After the first financial report after listing, the reading Lang turned around

Picture source: Oriental IC

A few days ago, Reading Lang Education released the first financial report after listing.

What is worrying is that in the first half of the year, Reading Lang's revenue profit decreased, and the sales volume of various product lines decreased; the cost increase and the cost remained high ...

Reading Lang, who had just "ashore", began to go downhill?

Revenue profit drops, sales expenses increase

In the previously disclosed prospectus, Reading Lang's 2019-2021 revenue was 670 million yuan, 734 million yuan, and 813 million yuan, respectively, all in the trend of year-on-year growth.

However, in the first financial report after listing, this growth trend has not continued.

In the first half of 2022, Reading Lang revenue was 260 million yuan, a decrease of 26.9%compared with the 355 million yuan in the same period last year.

The profits also declined significantly. In the first half of the year, the loss of 42.388 million yuan during the Reading Lang period was from profit to losses year -on -year; the net profit adjusted during the period was 17.516 million yuan, a year -on -year decrease of 57.86%.

During the reporting period, the revenue profit dropped significantly, and the Reading Lang gave an explanation -the decline in sales output ratio. Reading Lang said in the financial report that due to the continuous epidemic and stricter of epidemic prevention measures, the influence on production plans and offline dealers 'business has led to a decline in the sales of students' personal tablets and wearable products.

However, in terms of business, it is not only personal tablets and wearable product business lines that have shrunk sales.

In the first half of the year, the sales revenue of the student's personal tablet was 231 million yuan, a decrease of 23.1%year -on -year; the sales revenue of wearable products was 13.133 million yuan, a decrease of 61.5%year -on -year. Reading Lang said that the decline in sales revenue of the above two product lines is mainly because the supply chain and dealer business of the epidemic situation have been affected, resulting in a decrease in the sales of students' personal tablets.

Before listing, as a transformation breakthrough, the wisdom class solution business, which was highly hoped by reading, also declined. In the first half of the year, the sales revenue of smart classroom solutions decreased by 36.7%year -on -year to 5.131 million yuan. It is mainly due to the repeated epidemic and the promotion of smart classroom solutions, which has been postponed or canceled, resulting in a decrease in sales of the above products during the period.

Even advertising and content authorization business income decreased by 49.62%to 2.951 million yuan from 5.858 million yuan in the same period last year. It can be said that four of the five main businesses have encountered obstacles.

In all product lines, only other product business represented by intelligent dots achieve income growth during the period, with a total income of 8.055 million yuan, an increase of 7.4%year -on -year. But the contribution of this business line is very small and cannot reverse downward performance.

It is puzzling that although the sales revenue of each line has declined, the sales and distribution expenses during the reporting period of Reading Lang still increased. During the reporting period, the sales and distribution expenses of Reading Lang were about 40.3 million yuan, an increase of 29.4%year -on -year.

Reading Lang said that the increase in the above expenses during the reporting period is mainly due to the increase in advertising and sales efforts to comply with some strategies to launch new products and expand marketing channels (such as social media).

However, expanding sales channels did not bring about the growth of sales revenue, but it dragged down its performance. In the financial report, Reading Lang admits that the decrease in profit during the period is mainly due to the decrease in revenue of about 95.4 million yuan, sales and distribution expenses increased by about 9.1 million yuan, and the fair value change from financial liabilities based on the fair value confirmed that the loss was about 47.8 million yuan Yuan.

"Old Antique" Reading Lang is trapped offline

Theoretically speaking, after the "double reduction" landing, the study scene returns to the school and the family environment more, and the market demand of the "learning machine" has increased. However, the sales revenue of "Reading Lang" has declined as a whole. What is the symptom?

Some analysts point out that the problem faced by Reading Lang is "the sales model is out of date."

In the financial report, Reading Lang stated that it mainly depends on third -party offline dealers to sell products, and also uses online channels, including self -operated online stores and a few online dealers, including mainstream e -commerce platforms.

According to the financial report, offline dealers sold a total of 207 million yuan in the first half of the year, accounting for 79.6%of the total revenue. In the same period of 2021, offline dealers sold a total of 297 million yuan, accounting for a higher proportion of total revenue, reaching 83.7, reaching 83.7 %.

In terms of online sales, online dealers sold a total of 22.649 million yuan, accounting for 8.7%of the total revenue; sales were 27.503 million yuan through self -operated network platforms, accounting for 10.6%of the total revenue.

Too much dependence on offline sales, in the epidemic, Reading Lang not only did not get "dividends" due to the increase in online education, but was blocked.

At the same time as online sales contributions, they also brought endless complaints. According to the Black Cat Complaint Platform, some consumers complained that the reading Lang Tablet "does not ship" and "price reduction and refund" that they purchased on the e -commerce platform.

In addition, many consumers complained that they were not satisfied with the after -sales service of Reading Lang products. On the black cat complaint platform, many consumers said that "refusing warranty during the warranty period", "the product screen is damaged, and the customer service cannot be contacted" "The learning machine can not buy problems for half a year, and there is a problem after the maintenance."

In addition to the after -sales issue of the sales side, as an educational product provider, the content carried by the read Lang product also attracted attention and controversy.

Reading Lang said in the financial report that their personal tablets are equipped with digital education auxiliary resources for primary and secondary school students aged 6-18, mainly to synchronize preview, review and learning materials as a supplement to compulsory education classroom teaching. At the same time, it also provides intelligent dots read pens, and with online content, you can identify and read Chinese or English vocabulary and sentences; intelligent scanning strokes can translate Chinese and English sentences selected in a timely manner. However, there are also questions that these contents may also be "extracurricular training". Earlier, Reading Lang did expand the training courses of off -campus disciplines. It is reported that in 2017, Reading Lang set up an Education Research Institute to enter the two -teacher live broadcast class and teaching integrated system solution smart classroom. Since then, Reading Lang has provided off -campus counseling courses for K12 core disciplines, while creating and selling various intelligent learning equipment and smart classroom solutions, and gradually forms a business model of online and offline integration.

Until the "double reduction" landing, Reading Lang terminated any live broadcast courses from August 2021. In order to continue to meet the relevant learning needs, the company produces recorded video resources, and provides additional free online and auxiliary resources on intelligent learning devices.

In fact, as a "learning hardware service provider", it is understandable to carry the learning materials internally. However, it is worth noting that the R & D expenses of Reading Lang in the first half of 2022 declined significantly. Reading Lang said in the financial report that due to the decrease in the number of R & D personnel and the corresponding decrease in wages, its R & D expenditure decreased from 18.7%in the same period last year to 13.7%to 16.2 million yuan.

After -sales complaints have continued, and R & D personnel have decreased. In the present stage where the competition between hardware providers such as tablets and learning machines is becoming more and more intense.

Where will the future development go? Reading Lang took the way out of 5G. In the financial report, Reading Lang said that in the second half of 2022, the company is developing equipment with 5G technology to welcome the arrival of the 5G era, and it will support faster transmission speed and delay. In addition, the company plans to promote the flat distribution model, continuously expand the coverage of network regional coverage and deepen the penetration of more low -tier cities, thereby accelerating the reorganization of the distribution network structure. The company will also make every effort to actively promote the use of the company's smart classroom solutions nationwide.

Expanding the new line is bound to be inseparable from investment. However, until the end of the reporting period, the proportion of Yulang's balance of asset -liability increased from 68.1%in the same period in the same period in 2019 to 70.9%. At the same time, the cash in his hand was also decreasing. As of June 30, 2022, the cash and cash equivalents in the hands of Reading Lang were 318 million yuan, a year -on -year decrease of 4.68%.

Compared with the fierce competition currently learning hardware tracks, Reading Lang seems tepid. After the interim report was released, as of the close of August 19, the stock price of Reading Lang closed at HK $ 6.85/share, a cumulative decrease of 9.87%from the issue price.

The sales path is trapped offline, and the growth of revenue profit is blocked; after -sales complaints are frequent, and the transformation layout is not smooth ... Reading Lang has a lot of trouble. In the future, what kind of story can read Lang tell?

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