A public spat has backfired for FENBI (02469.HK), with the company admitting its aggressive social media campaign failed to boost sales and instead invited ridicule. Between September 15 and 18, the former leading public exam training institution published a series of lengthy posts that escalated from accusing a rival of poaching staff to acknowledging its own missteps, ultimately landing the company at the top of Weibo's trending list.
The controversy began on September 17 when FENBI, a Hong Kong-listed public exam training leader, released a post titled "Who is the Conscience of the Public Exam Training Industry?" accusing Sihai Gongkao of luring away several of its interview instructors with annual salaries starting at 2 million yuan. In the same post, FENBI calculated that one rival's course generated a gross profit of 44 million yuan, with approximately 30 million yuan in profit after taxes, labeling Sihai Education as "the most profitable company in the industry." FENBI then declared it would slash interview course prices, stating, "This industry cannot allow interview instructors earning 2 million yuan a year. Next year, we will definitely bring down the price of interview classes."
However, the self-styled "rights defense" quickly became convoluted. Two days earlier, FENBI had already published posts titled "Salute to Outstanding Peers" and "Letter of Thanks," openly admitting its newly launched National Day question-banking program was a "pixel-by-pixel imitation" of Chaoge Education's curriculum, even sharing a cost breakdown to challenge Chaoge's claims of not making money. This combination of accusing others of poaching while confessing to plagiarism left outsiders baffled.
By September 18, FENBI's tone shifted dramatically with a post titled "Apology," admitting, "We are sorry for constantly occupying public resources these past few days. To grab attention, we joked around and acted out, which was truly unsightly." The company acknowledged that after the hype, sales staff reported, "Not only did courses not sell, but many were refunded." On the same day, FENBI launched low-priced products, including a 12.8-yuan course series and 39-yuan test papers, stating bluntly, "The main goal is to strike at competitors, attract traffic, and hopefully sell some more expensive courses later."
Regarding the core allegation of 2-million-yuan poaching, Sihai Gongkao's response was telling. A source close to Sihai confirmed that "an instructor did leave FENBI to join us," and the instructor publicly shared the new position on social media. However, Sihai declined to confirm the 2-million-yuan salary, saying, "We don't know which specific instructor or salary details are being referred to."
First-Time Net Loss of 184 Million Yuan
FENBI's agitation stems largely from deteriorating operational performance. According to its 2026 interim report, revenue fell 16.3% year-on-year to 1.248 billion yuan, with a net loss of 184 million yuan compared to a net profit of 227 million yuan in the same period last year. This marks FENBI's first loss since its 2023 listing, with an adjusted net loss of 158 million yuan. The core driver of the revenue decline was training services, which account for over 85% of total revenue, falling 17.5% to 1.069 billion yuan in the first half. FENBI attributed the drop to fewer positions offered in civil service exams and intensifying industry competition.
Meanwhile, costs rose. Due to proactive workforce restructuring, FENBI paid substantial severance packages, causing the cost of training services to increase 8.6% year-on-year, while gross margin plummeted from 57.3% to 43.8%. Selling and marketing expenses grew 18.1% to 362 million yuan, and R&D spending rose 22.8% to 132 million yuan, primarily directed toward AI-related course commercialization. Adding to the pain, FENBI recorded investment losses after deploying its own funds into ETF products and listed securities starting in May, accumulating approximately $8.335 million (about 56.65 million yuan) in losses by July.
Staff attrition has also been a major headache. As of June 30, 2026, FENBI employed 5,963 people, down from 7,005 at the end of 2025, losing over 1,000 employees in six months, including 716 full-time lecturers, reduced from 2,870 to 2,154.
Navigating the Chaos
FENBI's predicament reflects the broader structural contradictions in the public exam training industry: participation rates have peaked, courses are increasingly homogenous, and price wars are spreading. Participation in public sector exam prep has reached 70% to 80%, with nearly 100% for interview stages, leaving little room for growth and turning market share battles into a zero-sum game. When course offerings are nearly identical, price becomes the only competitive lever. As FENBI admitted, it cut its system course price from 1,280 yuan to 980 yuan, "not out of sudden conscience, but because the product is increasingly hard to sell under competitive pressure from peers."
Smaller institutions are eroding market share with "zero-cost enrollment" and low-priced interview classes, while top players charge 10,000 to 20,000 yuan for 14-day interview programs; smaller rivals offer 21-day courses for just 4,800 yuan. FENBI's price cuts reflect an attempt to reclaim share through aggressive pricing, but this will inevitably squeeze already thin profit margins. The company also admitted that copying competitors' courses "was meant to ride the trend and devalue rivals, but it backfired—sales didn't rise, and it only highlighted their strengths."
In its struggle, FENBI is betting on AI, launching a 399-yuan AI question-banking class and AI interview feedback products to reduce dependence on star lecturers through standardization. However, results have been modest: the AI question-banking class generated only 38.1 million yuan in revenue for full-year 2025 and 42.2 million yuan in the first half of 2026, while "other training courses," including AI interview feedback, brought in just 13.2 million yuan, about 1% of total revenue.
During the four-day controversy, FENBI's stock initially rose then fell, ending nearly unchanged at 0.290 yuan per share, with a total market value of just 641 million Hong Kong dollars. "We argued, gained nothing, and only gave others a show," FENBI wrote in its apology.
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