Meten EdtechX Education Group Ltd. (Nasdaq: METX)
(“Meten EdtechX” or the “Company”), one of the leading
omnichannel English language training (“ELT”) service providers in
China, today announced its financial results for the first quarter
ended March 31, 2021.
|
Q1 2021 |
|
RMB (m) |
YoY (%) |
Gross billings |
175.4 |
40.9% |
Revenues |
206.6 |
13.8% |
General adult ELT |
67.0 |
20.0% |
Online ELT |
71.3 |
(7.5%) |
Overseas training services |
39.9 |
79.2% |
Junior ELT |
25.3 |
7.4% |
Junior ELT- under “Meten” brand |
17.8 |
286.3% |
Junior ELT- under “ABC” brand |
7.5 |
(60.6%) |
Gross Profit |
70.8 |
93.8% |
Gross Profit Margin |
34.3% |
14.2 ppts |
Adjusted net loss1 |
(53.2) |
46.9% |
1Non-GAAP measure. For more information about
non-GAAP financial measures, please see the section captioned
"About Non-GAAP Financial Measures" at the end of this press
release.
Highlights
-
1Q 2021 revenue increased 13.8% year-on-year to RMB206.6 million
(US$31.5 million), primarily as a result of the strong rebound in
gross billing after the impact of COVID-19 faded.
-
Supported by investments in the Junior ELT segments and new product
development, revenue for Junior ELT under the “Meten” brand
increased by 286.3% year-on-year in 1Q 2021 to RMB17.8 million
(US$2.7 million).
-
1Q 2021 gross profit increased 93.8% year-on-year to RMB70.8
million (US$10.8 million), primarily as a result of the improvement
of gross billings and operational efficiency. Gross profit margin
increased 14.2 percentage points year-on-year to 34.3%.
-
As of March 31, 2021, Meten EdtechX had 110 learning centers in
operation. To optimize the layout of offline centers, the Company
closed another 8 offline learning centers by the end of the first
quarter of 2021.
-
1Q 2021 adjusted net loss decreased 46.9% year-on-year to RMB53.2
million (US$8.1 million).
Alan Peng, Chief Executive Officer
of Meten EdtechX commented:
“We delivered Q1 revenue growth of 14.6%
year-over-year, ahead of expectations and reflecting our team’s
strong execution of our focused on optimizing management and
aligning our cost structure to the headwinds caused by COVID-19.
First quarter financial results reflect improvements in our gross
profit and margin, and significant reduction in our operating loss
and adjusted EBITDA compared to the same period for the prior year.
We leveraged our advantage of online and offline business to break
the time and space constraints of classroom education. We also
utilized big data and AI technology to develop personalized
teaching model and to improve teaching efficiency. As a result, we
achieved nearly RMB206.6 million in gross billing in the first
quarter of 2021. As an established education institution with a
track record of over 15 years, our highly experienced teachers,
high-quality education resources and excellent teaching results
contribute to our good reputation and improve our brand image and
awareness, and thus the proportion of overall word of mouth
marketing increased by 54.3% in the first quarter of fiscal year
2021.
We remain confident in our ability to deliver
strong growth in 2021 and continue to expect to drive strong
operating leverage in 2021.
We have seen a positive impact of blockchain on
the education industry, including applications to teacher
certification and platform management. As one of the first U.S.
listed education companies applying blockchain technology, we will
apply these technologies in credit incentives, teacher
certification and platform management. At the same time, we plan to
build an online merger offline (OMO) platform for blockchain
education applications. Looking forward, we will continue to focus
on our junior ELT business, carry out our plans to enter the junior
quality-oriented education market and introduce our ‘dual-teacher
classroom’ for ABC junior ELT services.”
Operational developments
|
1Q 2021 |
Student enrollments |
17,672 |
|
45.1% |
|
Course
withdrawal rate(1) (%) |
12.87% |
|
1.37
ppts |
|
(1) Refers to the amount of refunds issued in a
specific period of time as a percentage of the sum of the amount of
gross billings and the amount of refunds for such period.
|
|
|
March 31, 2021 |
Number of self-operated learning centers |
97 |
7.6%* |
Number of
franchised learning centers |
13 |
-* |
(* Change compared to the previous quarter
end)
Growing online and Junior student
enrollment
As of March 31, 2021, the number of registered
users for online courses increased by 31.4% year-on-year, up to
1.84 million, as the Company diversified course offerings and
leveraged cross-selling opportunities between offline and online as
its learning centers reopened. Supported by investments in the
Junior ELT segments and new product development, the number of
registered junior students for Junior ELT under the “Meten” brand
increased by 483% year-on-year as of March 31, 2021.
Continued product
innovation
Meten EdtechX continued to invest in product
development during the first quarter of 2021, leveraging the
several recently launched new products across both its offline and
online platforms. These include three new language (Japanese,
Spanish and Korean) products, K12 junior products and the “BiGao”
exam preparatory product for middle-school students. For the first
quarter ended March 31, 2021, the Company’s revenue derived from
Japanese, Spanish and Korean language training services was RMB 1.4
million (US$0.21 million).
Financial results
Revenues
In the first quarter of 2021, revenue amounted
to RMB206.6 million (US$31.5 million), an increase of 13.8%
year-on-year from RMB181.6 million in the first quarter of 2020,
primarily as a result of the strong rebound in gross billing after
the impact of COVID-19 faded.
For the general adult ELT, revenues increased
20% year-on-year, from RMB55.8 million in the first quarter of 2020
to RMB67.0 million (US$10.2 million) in the first quarter of 2021,
for the overseas training services, revenues increased 79.2%
year-on-year, from RMB22.3 million in the first quarter of 2020 to
RMB39.9 million (US$6.1 million) in the first quarter of 2021, and
for the Junior ELT, revenues increased from RMB23.5 million in the
first quarter of 2020 to RMB25.3 million (US$3.9 million) in the
first quarter of 2021, among which, revenue for Junior ELT under
“Meten” brand increased by 286.3% year-on-year in the first quarter
of 2021 to RMB17.8 million (US$2.7 million). These results were
achieved in the first quarter of 2021 when the regulatory
authorities required all off-campus training institutions to
suspend their business in Beijing. In the first quarter of 2021,
the Junior ELT under “ABC” brand operated only about half a month,
and as a result, revenue for Junior ELT under “ABC” brand decrease
by 60.6% year-on-year.
For the online ELT, revenues decreased 7.5%
year-on-year, from RMB77.0 million in the first quarter of 2020 to
RMB71.3 million (US$10.9 million) in the first quarter of 2021.
This slight decrease was mainly due to the fact that the Company’s
online ELT business reached a peak as a result of the COVID-19 in
the same period last year.
Cost of revenues
The Company’s cost of revenues consists
primarily of staff costs, property expenses, depreciation and
amortization, and other costs which primarily include consulting
fees, foreign teacher-related administrative expenses, and teaching
materials costs.
In the first quarter of 2021, cost of revenues
decreased by 6.4% to RMB135.8 million (US$20.7 million), from
RMB145.0 million in the first quarter of 2020.
Gross profit
In the first quarter of 2021, gross profit
increased by 93.8% to RMB70.8 million (US$10.8 million), from
RMB36.5 million in the first quarter of 2020, due to the
improvement of gross billings and operational efficiency.
For the first quarter of 2021, gross profit
margin increased by 14.2 percentage points to 34.3% from 20.1% for
the first quarter of 2020.
Operating expenses
In the first quarter of 2021, selling and
marketing expenses amounted to RMB70.4 million (US$10.7 million),
an increase of 2.6% from RMB68.6 million in the first quarter of
2020.
In the first quarter of 2021, research and
development expenses decreased by 40.1% year-on-year to RMB4.2
million (US$0.6 million), from RMB7.0 million in the first quarter
of 2020.
In the first quarter of 2021, general and
administrative expenses increased by 25.0% year-on-year to RMB81.3
million (US$12.4 million), from RMB65.0 million in the first
quarter of 2020. This increase was primarily due to an increase in
share-based compensation expenses.
Loss from operations
For the first quarter of 2021, loss from
operations was RMB85.1 million (US$13.0 million), compared to a
loss from operations of RMB104.1 million in the first quarter of
2020.
Net loss
For the first quarter of 2021, net loss was
RMB89.3 million (US$13.6 million), compared to a net loss of
RMB101.7 million in the first quarter of 2020.
Cash flow
For the first quarter of 2021, an outflow of
RMB53.7 million (US$8.2 million) was recorded, compared to an
outflow of RMB97.7 million in the first quarter of 2020.
Cash and cash equivalents
As of March 31, 2021, Meten EdtechX had RMB63.8
million (US$9.7 million) of cash and cash equivalents, compared to
RMB90.1 million as of December 31, 2020.
Outlook
Meten EdtechX plans to build an online merger
offline (OMO) platform for blockchain education applications. The
OMO platform will integrate the Company’s nationwide offline
learning centers with its online platform “Likeshuo”.
Meten EdtechX will continue to focus on
‘dual-teacher classroom’ for ABC junior ELT services. The Company
will carefully select the course content and electronic teaching
aids, conduct trainings for foreign teachers, guide them through
the qualification certification process, install hardware equipment
in the classrooms, and adopt standardized course materials and
curriculums.
Exchange Rate
The Company’s business is primarily conducted in
China and all of the revenues are denominated in Renminbi (“RMB”).
This announcement contains translations of certain RMB amounts into
U.S. dollars (“USD” or “US$”) at specified rates solely for the
convenience of the readers. Unless otherwise noted, all
translations from RMB to USD for the first quarter of 2021 are made
at the rate of RMB6.5518 to US$1.00, the exchange rate set forth in
the H.10 statistical release of the Federal Reserve Board on March
31, 2021, respectively. No representation is made that the RMB
amounts could have been, or could be, converted, realized or
settled into US$ at that rate on March 31 2021, as the case may be,
or at any other rate.
About Non-GAAP Financial
Measures
Meten EdtechX’s consolidated financial results
are presented in accordance with GAAP. However, to provide
meaningful supplemental information regarding its performance,
Meten EdtechX adopts the following measures which are defined as
non-GAAP financial measures by the SEC:
-
EBITDA: calculated by subtracting net interest income/loss and
adding back income tax expense and non-cash expense of depreciation
and amortization to a firm's net income/(loss).
-
Adjusted EBITDA: calculated by removing certain one-off, irregular
and/or non-recurring items from EBITDA such as offering
expenses and share-based compensation expenses.
-
Adjusted net (loss)/income: calculated by adding back certain
one-off, irregular and/or non-recurring items to net income/loss
such as offering expenses and share-based compensation
expenses.
The presentation of these non-GAAP financial
measures is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP.
About Meten EdtechX
Meten EdtechX is one of the leading ELT service
providers in China, delivering English language and skills training
for Chinese students and professionals. Through a sophisticated
digital platform and a nationwide network of learning centers, the
Company provides its services under three industry-leading brands:
Meten (adult and junior ELT services), ABC (primarily junior ELT
services) and Likeshuo (online ELT). The Company offers superior
teaching quality and student satisfaction, served by cutting edge
technology deployed across its business, including AI-driven
centralized teaching and management systems that record and analyze
learning processes in real time.
The Company is committed to improving the
overall English language competence of the Chinese population to
keep abreast of the rapid development of globalization. Its
experienced management is focused on further developing its digital
platform and expanding its network of learning centers to deliver a
continually evolving service offerings to a growing number of
students across China.
For more information, please
visit: https://investor.metenedu-edtechx.com.
Safe Harbor Statement
This announcement contains forward-looking
statements that involve risks and uncertainties. These statements
are made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as “will,”
“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,”
“estimates” and similar statements. Statements that are not
historical facts, including statements about the Company’s beliefs
and expectations, are forward-looking statements. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: the impact of the COVID-19 outbreak, our
ability to attract students without a significant decrease in
course fees; our ability to continue to hire, train and retain
qualified teachers; our ability to maintain and enhance our brands;
our ability to effectively and efficiently manage the expansion of
our school network and successfully execute our growth strategy;
the outcome of ongoing, or any future, litigation or arbitration,
including those relating to copyright and other intellectual
property rights; competition in the English language training
sector in China; changes in our revenues and certain cost or
expense items as a percentage of our revenues; the expected growth
of the Chinese English language training and private education
market; Chinese governmental policies relating to private
educational services and providers of such services; health
epidemics and other outbreaks in China; and general economic
conditions in China. Further information regarding these and other
risks is included in our annual report on Form 20-F and other
documents filed with the Securities and Exchange Commission. The
Company does not undertake any obligation to update any
forward-looking statement, except as required under applicable law.
All information provided in this press release and in the
attachments is as of the date of this press release, and the
Company undertakes no duty to update such information, except as
required under applicable law.
For investor and media inquiries, please
contact:
Ascent Investor Relations LLC Tina Xiao +1 917-609-0333
tina.xiao@ascent-ir.com
METEN EDTECHX EDUCATION
GROUPCONSOLIDATED BALANCE
SHEETS(In thousands of RMB, except share data and
per share data)
|
As of December 31, |
|
As of March 31, |
|
2020 |
|
2021 |
|
RMB’000 |
|
RMB’000 |
|
US$’000 |
|
|
|
Unaudited |
|
Unaudited |
ASSETS |
|
|
|
|
|
Current
assets |
|
|
|
|
|
Cash and cash equivalents |
90,115 |
|
63,817 |
|
9,740 |
Contract assets |
6,194 |
|
5,938 |
|
906 |
Accounts receivable, net |
27,013 |
|
22,167 |
|
3,383 |
Other contract costs |
47,125 |
|
43,868 |
|
6,696 |
Prepayments and other current
assets |
50,658 |
|
38,298 |
|
5,845 |
Amounts due from related
parties |
7,934 |
|
9,934 |
|
1,516 |
Prepaid income tax |
14,460 |
|
14,423 |
|
2,201 |
|
|
|
|
|
|
Total current
assets |
243,499 |
|
198,445 |
|
30,287 |
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Restricted cash |
10,358 |
|
5,287 |
|
807 |
Other contract costs |
9,316 |
|
12,592 |
|
1,922 |
Equity method investments |
24,552 |
|
25,756 |
|
3,931 |
Property and equipment,
net |
146,891 |
|
135,863 |
|
20,737 |
Operating lease right-of-use
assets |
322,559 |
|
293,316 |
|
44,769 |
Intangible assets, net |
19,337 |
|
17,930 |
|
2,737 |
Deferred tax assets |
6,997 |
|
2,151 |
|
328 |
Goodwill |
274,567 |
|
274,567 |
|
41,907 |
Long-term prepayments and
other non-current assets |
40,754 |
|
39,468 |
|
6,026 |
|
|
|
|
|
|
Total non-current
assets |
855,331 |
|
806,930 |
|
123,164 |
|
|
|
|
|
|
Total
assets |
1,098,830 |
|
1,005,375 |
|
153,451 |
|
|
|
|
|
|
METEN EDTECHX EDUCATION GROUP
CONSOLIDATED BALANCE SHEETS (Continued)(In
thousands of RMB, except share data and per share
data)
|
As of December 31, |
|
As of March 31, |
|
2020 |
|
2021 |
|
RMB’000 |
|
RMB’000 |
|
US$’000 |
|
|
|
Unaudited |
|
Unaudited |
Current
liabilities |
|
|
|
|
|
Accounts payable |
17,013 |
|
6,105 |
|
932 |
Bank loans |
133,900 |
|
103,150 |
|
15,744 |
Deferred revenue |
341,934 |
|
340,029 |
|
51,899 |
Salary and welfare
payable |
67,609 |
|
68,373 |
|
10,436 |
Financial liabilities from
contracts with customers |
384,561 |
|
356,395 |
|
54,397 |
Accrued expenses and other
payables |
46,030 |
|
44,647 |
|
6,814 |
Income taxes payable |
267 |
|
245 |
|
37 |
Amounts due to related
parties |
131,151 |
|
81,505 |
|
12,440 |
Current operating lease
liabilities |
50,192 |
|
121,722 |
|
18,578 |
Total current
liabilities |
1,172,657 |
|
1,122,171 |
|
171,277 |
|
|
|
|
|
|
METEN EDTECHX EDUCATION GROUP
CONSOLIDATED BALANCE SHEETS (Continued)(In
thousands of RMB, except share data and per share
data)
|
As of December
31, |
|
As of March 31, |
|
2020 |
|
2021 |
|
RMB’000 |
|
RMB’000 |
|
US$’000 |
|
|
|
Unaudited |
|
Unaudited |
Non-current
liabilities |
|
|
|
|
|
Deferred revenue |
46,927 |
|
44,300 |
|
6,762 |
Deferred tax liabilities |
7,661 |
|
6,824 |
|
1,042 |
Operating lease
liabilities |
33,718 |
|
34,368 |
|
5,246 |
Non-current tax payable |
200,409 |
|
175,727 |
|
26,821 |
|
|
|
|
|
|
Total non-current
liabilities |
288,715 |
|
261,219 |
|
39,871 |
|
|
|
|
|
|
Total
liabilities |
1,461,372 |
|
1,383,390 |
|
211,148 |
|
|
|
|
|
|
METEN EDTECHX EDUCATION GROUP
CONSOLIDATED BALANCE SHEETS (Continued)(In
thousands of RMB, except share data and per share
data)
|
As of December 31, |
|
As of March 31, |
|
2020 |
|
2021 |
|
RMB’000 |
|
|
RMB’000 |
|
|
US$’000 |
|
|
|
|
|
Unaudited |
|
|
Unaudited |
|
Shareholders’
deficit |
|
|
|
|
|
|
|
Ordinary shares |
37 |
|
|
41 |
|
|
6 |
|
Subscriptions receivable |
(1 |
) |
|
(1 |
) |
|
- |
|
Additional paid-in
capital |
557,536 |
|
|
631,400 |
|
|
96,370 |
|
Accumulated deficit |
(936,247 |
) |
|
(1,023,023 |
) |
|
(156,144 |
) |
|
|
|
|
|
|
Total deficit
attributable to shareholders of the Company |
(378,675 |
) |
|
(391,583 |
) |
|
(59,768 |
) |
Non-controlling interests |
16,133 |
|
|
13,568 |
|
|
2,071 |
|
|
|
|
|
|
|
Total
deficit |
(362,542 |
) |
|
(378,015 |
) |
|
(57,697 |
) |
|
|
|
|
|
|
Commitments and
contingencies |
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
Total liabilities and shareholders' deficit |
1,098,830 |
|
|
1,005,375 |
|
|
153,451 |
|
|
|
|
|
|
|
|
|
|
METEN EDTECHX EDUCATION GROUP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME/(LOSS)(In thousands of RMB, except share
data and per share data)
|
|
|
|
|
|
|
2020Q1 |
|
2021Q1 |
|
RMB’000 |
|
|
RMB’000 |
|
|
US$’000 |
|
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
|
|
Revenues |
181,581 |
|
|
206,554 |
|
|
31,526 |
|
Cost of revenues |
(145,048 |
) |
|
(135,758 |
) |
|
(20,721 |
) |
Gross
profit |
36,533 |
|
|
70,796 |
|
|
10,805 |
|
Operating
expenses: |
|
|
|
|
|
Selling and marketing
expenses |
(68,604 |
) |
|
(70,398 |
) |
|
(10,745 |
) |
General and administrative
expenses |
(65,024 |
) |
|
(81,271 |
) |
|
(12,404 |
) |
Research and development
expenses |
(7,006 |
) |
|
(4,199 |
) |
|
(641 |
) |
Income/(loss) from
operations |
(104,101 |
) |
|
(85,072 |
) |
|
(12,985 |
) |
Other income
(expenses): |
|
|
|
|
|
Interest income |
133 |
|
|
110 |
|
|
17 |
|
Interest expenses |
(1,065 |
) |
|
(1,887 |
) |
|
(288 |
) |
Foreign currency exchange
gain/(loss), net |
(208 |
) |
|
(423 |
) |
|
(65 |
) |
Gains/(losses) on disposal and
closure of subsidiaries and branches |
- |
|
|
(2,056 |
) |
|
(314 |
) |
Government grants |
2,426 |
|
|
4,641 |
|
|
708 |
|
Equity in income/(loss) on
equity method investments |
(1,243 |
) |
|
1,204 |
|
|
184 |
|
Others, net |
(215 |
) |
|
(795 |
) |
|
(121 |
) |
Income/(loss) before
income tax |
(104,273 |
) |
|
(84,278 |
) |
|
(12,864 |
) |
Income tax expense |
2,550 |
|
|
(5,063 |
) |
|
(773 |
) |
Net
income/(loss) |
(101,723 |
) |
|
(89,341 |
) |
|
(13,637 |
) |
Less: Net loss attributable to
non-controlling interests |
1,411 |
|
|
(2,565 |
) |
|
(391 |
) |
Net income/(loss)
attributable to shareholders of the Company |
(103,134 |
) |
|
(86,776 |
) |
|
(13,246 |
) |
|
|
|
|
|
|
Net
income/(loss) |
(101,723 |
) |
|
(89,341 |
) |
|
(13,637 |
) |
Add: |
|
|
|
|
|
Share-based compensation
expenses |
1,613 |
|
|
33,764 |
|
|
5,153 |
|
Warrant financing |
- |
|
|
2,404 |
|
|
367 |
|
Adjusted net
(loss)/income |
(100,110 |
) |
|
(53,173 |
) |
|
(8,117 |
) |
|
|
|
|
|
|
|
|
|
BTC Digital (NASDAQ:METX)
Historical Stock Chart
From Mar 2024 to Apr 2024
BTC Digital (NASDAQ:METX)
Historical Stock Chart
From Apr 2023 to Apr 2024