Under the background of repeated epidemics and strong supervision, the performance of educational institutions in 2021 is bound to be very struggling. Entering the disclosure cycle of performance forecast, performance decline has become a common phenomenon. The general trend is inevitable, but reflected in individuals, different institutions also have different performances.
On January 14, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) released the performance forecast for 2021. It is expected that the net profit attributable to the shareholders of the listed company will suffer a loss in the whole year, with a revenue of RMB 2.48-2.58 billion, a year-on-year increase of 2.1-6.2%, showing strong business toughness.
As a representative education concept stock of a share, what impact will the steady performance of Xueda (Xiamen) Education Technology Group Co.Ltd(000526) under the general environment have on its future development?
losses are inevitable, showing resilience
On the whole, this performance forecast of Xueda (Xiamen) Education Technology Group Co.Ltd(000526) shows good toughness.
In 2021, the university is expected to achieve a revenue of RMB 2.48-2.58 billion, a year-on-year increase of 2.1-6.2%; The revenue after deducting non recurring profits and losses was RMB 2.47-2.57 billion, with a year-on-year increase of 1.9-6.1%. At the moment of general decline in performance, it can grow against the trend, showing the steady development trend of XueDa.
In the fourth quarter, even the most affected quarter, the decline was only about 20%. According to the announcement previously released by Xueda (Xiamen) Education Technology Group Co.Ltd(000526) , the revenue of compulsory education accounts for about 40% of the revenue of education and training business. The reduction of this part of the business did not reduce its overall business by more than 40%. This means that the business diversification of Xueda (Xiamen) Education Technology Group Co.Ltd(000526) has made relatively positive progress.
In terms of profits, in the general environment, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) inevitably suffered losses. The net profit attributable to the shareholders of the listed company ranged from – 590 million yuan to – 480 million yuan, from profit to loss year-on-year. As for the reasons for the loss, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) said in the announcement that affected by the “double reduction policy”, based on the current operating conditions and the analysis and prediction of future operating conditions, and in accordance with the relevant provisions of enterprise regulatory risk tips No. 8 – goodwill impairment, accounting standards for business enterprises and the company’s accounting policies, and in accordance with the principle of prudence, The company preliminarily judged that the provision for goodwill impairment in the reporting period was 450 million yuan (the actual amount should be determined after evaluation and audit by the evaluation institution and audit institution), which reduced the performance in the reporting period.
If the impact of goodwill impairment is excluded, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) the actual annual loss is only 30 million yuan to 140 million yuan. In fact, even the largest loss including goodwill impairment of RMB 590 million is still low in the whole industry.
Referring to some listed companies that have disclosed their performance, park Xin education, a US listed company, had an operating loss of 1.362 billion yuan in the second quarter alone; The operation loss of head education in the second quarter also reached 790 million yuan, and boshile lost 478 million yuan in a single quarter in the fourth quarter; Elite education is in business difficulties; Yu Minhong, the helmsman of New Oriental, said that after the double reduction, the operating revenue of New Oriental decreased by 80%; Tal has more than 20000 employees leaving at the end of 2021 alone
In contrast, the overall loss of Xueda (Xiamen) Education Technology Group Co.Ltd(000526) is in a low range, and the operating performance can be said to have exceeded the market expectation.
diversified layout and rapid transformation
It is also a big industry impact. Why is XueDa relatively less affected and its operation relatively stable?
Blue whale education combed Xueda (Xiamen) Education Technology Group Co.Ltd(000526) financial reports over the years and found that this is largely related to the diversified layout of XueDa. The business types of XueDa are relatively rich, with the characteristics of multiple forms, multiple scenarios and multiple products. The business covers all disciplines and categories in K12 stage, and the teaching mode also covers various forms such as “one-to-one counseling”, “personalized group counseling”, full-time cultural course counseling, online school and so on.
According to the previous announcement of Xueda (Xiamen) Education Technology Group Co.Ltd(000526) , its high school revenue accounts for about 60% of the education and training business income, and the compulsory education revenue accounts for about 40% of the education and training business income. According to the announcement of Xueda (Xiamen) Education Technology Group Co.Ltd(000526) in November this year, from the beginning of 2021 to the end of October, the company’s online discipline education and training business revenue in the stage of compulsory education accounts for about 5.6% of the company’s education and training business revenue. Therefore, under supervision, decentralized business can disperse risks. This allows the university to avoid systemic risks and ensure the smooth operation of the business.
Moreover, blue whale education also found that after the policy was issued, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) acted frequently, reflecting a strong adaptability. From the perspective of combing, XueDa is almost a strategic cooperation every month.
According to blue whale education, in September, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) signed a joint venture agreement with Wuling technology, and both parties will jointly invest to establish a joint venture as a business operation and comprehensive management platform in the field of Picture Book Museum.
In October, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) and Dane Education announced the formation of a long-term in-depth business strategic partnership. The two sides will carry out in-depth cooperation in non disciplinary business, including adult vocational education, youth programming and intelligent Siasun Robot&Automation Co.Ltd(300024) education, as well as relevant scientific and technological innovation events, study tour camps, etc.
In November, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) signed a strategic cooperation agreement with grape wisdom. The two sides established a strategic cooperation relationship. They will cooperate in the fields of artificial intelligence and wisdom education, explore the future education model and jointly create a service and content ecology.
After the rapid layout, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) has expanded the track of quality education, adult education, vocational education, wisdom education and so on. When the strategy can be implemented, the operation will have a better grasp, so that the company can quickly supplement the business gap, better deal with risks, and finally bring the stability of performance.
bad out, the future can be expected
For the whole education industry, it is self-evident that institutions have sufficient ability to resist short-term shocks at present, which is of great significance for future development.
At present, with the gradual implementation of the “double reduction” policy, the bad situation in the education industry may be exhausted. First of all, the “double reduction” policy is strong and has a great impact in a short time. However, from the perspective of a longer period of time, it is not expected that more vigorous policy documents will appear. Educational institutions will usher in a stable regulatory cycle.
Secondly, great progress has been made in the rectification of the education industry, and most institutions have completed the liquidation. In this context, there is limited room for institutional performance decline, and the industry is about to hit the bottom. According to the latest data disclosed by the Ministry of education, significant progress has been made in the governance of out of school training institutions. Offline off campus training institutions have been reduced by 83.8%, and online off campus training institutions have been reduced by 84.1%. The reduction of more than 80% means that there will not be much room for further contraction of institutional performance.
In 2022, after the institution is cleared, the “remnant is the king”. After the market reshuffle, Xueda (Xiamen) Education Technology Group Co.Ltd(000526) such institutions with smooth transition are also expected to usher in better development opportunities in 2022.
Looking back on 2021, it is a year of drastic changes for the education industry, and the education industry has ushered in changes. In this context, the university can firmly adhere to the strategy, effectively promote the transformation and landing, and finally become one of the less affected institutions. From the perspective of the industry, bad news is expected to usher in good news. The future development of institutions such as XueDa may be worth looking forward to.
