After New Oriental and XRS announced the termination of K9 off campus training services, recently, four seasons education, a well-known educational institution in Shanghai, also announced that it would stop K9 training services before the end of the year.
stop K9 training service before the end of the year
According to the announcement issued by four seasons education, in order to fully comply with the opinions and related rules and regulations and measures, the company plans to stop providing discipline related guidance services (K9 discipline off campus training services) for students from kindergarten to grade nine in Chinese mainland before the end of 2021. The company expects that the suspension of the service will have a significant negative impact on the company's revenue for the fiscal year ended February 28, 2022 and beyond.
In the fiscal year ended February 28, 2021, four seasons education has 50 campuses, and most of the company's revenue comes from K9 discipline off campus training services.
Four seasons Education said that the company will continue to operate and develop non-k-9 discipline after-school training services, and further explore other opportunities to provide education services in accordance with relevant regulations.
In July this year, four seasons Education announced that it was evaluating the impact of relevant policies on the company's business and expected to have an adverse impact. However, the company will actively seek the guidance of government departments and make relevant adjustments according to the policies.
It is understood that after the introduction of the "double reduction" opinion, the four seasons education disclosed the transformation plan and put forward the development path of the "four carriages" including quality education, educational informatization, lifelong learning and research and learning practice education.
insufficient growth momentum
According to public information, four seasons education was founded in 2007. It started with Primary School Mathematical Olympiad, and then gradually developed into an educational institution that provides extracurricular training and guidance for young people aged 6 to 18. In 2016 and the six months ended June 30, 2017, the company was the largest after-school mathematics education service provider for primary school students in Shanghai (based on total tuition fees and number of students). In 2017, the company was successfully listed on the New York Stock Exchange.
Source: Official Website of four seasons Education
In terms of performance, according to the financial report of four seasons education in fiscal year 2021, the company's revenue during the reporting period was 280 million yuan, a year-on-year decrease of 27.96%; The net loss was about 27.89 million yuan, the gross profit was about 111.5 million yuan, and the net profit after deduction was negative 40.094 million yuan, compared with 26.351 million yuan in the same period last year, turning from profit to loss year-on-year.
According to the data chart, although the revenue of four seasons education has gradually increased since 2017, the growth rate does show a downward trend.
The sluggish growth has something to do with the conservative development of the company. Although the four seasons education originated in Shanghai, it has always been limited to Shanghai. The "Asia Pacific Cup", which once hosted one of the four Olympic Mathematics cups, has made it famous, but its expansion speed is obviously backward compared with educational institutions such as "XRS".
In this regard, Tian Peiqing, chairman of four seasons education, said in an interview with the media last year that four seasons education has encountered major industry rectification since it was listed. "In this period, our internal strategy is" stable ". Expansion needs to pay a price. If there are too many stalls, it is not easy to put them away. Education should not be too utilitarian, and ensuring teaching quality is the primary task."
Compared with New Oriental moving to Shenzhen Agricultural Products Group Co.Ltd(000061) live broadcasting and other different exhibition directions, the future focus of four seasons education still seems to be on education. According to its financial report announcement released in May, Zuo Yi, director and CEO of four seasons education, said that looking forward to the future, the company will continue to improve the core products and services of four seasons education in K12 extracurricular counseling market, so as to promote the sustainable development of business, At the same time, we will continue to explore new growth opportunities. "As an attempt to further expand the source of students, four seasons education has launched a new project of community chain self-study rooms to explore and seize new opportunities in the demand for lifelong education."
the share price fell below $1 and received a delisting warning
In July this year, four seasons education received a delisting warning from the New York Stock Exchange because the share price was lower than US $1 per share for 30 consecutive working days and did not meet the minimum bid of US $1 per share in the NASDAQ listing rules.
According to the trading rules of the New York Stock Exchange, if the average closing price of a listed company's share price for 30 consecutive trading days is lower than US $1 per share, the company will be deemed to be lower than the compliance standard. The company must restore its share price and average share price to more than $1 within 6 months after receiving the notice. Compliance can be restored only if the closing price is at least US $1 on the last trading day of any month during the six-month period and the average closing price is at least US $1 in the 30 trading days before the end of the last trading day of the month. Otherwise, the NYSE will start the suspension and delisting procedures.
It is understood that the share price of four seasons education has fallen below US $1 per share since mid May this year. After receiving the delisting warning of the New York Stock Exchange, it still hovers below US $1. The share price did not rise until the company issued the announcement of the stock repurchase plan on September 23, and finally exceeded US $1, but it fell below US $1 again since December.
As of the closing on December 27, four seasons education reported US $0.77 per share, with a total market value of US $35.62 million, a decrease of more than 90% compared with the high of US $10.23 per share at the initial stage of listing; Since this year, the share price has fallen by more than 28%, with an amplitude of 195.37%.
(China Fund News)
