Editor’s Note: This article is from the WeChat public account “Different Finance” (ID: DifferentFin), the author dazzle night snow, 36 is authorized to release.After the release of the financial report of New Oriental and Good Future, the focus on K12 online education (NYSE: GSX) also released the unaudited financial performance report for the third quarter ended September 30, 2019 on November 5.From the data of revenue, net profit and the growth of paying users, the performance is quite impressive.In the third quarter, net revenue increased by 461.5% year-on-year, and net profit increased by 171.4% year-on-year.The total number of paying people reached 820,000, a year-on-year increase of 240.2%.Behind the beautiful financial data, we also need to pay attention to the increase in total revenue, and the operating costs and sales costs of the students are also increasing, especially the sales growth expenses are more than twice the growth rate of revenue.More, this also exposes the crisis behind the growth of students’ growth, the increase in customer costs, the high cost of teachers, and the intensified competition in the industry. The various regulatory policies in the education industry may have an impact on the performance of those who learn.Who to learn net income increased by 462% over the same period. Far more than New Oriental, good future New Oriental (NYSE: EDU) released the first quarter of the 2020 fiscal year unaudited financial performance report data, in the first quarter, New Oriental net income was 1.072 billion US dollarsThe year-on-year growth was 24.6%. The increase in net income was mainly due to the increase in the number of students in the K12 tutoring program.Good Future (NYSE: TAL) The latest unaudited financial results report for the second quarter of 2020 fiscal year shows that the net future income of the second quarter was $936.6 million, a year-on-year increase of 33.8%.According to the financial report, as of the third quarter of September 30, 2019, the net income of the students was 557 million yuan, a year-on-year increase of 461.5%.Mainly due to the increase in the number of paying students in the K12 regular price class and the increase in tuition fees charged to K12 students.(Source: Financial News) From the performance of the three companies, who learns to fall behind the New Oriental, good future two education giants in terms of net income.However, in terms of the year-on-year growth rate of net income, whoever learns to grow faster than the two education giants.Although the business models of the three companies are different, the income growth is also driven by K12 online education.The financial report shows that the net profit of the third quarter of 2019 increased from 680,000 yuan in the same period of last year to 1.9 million yuan, a growth rate of 178%; non-GAAP net profit increased from 1.05 million yuan in the same period last year.To 2014 yuan, the company achieved profit for six consecutive quarters.It should be noted that the net profit of the third quarter compared with the previous quarter was 16.37 million yuan, down 88%.(Source: Financial Report) Chen Xiangdong, who is the founder, chairman and CEO, said: “Our third-quarter net operating cash flow reached 287.8 million. Our fast, efficient and effective way allows us to achieve far more than the market level.Competitive advantage. We focus on achieving a steeply growing learning curve. We continue to invest in teaching content and technology research and development. We are fully committed to improving operational efficiency and are able to continue to implement strong executions in a continuous and rapid manner.Shen Nan, who is the chief financial officer of the school, added: “In the third quarter, the company’s net income increased by 461.5% year-on-year to 557 million yuan, which greatly exceeded the market expectation. The company’s core business, K12 online big class education grew faster, year on year.Increased by 525.5%. Cash receipts increased by 419.5% year-on-year to 880 million yuan. This indicator can usually predict the income trend in the next quarter. Education supervision policy tightens the scarcity of teachers’ resources and increases operating costs in the past few years, ChinaThe K-12 tutoring market has experienced significant growth. In China, high-quality schools and universities are admitted to K-12The guide created a huge demand. As online courses provide students with access to the top teaching talents in the country, online K-12 tutoring is becoming more and more popular among Chinese K-12 students and their parents. However, the education and training industry is false.Issues such as advertisements, exaggeration of masters, super-teaching, and chaos in school-running schools have been criticized by all sectors of society, causing concern of relevant education departments, and the introduction of relevant regulatory policies, and the intensity is constantly increasing.In 2018, in accordance with the “Notice on Effectively Doing Specialized Governance and Reform of Off-Campus Training Institutions” issued by the General Office of the Ministry of Education, training-type teachers should have corresponding qualifications. If they fail to obtain teacher qualifications, they will not be allowed to continue to engage in disciplines.Class training work.On July 15 this year, the Ministry of Education and the Central Network Information Office, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration of Radio, Film and Television, and the National “Anti-vice and Non-Violation” Office jointly issued the “Implementation Opinions on Standardizing Off-Changing Online Training” (below)Referred to as “Opinions”, this is the first normative document issued at the national level specifically for off-campus online training activities.The “Opinions” put forward rectification rules for the teaching content of the public concern, agency fees, teacher qualifications, business norms, information security and other issues.At the same time, the “Opinions” require online training institutions to regulate teachers.Among them, subject tutors must have teacher qualifications and are not in-service teachers in primary and secondary schools.The policy requirements for teachers’ qualifications have made the original qualified teachers eligible to become more sought-after, and the competition between qualified training resources for educational and training institutions will become more intense.Institutions that want to attract qualified teachers or retain existing qualified teachers need to improve teacher compensation and benefits, which will exert pressure and adverse impact on the business, management and operating costs of educational institutions.The financial report shows that the operating cost of the third quarter is 156.7 million yuan, an increase of 316.8% compared with 37.56 million yuan in the same period last year.With whom to learn, the increase in costs is mainly due to the increase in the salary of the lecturers and tutors.In addition, the “Opinions” have been standardized in the scope of business.Strictly implement the state’s regulations on financial and asset management, and publicize the charging items, standards and refund methods in a prominent position on the training platform.The charging period and teaching arrangements should be coordinated. The total amount of prepaid funds collected should be matched with the service capacity. It is strictly forbidden to collect prepaid funds beyond the service capacity. The prepaid funds can only be used for education and training business, and should not be used for other investments to ensure the safety of funds.According to the hourly fees, each subject may not charge more than 60 class hours at a time; if charged according to the training period, the time span of more than 3 months may not be charged at one time.This provision will have a certain impact on who will learn the deferred income.As of September 30, 2019, the deferred income balance with whom it was learned was 778.3 million yuan, an increase of 186.1% from 272 million yuan on December 31, 2018.Deferred income mainly includes tuition fees for the fall semester.At the same time, the operating expenses for those who are studying are also growing wildly, and their year-on-year growth rate even exceeds the growth rate of revenue.The live broadcast of the third quarter operating expenses was 411.1 million yuan, an increase of 567.4% over the same period last year of 61.61 million yuan.The year-on-year increase in operating expenses was higher than the increase of 461.5% in revenue.Compared with the previous quarter’s 236.3 million yuan, it increased by 74%.(Source: Financial Report) Among them, the third quarter sales expenses increased from 31.02 million yuan to 330.4 million yuan, a year-on-year increase of 965%, an increase of 74% over the previous quarter.This growth is mainly due to the increased marketing costs for expanding user size and brand awareness, as well as the increase in sales and marketing staff salaries.(Source: Financial Report) Who studied the third quarter R&D expenses was 57.13 million yuan, an increase of 185.5% from 2001 million yuan in the same period of last year, mainly due to the increase in the number of professional course developers, teaching content developers and technology research and development personnel.The salary level has increased.Chen Xiangdong said, “In 2019, we will continue to invest strategically in customer marketing and technology and content development, and promote more in-depth emotional interaction with students and parents. We will continue to steadfastly focus on online live broadcast.The big class model is to get a better financial return.” Whoever learns as the first online education and the only profitable K12 online education company has attracted much attention.The penetration of veteran educational institutions, the access of Internet giants such as NetEase, has made the K12 online track more and more commissioned and the competition is more intense.New Oriental, a good future as an old-fashioned education and training institution, brand awareness is far higher than who to learn, NetEase has a backed by NetEase, has certain advantages in traffic, technology and capital.In the case of the disappearance of the traffic dividend, the weak brand advantage, and the high cost of online education, the pressure on marketing expenses will continue to rise..
Who to learn the third quarter revenue increased by more than 4 times, sales expenses increased by 9 times