The CEO of Fenbi has once again been forced to issue a public apology.
On June 3rd, while delivering a speech at the School of Philosophy at Renmin University of China, CEO Zhang Xiaolong lost his temper. He berated audience members, stating they "deserved to be jobless" and had "no skills other than trying to worm their way into the system and become civil servants to idle away their lives." He then stormed out of the event.
Following the incident's exposure online, netizens widely condemned his behavior as hypocritical. On June 4th, Zhang Xiaolong issued a signed letter of apology via Fenbi's official Weibo account.
As the controversy spread, Fenbi's stock price continued to decline. By the market close on June 8th, Fenbi's shares were trading at HK$0.59, giving the company a market capitalization of just HK$13.21 billion. This represents a staggering loss of over HK$300 billion from its peak valuation.
The erosion in market value coincides with underlying business challenges. In 2025, Fenbi reported annual revenue of RMB 2.677 billion, a year-on-year decrease of 4.06%. It recorded a net profit attributable to shareholders of RMB 198 million, down 17.3% year-on-year, placing the company in an awkward position of declining both revenue and profit.
Confronted with this performance pressure, Fenbi is attempting to boost results by investing in AI while simultaneously pushing for a transformation into a broader employment services enterprise.
In 2025, Fenbi announced it would allocate all its unused IPO proceeds, totaling HK$60.8 million, to investments in the AI sector. That same year, the company also launched a comprehensive employment service product called the "Premium Employment Class."
However, judging by its current market valuation, Fenbi's transformation efforts have yet to gain recognition from the capital markets.
Controversial Remarks Spark Public Backlash
The company, which built its business on civil service exam preparation, found its reputation damaged by its own founder's comments.
According to the university's prior notice, the event was meant to be a Q&A session on exam preparation and job-seeking skills for liberal arts students. However, before starting, Zhang changed the topic to "Career Planning in the AI Era." Midway through the lecture, Zhang stated that only a minority of students who enrolled in Fenbi's courses succeeded in passing the exams, suggesting Fenbi primarily provided "emotional value" to most students and urging the audience to learn how to use AI.
He then began boasting about his personal wealth, claiming to have earned RMB 53 million from stock trading using AI in May. Frustrated by the audience's lukewarm reaction, he lashed out with the remarks that later went viral online.
After venting his frustration, Zhang left the venue abruptly. As his comments spread, public anger grew.
In his subsequent apology letter, Zhang expressed regret for his "improper words and actions" to the university's faculty and students and stated his willingness to take responsibility.
Furthermore, citing informed sources, it was reported that Zhang Xiaolong would no longer participate in Fenbi's campus lecture events.
Nevertheless, the fallout continued. Affected by the negative publicity, Fenbi's share price kept falling. On June 4th, the stock closed down 8.96% at HK$0.61. By June 5th, it had fallen another 3.28% to close at HK$0.59.
This is not the first time Zhang Xiaolong has sparked controversy with his remarks.
In 2017, he publicly insulted Baidu on Weibo, calling it "the worst company in China," leading to a lawsuit where he was ordered to pay RMB 120,000 in compensation and post an apology on his Weibo for 48 hours.
In 2018, he drew public criticism for ranting about Beijing's household registration system for schools after claiming he paid RMB 80 million in taxes but couldn't get his child into a private school, later issuing a lengthy apology.
In 2020, he publicly criticized a poverty-alleviation TV show he participated in on Hunan Satellite TV, accusing it of using editing to manipulate emotions and claiming a guest on the show, Shen Mengchen, acted arrogantly. He later apologized, attributing his comments to being "drunk."
Financial Performance and Market Value Deteriorate
Public information shows Zhang Xiaolong was born in 1983 in Ziyang, Sichuan. After completing his undergraduate studies, he pursued a combined master's and doctoral program in philosophy at Sun Yat-sen University, during which he worked part-time at Huatu Education.
In 2013, Zhang joined Yuanfudao to oversee its public exam preparation project. Two years later, Fenbi spun off independently, with Zhang becoming its CEO.
Benefiting from the boom in civil service exam preparation, Zhang led Fenbi to a successful listing in Hong Kong in 2023. Initially, the company enjoyed strong market favor, with its market capitalization once reaching as high as HK$33.679 billion.
However, with increasing competition in the exam preparation industry in recent years, Fenbi is facing significant growth pressure.
Financial data shows that in 2024, Fenbi's annual revenue was RMB 2.79 billion, a decrease of 7.66% year-on-year. Its net profit attributable to shareholders was RMB 240 million, an increase of 27.05%, presenting an awkward picture of profit growth without revenue growth.
Entering 2025, Fenbi's performance came under further pressure. Annual revenue was RMB 2.677 billion, down 4.06% year-on-year, while net profit attributable to shareholders was RMB 198 million, a decrease of 17.3% from 2024.
According to the company's financial report, its revenue primarily comes from training services and book sales/other businesses. In 2025, income from both major segments declined.
During the reporting period, revenue from training services was RMB 2.289 billion, a decrease of 2.2% year-on-year. Fenbi attributed this mainly to a decline in the sales volume of its training services. Low-price competition strategies from smaller domestic players in the recruitment exam training industry have led to a drop in revenue from Fenbi's traditional large-class courses.
These large-class courses are primarily fully online live training courses, typically priced between RMB 300 and RMB 1,280 per subject, with class sizes exceeding 1,000 students and durations of 30 to 90 days. In 2025, revenue from these large classes contributed RMB 423 million, a decrease of 16.71% from 2024.
Additionally, amid intensified market competition and a consumer shift from physical to e-books, Fenbi's book sales declined. In 2025, revenue from book sales and related businesses was RMB 387 million, down 13.73% year-on-year.
While its core business slowed, Fenbi's user growth has also stagnated.
Financial reports show that from 2021 to 2024, Fenbi's monthly active users were 6.5043 million, 7.9452 million, 9.0782 million, and 9.1395 million respectively, with year-on-year growth rates of 22.15%, 14.26%, and 0.68%, indicating a逐年下降 decline in user growth rate. In 2025, the company's average monthly active users decreased by 0.2% year-on-year to 9.1221 million.
Can AI Investment Drive New Growth?
Facing industry headwinds, Fenbi is choosing to leverage AI to improve performance while attempting to transform from an exam training company into an employment services enterprise.
In July 2024, Fenbi launched its self-developed vertical domain large model and subsequently rolled out products like "Fenbi AI Teacher," "AI Interview Review," and "AI Practice Question System Class."
In 2025, Fenbi further increased its AI focus, announcing it would invest all its unused IPO proceeds of HK$60.8 million into the AI field. Of this, HK$12 million is for investing in AI vertical models, technology R&D, and AI product commercialization; the remaining HK$48.8 million is earmarked for investment in high-end AI-related talent and infrastructure.
The initial effects of Fenbi's AI strategy are becoming visible. The financial report indicates that in the eight months from April to December 2025, nearly 300,000 students paid for the AI Practice Question System Class. However, in 2025, revenue from this product was only RMB 38 million, meaning it has not yet become a major revenue pillar.
Fenbi's management stated that in 2026, the company will continue to accelerate the development of online AI-based courses. For written exam stages, in addition to the already launched AI courses for civil servants and state-owned enterprises, Fenbi will also promote the launch of AI courses for teacher recruitment and other related written exam subjects.
For interview stages, management expects that the launched AI Interview System Class will become a significant driver of profit growth in 2026.
However, many observers believe that the practical implementation of AI faces challenges and is unlikely to substantially boost profits in the short term.
Notably, at the end of 2025, Fenbi also launched the comprehensive employment service product "Premium Employment Class." This product, with a service cycle of one or two years, aims to provide students with full-chain support from career path planning and application guidance to written exam and interview preparation.
According to Fenbi's official statement, the birth of the Premium Employment Class marks the company's continuous expansion of its business boundaries, moving from focusing solely on public sector exam training towards the broader comprehensive employment services field.
In February of this year, CEO Zhang Xiaolong explicitly stated that Fenbi would gradually transform into a "human resources integration enterprise."
However, due to the vast demand in the employment market, other companies and institutions like Zhonggong Education, New Oriental, Gaotu, and Gaodun have also entered the fray. Even after its transformation, Fenbi will still face fierce market competition.
The future development of Fenbi in the wake of this controversy remains to be seen.
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