"Internet+" vocational education, can people's livelihood education overtake?

Picture source: Oriental IC

Recently, Minsheng Education released its mid -term performance in 2022. In the first half of the year, the company realized a net profit of 339 million yuan, a year -on -year decrease of 11.6%.

As the first semi -annual report surrendered by the "Internet+" Vocational Education Group, can this transcript be recognized by the market?

Unspeakable

The financial report shows that in the first half of 2022, people's livelihood education achieved revenue of 1.274 billion yuan, a slight increase of 2.9%year -on -year. According to the financial report, the main reason for increasing income is the increase in the number of students and users of online education and campus education services. During the period, tuition and accommodation fees were 667 million yuan and 54.87 million yuan, a year -on -year increase of 9.36%and 18.24%, respectively.

Although it has stabilized the basic disk of campus education income, it is difficult to be excellent in profit. In the first half of 2022, the net profit of Memorial Education was 339 million yuan, a year -on -year decrease of 11.6%. The gross profit was about 734 million yuan, which was basically the same as the same period last year, but the gross profit margin dropped from 58.7%to 57.6%. Facing the embarrassment of "increasing income and increasing profit", the company mentioned the reasons for the increase in the operating cost of online education.

The online education business mainly covers adult online education services provided by Aopeng Education and Minsheng Online and Management Graduate Education services provided by the Du Xuexue Network. According to the financial report, due to the increase in the promotion and publicity cost of online education, sales and distribution expenses during the reporting period also increased by 11%year -on -year to 110 million yuan. During the same period, the company's sales cost was as high as 540 million yuan, which was almost equivalent to the annual sales cost of 2020.

After announcing the transformation of "Internet+" vocational education group, the company's cost and expenditure in 2021 has increased significantly, especially sales and distribution expenses have increased by ten times year -on -year. Even though the company claims to "continue to improve operating costs", from the results of the first half of the year, it has not effectively controlled the cost growth.

In addition, in terms of liabilities, the total mobile liabilities of people's livelihood education during the reporting period were 2.914 billion yuan, which was reduced compared with the end of 2021. Among them, the main liabilities decreased significantly. Compared to a decrease of 679 million yuan. However, this change is not caused by the optimization of the company's asset structure, but mainly related to the time point of the pre -charging tuition and accommodation fees. The company charges students' tuition and accommodation fees in advance before the start of each school year.

It is worth noting that during the reporting period, dividends have risen from 23,000 yuan to 182 million yuan, and interest -bearing banks and other borrowings have also risen from 296 million yuan to 492 million yuan. During the period, the company's capital liability ratio was increased from 41.3%at the end of 2021 to 44.8%at the end of 2021.

Limited income growth, increased expenses, and increased capital liabilities not only put the profit end, but also have a certain impact on cash flow. As of June 30, 2022, the company's cash and cash equivalents were 2.585 billion yuan. As of December 31, 2021, the company's cash and cash equivalents were still 2.75 billion yuan.

Overall, as the first semi -annual report after the transformation, the achievements of people's livelihood education are unsatisfactory.

Last chase

In the 2021 annual report, Minsheng Education announced that it had been transformed into a "Internet+" vocational education group. Since its first proposal "online+offline two -wheel drive, higher education+vocational education collaborative development" strategy, Minsheng Education has explored online business for more than two years. As the former "first share of private high education", the company has traditional offline advantages. Why is it so attached to online?

Public information shows that people's livelihood education established in 1998 is mainly engaged in campus education centered on higher education. In the Mainland, there are ten schools including Chongqing Humanities and Technology College and Yunnan University Dianchi College. In 2017, Minsheng Education was listed on the main main of the Hong Kong Stock Exchange and was the first private High Education Group in China.

At the beginning of the listing, the concentration of private high education industries was low, and it was still in the stage of "horse race". During this period, Minsheng Education invested in a number of colleges and universities. On the one hand, it helped the company to quickly expand its market share, but on the other hand, it also attracted questions from the capital market. In 2018, Minsheng Education will use 55%of the income to acquire schools. A voice immediately pointed out that the revenue of people's livelihood education mainly relied on the acquisition of schools to achieve extension, and endogenous growth was poor.

Such a sound is not unreasonable. It is impossible for the company to "buy and buy", digestion and acquire mergers and acquisitions, and put forward a lot of challenges to people's livelihood education. And with the acceleration of the market, the valuation of the target is getting higher and higher. Whether it is future development or the cost of acquisition, exploring other businesses has become an important issue. The rise of online education, and people's livelihood education has also detained the key to future development on the "Internet+" vocational education.

For the layout of online business, Minsheng Education continues the logic of extension mergers and acquisitions and rapid expansion. From 2020 to 2021, Minsheng Education participated in the acquisition of the equity of six online education companies. Specifically, including the adult online education service platform Minsheng and online, management graduate education service enterprises all learn the network, and Apeng Education of distance education service operation institutions. In order to form a closed loop of "recruiting", Minsheng Education also acquired 51%of the SaaS service platform of SaaS service platform that focuses on human resources, providing students with internship and employment information resources.

After more than two years of layout, the "Internet taste" of people's livelihood education has gradually become clear. The financial report revealed that as of June 30, 2022, Apeng Education and Minsheng Online cooperated with more than 300 institutions to provide about 1.1 million students with more than 1.1 million online education centers in the country with about 1.900 online and offline learning centers. Support services such as adult higher education. The cumulative number of users of the Internet is about 2.89 million, and cooperation with more than 160 business schools. At the end of 2021, Zuo Yichen, president of Minsheng Education Group, publicly stated in the interview: "At present, this model can be said to be unique in the industry. The comprehensive Internet+vocational education service system can complete the closed loop from enrollment to training to employment. This It's our biggest advantage. "

However, compared with the ambitious layout, the current online business seems to have not yet brought and paid a return. Whether the new business can support the development of the company also takes time to wait and see.

Worried

It is announced that the "Internet+" vocational education group has not been able to save the stock price of people's livelihood education. In the first half of 2022, the company's stock price showed a trend as a whole.

As of August 22, 2022, Minsheng Education closed at HK $ 0.59 per share, which has fallen 70 % compared with its highest point. Although Minsheng Education is confident in "Internet+" vocational education, it is clear that the capital market does not buy it. Why is it so misplaced? Taken together, there are still many concerns about the "Internet+" vocational education transformation of people's livelihood education.

The first is to invest in investment. After transforming the "Internet+" vocational education group, Minsheng Education needs to invest more in R & D to build a "moat". Especially in the 2021 report, the company clarified that it will no longer invest in integrating new physical schools in the future, which is equivalent to betting the incremental space on the "Internet+" vocational education. Therefore, whether it can build product advantages on the basis of technical basis and drive endogenous growth, it becomes more critical for people's livelihood education. Relying on extension M & A to start online business, it cannot be fully recognized by the capital market.

But strangely, in the 2022 mid -term performance report, Minsheng Education did not disclose the specific figures of R & D expenses. At the end of 2021, Zuo Yichen mentioned in an interview that in recent years, people's livelihood education has accumulated more than 1 billion yuan in investment in technology research and development, but there is no public data to support it. In the case of a mystery of R & D expenditure, it is difficult to convince everyone with the Internet -based transformation strategy, and the concerns of capital cannot be dispelled.

The second is the issue of income from online business. Although Minsheng Education has announced the transformation of the "Internet+" vocational education group, from the perspective of its income structure, the company's income is still largely dependent on the tuition and accommodation income of campus education. Among the income of 1.274 billion yuan in the first half of the year, the 722 million yuan of tuition fees over the accommodation of 722 million yuan accounted for an absolute proportion. Instead, the remote education services and online curriculum service income related to online education have declined year -on -year.

Although the company has transferred its strategic focus to online, the online business obviously has not been able to carry the banner of income. How to balance online and offline business, while stabilizing the fundamental fundamentals of offline campus education business, and winning support for online business exploration, it is still a subject to explore the next step of people's livelihood education.

Finally, the competitive vocational education market is fierce. The "Internet+" vocational education track is not a blue ocean, and there are already many players in the industry. For adult education and vocational education companies, creating an OMO model, online and offline collaborative innovation play has become a consensus. The transformation line is the common choice of traditional offline education institutions. The transformation line does not mean establishing a new growth curve. Moreover, the online transformation of people's livelihood education is relatively late, and it is difficult to say that it has obvious advantages.

Compared with emerging institutions with online training, there is uncertainty for online business development of Minsheng Education. In 2021, the sales and distribution expenses of Minsheng Education have increased ten times year -on -year, which will be highlighted on the pressure of online vocational education.

Although the "Internet+" vocational education is infinite, the long -awaited people's livelihood education, if you want to get a share, there are many difficulties that need to be overcome.

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