BEIJING, March 5, 2021 /PRNewswire/ -- 51Talk (China
Online Education Group, NYSE: COE), China's leading online education platform and
the first online English education brand listed in the United States, announced its unaudited
financial results for the fourth quarter on March 5, 2021.
The company delivered solid results in the fourth quarter of
2020. 51Talk registered a non-GAAP net income of RMB38.6 million and its GAAP net income is
RMB31.8 million, amounting to the
company's fifth consecutive quarter of profitability. The company's
fourth quarter net revenues maintained strong growth momentum and
grew 34.7% year-over-year to reach RMB535.1
million.
However, the company's share price has a long history of staying
on the low side. During 2019, 51Talk's share price was even around
$6 per share. In early 2020, as U.S.
investors recognized the opportunity in China's high-growth English language training
market, the company's shares begun to pick up.
51Talk delivers solid financial results in the fourth quarter
of 2020
The company continued to maintain a high gross margin of more
than 70% and record high gross billings of RMB720.9 million. In terms of operating cash
flow, the company also recorded historically high operating cash
flow of RMB188.5 million, a
year-over-year increase of RMB167.1
million.
"Despite 2020 presenting an array of unforeseen challenges, our
strong pre-established foundational groundwork allowed us to not
only manage this tumultuous period but in fact benefit from the
shifting environment as we took advantage of new opportunities."
said Jack Jiajia Huang, founder, chairman and chief executive
officer of 51Talk.
Full year net revenues grew 38.9% to RMB2.1 billion. 2020 operating cash flow rose
80.8% to reach a historical high of RMB719.3
million, compared with RMB397.9
million in 2019, further strengthening the company's
financial position for future growth.
"I'm proud that we concluded a turbulent 2020 with solid
operating and financial results, evidenced by sustained revenue
growth and the first profitable year in our company history," said
Min Xu, Chief Financial Officer of
51Talk, as 51Talk recorded Non-GAAP net income of RMB173.7 million for 2020, compared to a net loss
of RMB87.7 million in 2019.
In a late 2020 interview with Capital Watch, Xu said that he saw
51Talk's stock as undervalued. He commented with confidence that as
the company grow, outperform its peers and competitors, get more
news and market research out there, 51Talk will get investors'
attention and the stock price will reflect its intrinsic value and
growth potential."
Strong growth of paying students on 51Talk platform during
Covid-19 pandemic
Besides financial success, the fourth quarter also witnessed
growth of paying students. In the fourth quarter, the number of
51Talk's paying students grew over 70.0% year-over-year driven by
its effective curriculum and sound service quality, while its
active students reached 353,800, up 37.6% compared with the same
period in 2019. The year of 2020 also witnessed remarkable growth
in new paying students which increased 60.0% year-over-year.
51Talk's strong market growth and rapid growth of paying
students was due to "the impressive strategic execution of 51Talk's
online K-12 English mass-market offerings", according to Huang.
Business success in the fourth quarter could not go without
51Talk's up-to-date curriculums, cutting-edge technologies, and
quality services.
51Talk was the first platform to build an online English
teaching network, and the first to set up a team of experts to
prepare English teaching materials for young Chinese users and
continue to subdivide the curriculum with the core of the
one-to-one model for young people.
51Talk has been focusing on the field of English education, and
has achieved good results with its courses and small classes for
younger kids. It underpins the importance of the learning
experience and performance in a bid that every student can get
quality English teaching resources.
51Talk's "Education for All" strategy and its high-quality
Filipino Teachers' One-On-One Model
have helped the leading platform achieve excellent results.
In 2020, the company made improving competency within itself a
top priority. Aware of its users' thirst for excellent English
teachers, 51Talk has introduced about 30,000 high-quality Filipino
foreign teachers over the past ten years and kept improving
operations in terms of product, technology, and service to enhance
human efficiency and ensure teaching quality through refined
management. Beside every Filipino teacher, a Chinese tutor was
there to follow the study process, monitoring the performance and
offering needed services when necessary.
In September 2020, the company
also ramped up a series of level K courses for children aged
between three and five, which are easy to learn, fun to play with,
and friendly to viewers, helping them make a good start on learning
the English language.
As a staunch technology advocate, 51Talk welcomes the
combination of AI technology and online English education. 51Talk
just finished the acquisition of GKid, a Shanghai-based online English education
platform, who offers innovative AI-driven online English courses
through highly interactive animation and picture books for children
from three to eight.
Huang believes that this acquisition both extends 51Talk's
addressable market and broadens its product and curriculum
portfolio. He foresees "potential collaboration and integration
opportunities" between 51Talk's platform and GKid's products and
industry-leading AI technologies.
User growth, market, brand promotion key to 2021's market
expansion
"As we head further into 2021, we are focusing on user growth
and enhanced brand promotions to drive market share expansion."
Huang said.
To achieve this goal, 51Talk will continue to optimize its
learning experiences through upgraded product offerings and an
enriched curriculum mix to better attract and retain users, develop
innovative AI-powered robotic tutors to help students review core
knowledge points with the aim of enhancing overall learning
efficiency, and integrate more interactive features into its
textbooks to make its courses more interesting and engaging to
young children, according to Huang.
The company is also diversifying its curriculum portfolio to
provide a holistic learning experience, through investing in
R&D, upgrading services to students, and expanding its teacher
operations.
51Talk targets to further increase its branding and marketing
efforts to heighten brand awareness as it seeks for future growth.
In 2021, experience stores will continue to be a major part of its
online merge offline strategy to boost market penetration in
non-tier-one cities. There are more than 100 experience stores in
20 provinces in China till the end
of 2020.
Xu added that in 2021, investment will be channeled towards the
development of its curriculum, technology and brand as 51Talk looks
to capitalize on market dynamics, drive user growth and achieve the
leading market position.
Education has been one of China's fast-growing industries, boosted by
the rising household income, parents' willingness to spend on their
children's studies, government incentives, and the end to the
one-child policy. By providing students across China with access to quality English
education, 51Talk is standing out to achieve its mission of helping
China speak with the world.
51Talk firmly believes that English education should not be a
luxury, and that education for all is its goal. 51Talk will strive
to provide quality English education to more families in 2021.
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SOURCE 51Talk