdom Education International Holdings Company Limited focuses on providing high quality PRC curriculum programmes for primary and secondary school students, with "serving the society with honesty and integrity through our services and cultivating talent with a warm and loving heart" as its educational objective. The Group is a leading premium primary and secondary schools operator in South China. Having a total enrolment of 60,116 students, the Group operates 14 premium private schools in 12 campuses, with six campuses located in Guangdong province, two in Shandong province, two in Sichuan province, and the other two in Liaoning province and Fujian province respectively.
For any enquiries, please contact Wisdom Education International Holdings Company Limited:
Carol Cheung
Tel: (852)3899 3500
Email: carolcheung@gdgzeg.cn
Document: http://n.eqs.com/c/fncls.ssp?u=TIPLIOWSMF
Document title: 6068_2019AR_Press Release_Eng_2019_1125_final
25/11/2019 Dissemination of a Financial Press Release, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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