Hailiang Education Group Inc. (HLG) Reports Q3 EPS of $0.04 on Revenues of $66.36M

Hailiang Education Group Inc. (NASDAQ: HLG) reported Q3 EPS of $0.04. Revenue for the quarter came in at $66.36 million.

• Basic and diluted earnings per share were RMB0.24 (US$0.04) for the third quarter of fiscal year 2021, compared with basic and diluted earnings per share of RMB0.14 for the same period of last year.
• Revenue increased by 45.7% to RMB434.8million (US$66.4 million) for the third quarter of fiscal year 2021, from RMB298.5 million for the same period of last year. Revenue increased by 30.9% to RMB1,371.8 million (US$209.4 million) for the first nine months of fiscal year 2021, from RMB1,047.9 million for the same period of last year.
• Gross profit increased by 65.9% to RMB150.8 million (US$23.0 million) for the third quarter of fiscal year 2021, from RMB90.9 million for the same period of last year. Gross profit increased by 54.5% to RMB512.2 million (US$78.2 million) for the first nine months of fiscal year 2021, from RMB331.5 million for the same period of last year.
• Gross margin was 34.7% for the third quarter of fiscal year 2021, compared with 30.5% for the same period of last year. Gross profit margin was 37.3% for the first nine months of fiscal year 2021, compared with 31.6% for the same period of last year.
• Gross profit increased by 65.9% to RMB150.8 million (US$23.0 million) for the third quarter of fiscal year 2021, from RMB90.9 million for the same period of last year. Gross profit increased by 54.5% to RMB512.2 million (US$78.2 million) for the first nine months of fiscal year 2021, from RMB331.5 million for the same period of last year.
• Gross margin was 34.7% for the third quarter of fiscal year 2021, compared with 30.5% for the same period of last year. Gross profit margin was 37.3% for the first nine months of fiscal year 2021, compared with 31.6% for the same period of last year.
• Other income decreased by 84.1% to RMB1.3 million (US$0.2 million) for the third quarter of fiscal year 2021, from RMB8.0 million for the same period of last year. Other income decreased by 48.7% to RMB29.7 million (US$4.5 million) for the first nine months of fiscal year 2021, from RMB57.8 million for the same period of last year. The decrease was primarily due to a decrease in government grants of subsidies we received from local government.
• Operating expenses increased by 42.1% to RMB31.4 million (US$4.8 million) for the third quarter of fiscal year 2021, from RMB22.1 million for the same period of last year. Operating expenses increased by 21.4% to RMB84.4 million (US$12.9 million) for the first nine months of fiscal year 2021, from RMB69.5 million for the same period of last year.
• Income tax expense was RMB29.7 million (US$4.5 million) for the third quarter of fiscal year 2021, compared with RMB21.8 million for the same period of last year. Income tax expense was RMB113.3 million (US$17.3 million) for first nine months of fiscal year 2021, compared with RMB74.9 million for the same period of last year. The increase was mainly driven by the growth of educational services that were subject to income tax. The effective tax rate for the first nine months of fiscal year 2021 was 23.4%, compared with 22.3% for the same period of last year.
• Net profit increased by 66.3% to RMB100.8 million (US$15.4 million) for the third quarter of fiscal year 2021, from net profit of RMB60.6 million for the same period of last year.

"Continuing the strong growth in the first half of fiscal year 2021, we still maintained a solid upward momentum in the third quarter of fiscal year 2021. For the third quarter of fiscal year 2021, our revenue reached RMB434.8 million (US$66.4 million), an increase of 45.7% from RMB298.5 million for the same period of last year. The gross profit amounted to RMB150.8 million (US$23.0 million), a year-over-year increase of 65.9%. The gross margin was 34.7%, which increased from 30.5% for the same period of last year. The operating profit reached RMB120.7million (US$18.4 million), which increased by 57.2% on a year-over-year basis. The net profit attributable to the shareholders of the Company was RMB99.9 million (US$15.2 million), an increase of 67.2% from RMB59.7 million for the same period of last year, "commented Dr. Junwei Chen, the Chairman and Chief Executive Officer of Hailiang Education, "with us executing the increasingly refined management and budget control in this fiscal year, the revenue, gross profit, operating profit and the net profit attributable to shareholders of the Company for the first nine months of fiscal year 2021 increased by 30.9%, 54.5%, 43.1% and 39.4%, respectively. "

Dr. Junwei Chen continued, "We are pleased that we have made gratifying progress in promoting the implementation of our strategies and driving endogenous growth in the third quarter of fiscal year 2021. We plan to open Xianghu Future School and Ninghai Public School in September 2021 with a total capacity of approximately 5,652 students. Both Xianghu Future School and Ninghai Public School will be positioned as premier private schools, and Mr. Cuiwei Ye, the General Principal of Hailiang Education, will also serve as the Principal of Xianghu Future School. At the same time, our strategic cooperation with Hailiang Group also plays a significant role in promoting the expansion of our school network. In January 2021, Hailiang Group signed a cooperation agreement with the Government of Dingbian County, Shaanxi Province, marking the landing of our first Education Revitalization Project. Meanwhile, more Education Revitalization Projects for other regions are in progress."

"In fact, our main business has fully recovered from the impact of COVID-19 pandemic from last year. As a result, the third quarter's revenue increased significantly compared with the same period of last year. In addition, under the catalysis of the COVID-19 pandemic, the launch and promotion of our online educational training services have been accelerated. In the post-COVID-19 era, we expect to continue expanding this business and make it one of the key drivers of our revenue growth. Meanwhile, we believe that under a more comprehensive and disciplined budget control system, our gross and operating margin will also endure steady expansion." Ms. Deborah Lee, the Chief Financial Officer of Hailiang Education, continued, "To support the rapid development of our school network and diversified business portfolios, we are also pushing forward the optimization of our financial infrastructure and the implementation of financial business integration."

"While constantly expanding our business, actively fulfilling corporate social responsibilities to create value for society is also one of the prominent missions of Hailiang Education. This mission is reflected in our school running philosophy— 'Each person has a talent; everyone can achieve potential; make every life shine'. In July 2020, in cooperation with the Government of Seni District, Nagqu City, Tibet Province, we set up the 'Hailiang Tibetan Aid Class' in Tianma Experimental School, and 30 Tibetan students were admitted to this class with all tuition fees waived. After studying for half a year, the academic performance of these students in their final examinations of the first semester has been greatly improved compared to their peers in Tibet. In addition, in April 2021, we founded the "Student Rights Center" to encourage students and parents to actively participate in teachers' management and supervision, aiming to build a team of teachers with noble ethics and styles who are fully recognized by parents and our social community. As a private K12 education services provider, we are committed to creating long-term social value and building a sustainable education enterprise through integrating educational resources, establishing schools in the counties, innovating talent development, promoting educational technology, practicing corporate social responsibilities, and etc. "concluded Ms. Deborah Lee, our Chief Financial Officer.

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

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