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Chinese education stocks rally

Tiger Newspress2021-09-22

(Sept 22) Gaotu Techedu rose over 10%. TAL Education jumped over 5%, New Oriental Education & Technology Group advabced over 4%.

Beijing-based Gaotu Techedu is soaring after Q2 netrevenuesrose 35.3% Y/Y to RMB2.23B.

The company said the increase was mainly driven by the growth in paid course enrollments for K-12 courses during the period from the Q4 2020 to Q2 2021, which was contributed by both first-time paid course enrollments and retention of existing students.

Q2 net revenues was partially attributable to the paid course enrollments Q4 2020.

Net revenues of online K-12 courses increased 51.0% Y/Y to RMB2.09B.

"In the second quarter, we have upgraded our organizational structure. We will continue to develop in the area of professional education, STEAM education, vocational education and product digitalization. In exploring professional education, the public office exam sector has maintained its relatively high level; paid users in the financial certificate sector have increased 4 times year over year," said CFO Shannon Shen.

Cost of revenues rose by 100.8% to RMB724.3M, mainly due to increase in recruitment, compensation and learning material cost and rental expenses.

Non-GAAP net loss was RMB763.9M, compared with non-GAAP net income of RMB72.7M in the prior year period.

Net loss was RMB918.8M, compared with net income of RMB18.6M in Q2 2020.

Gross profit increased 16.9% to RMB1.51B.

However, gross profit margin decreased to 67.6% from 78.1% in Q2 2020.

The decrease was mainly due to the increase in compensation for instructors.

Non-GAAP gross profit increased by 18.2% to RMB1.54B.

Meanwhile, non-GAAP gross profit margin decreased to 69.1% from 79.1% in the same period of 2020.

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Comment17

  • lemms
    ·2021-09-27
    @Sissiclassic do you think the education firms have found the niches to survive after the recent bloodbath? 
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  • Sap
    ·2021-09-23
    Brave hearts who are buying this
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  • FrickL
    ·2021-09-23
    Like pls ?
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  • Tmchoo
    ·2021-09-23
    .
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    • hpt
      .
      2021-09-24
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  • lsn_9812
    ·2021-09-23
    ???
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  • CINDYTAN
    ·2021-09-23
    [微笑] 
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    • Tmchoo
      .
      2021-09-23
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  • andrew123
    ·2021-09-23
    Wow. Wat happen to the new regulation? Guess when come to education, parent are willing every last dollar to make sure their child do not lose out
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    • 滚筒
      Wondering when did q2 2021 end... Up to June, before the regulation thing happened?
      'aybe I missed something, cant explain why ppl are buying on past revenue? The regulation impact is yet to be seen?
      2021-09-23
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  • koolgal
    ·2021-09-23
    Great news for investors who invested in Chinese Education Stocks! ??
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    • koolgal
      Thanks for sharing a different opinion.  You certainly have a valid point.  Best is to proceed with care in times like this. ??
      2021-09-23
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    • RDPD富爸穷爸
      I have a different view though. With new regulation on non profit for china education stocks, I don't see much growth in this sector. If price rises, it may be dead cat bounce. Just my thought ?
      2021-09-23
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    • koolgal
      Thanks ??
      2021-09-23
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    View more 2 comments
  • ming22
    ·2021-09-23
    Go go go EDU 
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  • Min_max
    ·2021-09-22
    some in the education industry have relatively thin margins but the services they provide are essential 
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    • vic78
      ?
      2021-09-23
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  • WChen91
    ·2021-09-22
    ?
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  • Calvinq
    ·2021-09-22
    Like comment pls. GOTU ?
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    • WenJieChan
      [微笑]
      2021-09-23
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    • andrew123
      done.like back
      2021-09-23
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    • WChen91
      ??
      2021-09-22
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  • PanaCota
    ·2021-09-22
    Ok
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  • HeroSmurf
    ·2021-09-22
    Gunning for more upward movements :)
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    • Calvinq
      ?
      2021-09-22
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  • glorify
    ·2021-09-22
    ???總有一天等到你! 繼續加油!希望所有中國股也跟着上升!???????
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    • ming22
      Yes, looking forward
      2021-09-23
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    • Zero_onezero
      yes
      2021-09-22
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  • Tygress
    ·2021-09-22
    Great for temasek
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    • Nobi
      Hahaha same thought
      2021-09-22
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  • arachno73
    ·2021-09-22
    Rise rise rise! 長長長!
    Reply
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