In the past 18 years, New Oriental has released its first loss report!
On the 22nd, New Oriental announced its first financial report for the first half of fiscal year 2021-2022, with a net loss of more than US $900 million (about RMB 5.7 billion), which is the first performance loss report of New Oriental since its listing in 2004.
Affected by this news, New Oriental once fell by nearly 10% before trading, but then rose. As of press time, the decline of New Oriental narrowed to 1.64%.
6 months loss of 5.7 billion yuan
According to the financial report of New Oriental, the financial data for the six months ended November 30, 2021 showed that the revenue of New Oriental in the first half of the year was US $1.967 billion, compared with us $1.874 billion in the same period of last year.
Although the revenue increased, the operating loss of New Oriental in the six months was US $736 million, and the operating profit in the same period of last year was US $118 million; The net loss was US $907 million and the net profit in the same period last year was US $179 million.
In January 2022, Yu Minhong, the founder of New Oriental, once revealed that in 2021, the market value of New Oriental fell by 90%, the operating revenue decreased by 80%, 60000 employees were dismissed, and the cash expenses such as tuition, employee dismissal n + 1 and teaching point rent were nearly 20 billion.
According to the financial report, as of November 30, 2021, New Oriental held cash and cash equivalents and restricted cash of US $1.05 billion. In the same period of last year, New Oriental held cash and cash equivalents and restricted cash of US $2.648 billion, a decrease of nearly US $1.6 billion (equivalent to RMB 10 billion).
In addition, the financial report shows that as of November 30, 2021, the operating costs and administrative expenses of New Oriental in the first half of the year were US $2.7 billion, compared with us $1.755 billion in the same period of last year; Among them, the general and administrative expenses of New Oriental in the first half of the year reached US $1.292 billion, compared with us $587 million in the same period of last year.
It is understood that “general and administrative expenses” refer to office rent, utilities and equipment depreciation. From this point of view, the loss of New Oriental in the first half of fiscal year 2022 is mainly caused by cash expenses such as tuition fee dismissal, employee dismissal n + 1, teaching point rent cancellation and so on.
may lose in the second half of the fiscal year
at least 30% of revenue
In terms of performance, New Oriental said that all learning centers across the country have stopped providing discipline related training services to kindergarten to ninth grade students. The termination of the service has a significant adverse impact on the company’s total revenue for the six months ended November 30, 2021.
But this also means that in the second half of fiscal year 2022, New Oriental will lose more than 30% of its revenue.
According to fiscal year 2020 and fiscal year 2021, the K12 business revenue of New Oriental online was RMB 295 million and RMB 787 million respectively, and the total revenue of all divisions of the company in the same period was RMB 1081 million and RMB 1419 million respectively. The company said that in the past two fiscal years, K9 business accounted for about 58% – 73% of K12 division. Based on this calculation, K9 business revenue accounted for about 32% – 41% of the total revenue of New Oriental online in fiscal year 2021.
New Oriental said that at present, the company has turned and will continue to turn its key resources to educational products and services unrelated to K9 discipline training services, such as exam preparation courses, adult language training courses and teaching materials, and will explore other business opportunities by using the business experience, brand awareness and educational resources accumulated in the past.
According to the New Oriental website, at present, the main business of New Oriental is divided into three parts: University Examination (including CET-4 and CET-6, postgraduate entrance examination), international education and English learning.
In addition, New Oriental also provides international study tours, family education centers, books and other new services.
At present, these new businesses have not been reflected in the financial report. However, the transformation of New Oriental is not as smooth as expected.
Among them, New Oriental online, with Hong Kong listed companies as the main body, established the Oriental selection live selling system, transformed into an e-commerce platform with Shenzhen Agricultural Products Group Co.Ltd(000061) screening and sales as the core, provided product value-added services for farmers across the country, and became a trusted platform linking farmers and consumers. According to Red Star News, Xinshuo data platform shows that since its launch on December 28, Dongfang has selected 335 goods with a total sales of 4.5476 million yuan and 81400 pieces. Among them, on the day with the highest single day sales, Dongfang selected and sold 11000 goods.
According to the interim performance disclosure announcement of Hong Kong stock New Oriental online on January 21, in the six months ended November 30,
New Oriental online realized an operating revenue of 574 million yuan, a year-on-year decrease of 15.3%; The loss during the period was 544 million yuan, a year-on-year decrease of 19.3%; The loss per share was 0.54 yuan, a year-on-year decrease of 25.0%.
This means that after closing the K9 business, the loss of New Oriental online will continue to expand in 2022.
Yu Minhong: don’t admit defeat, don’t buy, seize the day
Yu Minhong said in his official account on the 22nd that during the week from February 14 to 20, it was sunny almost every day. Only on Thursday, it was cloudy. I thought it would snow again, but it was sunny the next day. Although it is sunny, the temperature is not high every day. Most of them are below zero. In a week, the snow fell last weekend has not melted. Especially in places where the sun can’t shine, the spotty snow looks full of holes. It seems to be a torn good memory, which can’t bear to look back.
Turning to the recent hot topic – the Winter Olympics, Yu Minhong said that we don’t have to worry about the growth of the younger generation. Their growth path has gone beyond our traditional ideas. The spirit embodied in them has a kind of fearless natural and unrestrained flash. This is precisely what our generation of people who bear the burden of tradition do not have.
Speaking of recent work, Yu Minhong said that eight business working meetings were held this week to clean up ideas and design future development paths for different business lines. After the initial rush, new businesses and transformation businesses began to advance step by step, and some have achieved initial results. New Oriental people have the courage not to admit defeat and buy, and the spirit of seizing the day. With them, I believe that New Oriental can develop continuously.
