Hailiang Education Group Inc. (HLG) Reports Q2 EPS of $0.09 on Revenues of $97.9M

Hailiang Education Group Inc. (NASDAQ: HLG) reported Q2 EPS of $0.09. Revenue for the quarter came in at $97.9 million.

• Revenue was RMB638.5 million (US$97.9 million), an increase of 22.9% from RMB519.5 million for the same period of last year.
• Gross profit was RMB316.9 million (US$48.6 million), an increase of 29.9% from RMB244.0 million for the same period of last year.
• Gross margin was 49.6%, compared with 47.0% for the same period of last year.
• Net profit attributable to the Company's shareholders was RMB241.1 million (US$37.0 million), an increase of 9.9% from net profit attributable to the Company's shareholders of RMB219.4 million for the same period of last year.
• Basic and diluted earnings per share were RMB0.58 (US$0.09), compared with basic and diluted earnings per share of RMB0.53 for the same period of last year.
• As of early February 2020, the senior high school students in the Company's international program had received more than 300 formal and conditional offers from universities. About 60% of the students in the Victoria Certificate of Education ("VCE") class formally accepted to the top 50 universities in the world, and about 75% of the students in the General Certificate of Education Advanced Level ("A-Level") class had been conditionally accepted to the top 100 universities in the world, such as University College London and University of Manchester.
• In the second quarter of fiscal year 2021, we launched some educational technology systems as pioneering achievements of our "The Project of Revitalizing Education through Technology". Star Teacher Training platform, a platform that provides growth training courses for our teachers, Hailiang Cloud Exercise system, an electronic homework and precise teaching system, and Home-School Co-education platform, a home-school communication service platform. The Company will continue to promote the use of educational technology in its school network.

"We are very pleased to see that the Company's business has shown strong resilience during the COVID-19 pandemic. With the stabilization of the COVID-19 pandemic in China, the Company's business has gradually returned to normal and achieved encouraging results for the reporting periods. In the first half of fiscal year 2021, we recorded revenue of RMB937.0 million (US$143.6 million), an increase of 25.0% from RMB749.4 million for the same period of last year. The net profit attributable to the Company's shareholders was RMB268.0 million (US$41.1 million), an increase of 31.3% from RMB204.1 million for the same period of last year," said Dr. Junwei Chen, the Chairman and Chief Executive Officer of Hailiang Education. "As we improve the quality of our primary, middle and high school educational services and ancillary educational services, we are confident that, as one of the market leader, we will gain more market share and drive long-term profit growth for shareholders in the future."

"Benefiting from the effective control of COVID-19 and the gradual recovery of economy in China, as well as the flexible measures adopted by the Company and the application of more educational technology products, the Company's growth momentum in the first half of fiscal 2021 was remarkable. Our revenue increased by 25.0% compared to the same period of last year. In the first half of fiscal year 2021, the gross margin was 38.6%, an increase of 6.5 percentage points compared to the same period of last year. The increase in gross margin was mainly due to the continued increase in average tuition and student enrollments, a decrease in the proportion of revenue generated from low margin business such as study trip services, and the deferral in recognition of tuition earned in fiscal year 2020 to fiscal year 2021 due to the impact of COVID-19," said Ms. Deborah Lee, the Chief Financial Officer of Hailiang Education. "In the future, we believe that the Company's gross margin will remain at a relatively stable level with further improvement of school utilization rate, the opening of new schools, and the Company's continuous investment in educational technology applications."

Dr. Chen continued, "Looking forward, Hailiang Education will continue to adhere to four strategic paths. First, we will drive endogenous growth through the rapid improvement of school utilization rate and the steady rise in tuition with the help of the Company's brand that has been gradually established and expanded in East China and across the country. Second, we will continue our efforts to seek suitable acquisition opportunities in China and overseas countries to achieve external expansion. Third, we will focus on the development of ancillary educational services, especially educational training business as a new direction to drive our growth. Last, we will continue to vigorously promote the two strategic projects announced earlier this fiscal year -- "The Project of Invigorating Education with Talents" and "The Project of Revitalizing Education through Technology, to solve the two bottlenecks of "talents supply" and "Resource Replication" during the rapid, high-quality and standardized remote expansion of schools."

Dr. Chen concluded, "We are very excited about Hailiang Education's development opportunities in the near future along with the gradual economy recovery and stable COVID-19 control in China, although the impact of COVID-19 is still ongoing and recovery of the global economy remains uncertain. We are confident that our abundant talent pool and innovative education technology applications will facilitate Hailiang Education's rapid expansion in China and overseas countries with our promotion of the two strategic projects of 'Invigorating Education with Talents' and 'Revitalizing Education through Technology'. At the same time, we also see opportunities for educational training of 'online merging offline integration'. We expect educational training to become a new revenue source by utilizing the Company's nationwide school network. We expect that the Company's healthy debt-to-asset ratio and sufficient cash flow will support the implementation of these growth strategies for long-term growth and success."

For earnings history and earnings-related data on Hailiang Education Group Inc. (HLG) click here.

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