China Chuanglian Education Financial recorded a turnaround in profit; its revenue increased significantly by 93.9% in 2018 1H

Financial Highlights

 

6 months ended 30 June

RMB’000

2017

2016

Change

Revenue

85,255

43,958

+93.9%

Gross profit

52,742

27,780

+89.9%

Profit (loss) before tax

13,158

(18,683)

Adjusted profit (loss) before tax*

14,693

(16,405)

Profit (loss) attributable to owners of the Company

7,500

(11,179)

Adjusted profit (loss) attributable to owners of the Company*

9,035

(8,901)

Basic earnings (loss) per share (RMB cents)

0.15

(0.24)

Adjusted basic earnings (loss) per share (RMB cents)*

0.18

(0.19)

 

*Adjusted financial information refers to activities for the period excluding share-based payments


HONG KONG, CHINA – Media OutReach – 24 August 2018 –  China Chuanglian Education Financial Group Limited (HKEx stock code: 2371.HK, the “Group”) announced its interim results and financial position. For the six months ended 30 June 2018, the Group recorded a revenue of approximately RMB 85.3 million (corresponding period in 2017: approximately RMB44.0 million), representing a significant increase of 93.9% as compared to the last corresponding period. During the Reporting Period, the Group recorded a turnaround to profit attributable to owners of the Company of approximately RMB7.5 million, (corresponding period in 2017: loss attributable to owners of the Company of approximately RMB11.2 million).

 

The basic earnings per share for the Reporting Period was approximately 0.15 RMB cent (corresponding period in 2017: basic loss per share of approximately 0.24 RMB cent).

 

Business Review

 

Educational consultancy, online training and education business

 

Being one of the very few pioneers of online education providers in the PRC, we mainly provide vocational training in relation to job adaption and skill enhancement to civil servants and professional technical personnel, such as lawyers, accountants, doctors, teachers, etc., in the PRC. The current population of civil servants and professional technical personnel in the PRC is over 84 million. There are certain requirements under the PRC laws and relevant provisions that, civil servants and professional technical personnel in the PRC are required to undertake an annual required minimum continuing professional training in both public required subjects and relevant professional subjects in order to satisfy their corresponding job requirements and professional development needs.

 

The Group is currently providing online training and education services to its users through internet and telecommunication networks. The Group is operating over 120 online training and education platforms and a mobile terminal learning platform, Rongxue App (融學App). Currently, we have over 5 million of paid users. Over the past few years, our online training platforms had provided training to an accumulated person-times of over 25 million. Since its launch of Rongxue App in 2016, its registered users has increased quickly to over 2.3 million in the current year.

 

During the Reporting Period, we continued to expand our online training and education business to more geographical areas in the PRC. Our online training and education business currently covers 17 provinces, autonomous regions and municipalities as well as 40 cities in the PRC.

 

For the six months ended 30 June 2018, approximately RMB77.8 million (corresponding period in 2017: approximately 44.0 million) was generated from educational consultancy, online training and education business, representing an increase of approximately 77.0%. It continued to be the major contributor of revenue to the Group which accounted for 91.3% of the total revenue.

 

Financial business

 

Leveraging on the accurate big data accumulated from the online training, the Group has taken certain steps to expand into the financial business. The Group is one of the promotors of Xinmei Mutual Life Insurance Agency (“Xinmei Mutual”) (信美人壽相互保險社), the first mutual life insurance agency in the PRC. Xinmei has already commenced its business and launched its formal insurance products in 2017.

 

In addition, the Group has acquired Beijing Zhongjin Insurance Brokerage Limited (“Beijing Zhongjin”) (北京中金保險經紀有限公司) and Well Tunes Financial Group Limited in 2017 in order to enter into the insurance brokerage insurance. The insurance brokerage business achieved significant progress recording a revenue of approximately RMB7.4 million for the Reporting Period.

 

Future Plans

 

Over the past few years, our online training and education business has gradually increased its geographical coverage in the PRC. In the coming years, we will continue to expand our geographical coverage to new business areas and promote the online training and education penetration rate in the existing business areas.

 

In 2017, the PRC government has introduced a new standard named “National Occupational Qualification” (國家職業資格) of professional technical personnel (專業技術人員) and skilled personnel (技能人員) which covers 139 different occupations. This would largely increase the population of professional technical personnel and skilled personnel who would need vocational training for annual renewal of their qualification. We believe that it represents a huge business opportunity to our online training and education business.

 

In addition to the area of continuing education, we will target to diversify our business into the pre-qualification training and education business in light of the more stringent requirements for admission to the respective qualification as professional technical personnel and skilled personnel.

 

Apart from the domestic training and education, we aim to have more diversification of business by introducing certain international components to the training and education in the PRC. We are targeting to introduce certain high quality international curriculum into the PRC in order to promote the globalization and recognition of the education system in the PRC.

 

In addition to the business-to-business model the Group has adopted over the past few years, the Group intends to allot more resources in developing the business-to-consumer model in the foreseeable future in order to increase the consumer’s adherence and loyalty to our training and education platforms.

 

Furthermore, the Group plans to launch its online to offline model whenever it is desirable so that our customers can enjoy the convenience of selecting and paying for the suitable training courses online as well as enjoying the better post-sales servicing and interaction with our local offices and staff.

 

Leveraging on the solid foundation of our training and education business, we commenced to build up our financial business by entering into the insurance related business in the previous year. In the coming future, we are planning to establish local offices of our insurance brokerage business in major cities in the PRC in order to capture the nationwide demand for insurance products and provide high quality post-sales services to the customers. Apart from insurance related business, we are planning for the possible development of securities trading and asset management business to further satisfy the potential financial needs of our customers. We believe the potentials of financial business is huge, and it can become another growth driver of the Group in the foreseeable future.

 

About China Chuanglian Education Financial Group Limited

 

China Chuanglian Education Financial (2371.HK) is principally engaged in the provision of the online training and education services in the PRC. It focuses on vocational education and continuing education, and provides massive online and offline training services to civil servants and professional technical personnel. Its online training platforms had provided training to an accumulated person-times of over 25 million and registered users of Rongxue App has increased to over 2.3 million.

 

Meanwhile, leveraging on the accurate big data accumulated from the online training, the Group has taken certain steps to expand into the financial business. In 2016, the Group has become one of the nine promotors of Xinmei Mutual Life Insurance Agency. The Group has also acquired insurance brokerage companies in the PRC and Hong Kong.