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spk04: Ladies and gentlemen, thank you for standing by, and welcome to the third quarter of 2021 Carina International INC Earnings Conference call. At this time, all participants are listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question during the session, please press star 1 on the telephone. If you require any further assistance, please press star 0. I would now like to hand the conference I must also advise you that the conference has been recorded today, November 23, 2021. I would now like to hand the conference over to first speaker today, Ms. Sylvia Yang, the Investor Relationship Manager. Thank you. Please go ahead.
spk02: Thank you, Operator. Hello, everyone, and welcome to Torino's Earnings Conference Call for the third quarter of 2021. The company's earnings results were released earlier today. and are available on our IR website, ir.tedu.cn, as well as our Newswire services. Today, you will hear from Ms. Nancy Ying Sun, our CEO, and Mr. Calvin Lau, our CFO, who will take you through the company's operational and financial results for the third quarter of 2021, and give revenue guidance for the fourth quarter of 2021. After their prepared remarks, Nancy and Kelvin will be available to answer your questions. Before we continue, please note that this discussion today will contain certain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to deform materially from our current expectations. Terena does not assume any obligation to update any forward-looking statements except as required under applicable law. Also, please note that some of the information to be discussed includes non-GAAP financial measures as defined in Regulation G, the U.S. GAAP financial measures and information reconciling these non-GAAP financial measures to Terena's financial results prepared in accordance with U.S. GAAP. included in Tarina's earnings release, which has been posted on the company's IR website at ir.tdu.cn. Finally, as a reminder, this conference call is being recorded. In addition, a webcast of this conference call is available on Tarina's investor relations website. I will now turn the call over to Ms. Nancy Ying Sun, the CEO of Tarina.
spk00: Thank you, Yang Shuang. Thank you, Sylvia, and thanks everyone for joining us today. We want to thank you all
spk07: of our investors for your continuous support for us. So we are delighted to announce that Tarina's results for the third quarter of 2021 for everyone. Our total net revenues in the third quarter of 2021 was RMB $615.2 million, which is in accordance with the revenue guidance we gave in last quarter.
spk00: In the first three quarters of 2021, the company's net income total increased from 12.476 billion yuan in the same period of 2020 to 17.312 billion yuan, which increased by 38.8%. The net profit increased from 37.9% in the first three quarters of last year to 11.6% to 49.5%. From the beginning of 2021 to the end of this report, the company's net profit increased from 4.723 billion yuan in the same period of 2020 In the first three quarters of 2021, our total net revenues have shown a significant increase of 38.8% to RMB 1,731.2 million from RMB 1,247.6 million in the same period of 2020.
spk07: Gross profit margin has shown an increase of 11.6% points to 49.5% in the first three quarters of 2021, from 37.9% in the same period of last year. From the beginning of 2021 to the end of this reporting period, gross profit has shown an increase of 81.6% to RMB $857.5 million. from RMB 472.3 million in the same period of 2020.
spk00: Net revenues from childhood and adolescent quality education business increased by 14.8%.
spk07: from RMB 289.6 million in 2020 Q3 to RMB 332.6 million in 2021 Q3. The number of student enrollments increased by 19.6% from 122,800 or 122,800 in 2020 Q3 to 146,900 in 2021 Q3. The number of new contracted students, including new registered students and renewal students, increased by 21.0%, from 31,400 in 2020 Q3 to 38,000 in 2021 Q3. 那么在成人职业教育方面,我们的业务净收入从2020年第三季度的3.312亿元下降到了2021年同期的2.826亿元,下降了14.7%。
spk00: Net revenues from adult professional education business dropped by 14.7%.
spk07: from RMB 331.2 million in 2020 Q3 to RMB 282.6 million in 2021 Q3. This is largely due to the number of student enrollments dropped by 13.0%, from 38,400 in 2020 Q3 to 33,400 in 2021 Q3. However, we have seen an increase of 7.4% in number of student enrollments, as compared to the student enrollments of 31,100 in 2021 Q2.
spk00: The total cost and operating expenses for us have increased by 19.689 yuan in the first three seasons of 2020, and increased by 3.6% to 20.400 yuan in the same period in 2021. The operating losses in the first three seasons of 2021 were also greatly reduced by 7.213 yuan in the same period last year, 57.2% to 3.087 yuan. 2021年前三季度净亏损2.932亿元,相比2020年同期的6.765亿元收窄了56.7%。这主要是由于总净收入的显著增长,以及在今年前三季度持续执行有效的成本和费用的优化与管理。 In the first three quarters of 2021, we have enacted and implemented a series of effective policies and measures
spk07: to minimize the negative impacts from the adverse weather conditions and COVID-19 pandemic on our business. Through continuous efforts in optimizing the organizational structure, improving operational management efficiency, and controlling cost and expenses, we have only seen a slight increase in our total cost of revenues and operating expense by 3.6% to RMB 2,040.0 million in the first three quarters of 2021, from RMB 1,968.9 million in the same period of 2020 on the premise that our student enrollment are increasing. Our operating loss in the first three quarters of 2021 has significantly decreased by 57.2% to RMB 308.7 million. from RMB 721.3 million in the same period of last year. Net loss in the first three quarters of 2021 was RMB 293.2 million, which was 56.7% less than the net loss of RMB 676.5 million in the same period of 2020. This was mainly due to the significant increase in total net revenues and the continued implementation of effective optimization and management of costs and expenses in the first three quarters of this year. 公司的员工总人数从2020年第三季度末的9905人上涨了4.2%到2021年第三季度末的10321人。
spk00: Our total number of employees rose by 4.2%, from 9,905 at the end of 2020 Q3 to 10,321 at the end of 2021 Q3.
spk07: The production capacity per capita increased by 47.0% to about RMB 169,000 in the first three quarters of 2021, from about RMB 115,000 in the same period of last year. In 2021, we continue to focus on our core strategy of improving the operational and management efficiency of our adult professional education learning centers. Since September 30, 2020, we have stopped the operation of six underperforming adult professional education learning centers, and this leads to a decline in number of student enrollments by 8.9% to 55,400 in the first three quarters of 2021 as compared to the number of student enrollments in the same period of last year. However, net revenues per single learning center increased by 22.7% to about RMB 8.15 million in the first three quarters of 2021 from about RMB 6.64 million in the same period of 2020.
spk00: So the number of childhood and adolescent quality education learning centers has expanded from 236 at the end of 2020 Q3 to 238 at the end of 2021 Q3.
spk07: The number of student enrollments per single learning center increased from 543 in the first three quarters of last year to 689 in the same period of 2021. Net revenues per single learning center rose by 86.3% from about RMB 2.04 million in the first three quarters of last year to about RMB 3.80 million in the same period of 2021.
spk00: Next, I will report and share with you the status of our operations in 2021 Q3. 偶尔发生的灾害天气和疫情给局部区域带来了短期的影响,主要表现在郑州、南京、长沙、武汉等城市部分学习中心暂停线下营业。 During 2021 Q3, the sporadic occurrence of severe weathers and COVID-19 cases have brought short-term impacts to some areas in China, which were mainly manifested in the suspicion of offline operations of some learning centers,
spk07: in certain cities including Zhengzhou, Nanjing, Changsha, and Wuhan city, and etc. Our entire team has taken prompt and effective action. For example, we take some offline teaching to online delivery. Up to now, the negative impact on our operations have been mostly eliminated. 下面我们一起看一下成人IT职业教育业务的情况。 Now I will discuss the operation of our adult professional education business.
spk00: Compared to the same period of 7.837 billion yuan in 2020, it increased by 6.0%. At the same time, the cost of the first three seasons of 2021 was 2.979 billion yuan, which is 1.1% lower than the same period of 3.012 billion yuan in 2020. The net profit of the first three seasons of 2021 was 5.33 billion yuan, which is 10.5% higher than the same period of 4.825 billion yuan in 2020.
spk07: From the beginning of 2021 to the end of this reporting period, our adult professional education business has continued to adhere to the business strategy of optimizing cost, increasing production capacity, healthy operation, and steady development. Net revenues increased by 6.0% to RMB 830.9 million in the first three quarters of 2021, from RMB 783.7 million in the same period of 2020 Meanwhile, cost of revenues decreased by 1.1% to RMB 297.9 million in the first three quarters of 2021, from RMB 301.2 million in the same period of 2020. World's profit for the first three quarters of 2021 was RMB 533.0 million. which was 10.5% higher than the gross profit of RMB 482.5 million in the same period of 2020.
spk00: Our Q3 income in 2021 was 2.826 yuan, which is 14.7% lower than Q3's 3.312 yuan in 2020. However, with the effective control of operating expenses in 2021, our net profit rate in the first three seasons in 2021 was 64.1%. Compared to the same period in 2020, 61.6% increased by 2.5%.
spk07: The number of adult professional education learning centers at the end of 2021 Q3 decreased by six as compared to the number of learning centers at the end of 2020. And the total learning center site areas decreased by 7.4% to 119,400 square meters. Our net revenues decreased by 14.7%. to RMB 282.6 million in 2021 Q3 from RMB 331.2 million in 2020 Q3. However, by implementing effective control on operating expenses throughout the first three quarters of 2021, gross profit margin in the first three quarters of 2021 increased by 2.5% point to 64.1% in the first three quarters of 2021, from gross profit margin of 61.6% in the same period of 2020.
spk00: We have also made good progress in optimizing the structure of operating expenses.
spk07: our operation teams have increased the percentage of new student recruitment from underground promotion in university, and word-of-mouth promotional activities resulting in a 10.2% reduction in selling expenses in 2021 Q3, as compared to the selling expenses in the same period of 2020. 基于熊寇的教学实力和就业服务的体系,
spk00: Based on our strong teaching team and job placement service system, the six-month post-course job placement rate of our students remained above 90% in 2021 Q3. A good security of job placement is the foundation for the sustainable growth of our business. We are very pleased to see a series of government policies that encourage the development of adult professional education. Looking into 2021 Q4, we will continue to adhere to our business strategy of healthy operation and steady development.
spk07: as well as achieving better efficiency, developing new customer acquisition channels, and improving profitability. 好的,接下来我和大家介绍一下我们的青少年素质教育业务的情况。 Okay, next I will discuss the status of our operation of childhood and adolescent quality education business. 伴随着国家双减政策的落地,发展真正的符合儿童和青少年成长规律的教育将获得国家长期的支持和鼓励。
spk00: 我们积极响应国家政策的要求,规范经营。 正如大家所了解的,我们的青少年科技素质教育业务 长期致力于成为每个孩子可以信赖的科技素质教育专家 和每个家庭可以信赖的科技素质教育伙伴。 这符合国家政策指引的方向。 With the implementation of the government double reduction policy, the development of education that truly supports the growth of children and teenagers
spk07: will receive long-term support and encouragement from the government. We actively respond to the government policy and shall ensure that our operations would comply with all the relevant requirements. As you all know, our childhood and adolescent information technology quality education business has long been committed to being an expert in information technology education that every child can trust and becoming an IT education partner that every family can depend on. This is in compliance with the national policy.
spk00: In 2021 Q3, our childhood and adolescent quality education business
spk07: has continued to improve in all levels of products and services, operation and customer acquisition. In general, the net revenues increased significantly, and with more effective control of cost of revenues and operating expenses, we have also achieved better operational efficiency.
spk00: In the end of the third quarter of 2021, the youth quality education business had 238 revenue centers. In the end of the third quarter of 2020, the youth quality education business had 238 revenue centers. In the end of the third quarter of 2021, the youth quality education business had 238 revenue centers. In the end of the third quarter of 2021, the youth quality education business had 238 revenue centers. In the end of the third quarter of 2021, the youth quality education business had 238 revenue centers. At the end of 2021 Q3, the number of childhood and adolescent quality education learning centers was 238, which was two more than the number of learning centers at the end of 2020 Q3.
spk07: In 2021 Q3, net revenues of childhood adolescent quality education business increased year-over-year by 14.8%, to RMB $332.6 million. The cost of revenues increased year over year by 15.7%, gross profit increased year over year by 13.5%, and the gross profit margin reached 38.8%. The number of student enrollments increased year over year by 32.5% to 163,300 in the first three quarters of 2021, as compared to the number of student enrollments in the same period of last year.
spk00: Compared to last year, the growth of about 6.84 million people was about 46.2%. Due to the continuous improvement of products and services, increasing the satisfaction of students is our main focus. Therefore, in the third quarter, the ratio of new and old students' reputation and tuition fees continued to increase, reaching 63.7%. In the first three quarters of 2021, the proportion was 64.5%, In terms of revenue growth, the number of new contracted students, which includes new registered students and renewal students, increased year-over-year by about 21.0% to approximately 38,000 in 2021 Q3, as compared to the same period of last year.
spk07: The number of new contracted students, including new registered students and renewal students, increased year over year by about 46.2% to approximately 100,000 in the first three quarters of 2021, from approximately 68,400 in the same period of last year. As our operational priorities are continue to optimize products, improve services, and enhance students' satisfaction About 63.7% and 64.5% of new contracted students came from student renewal or word-of-mouth promotional activities in 2021 Q3 and in the first three quarters of 2021, respectively. Students' high satisfaction level led to a renewal rate of students who have been studying our programs for more than one year, over 80%.
spk00: In 2021 Q3, we have continued
spk07: to work on improving the efficiency of marketing activities and student acquisition. The average selling expense, excluding personnel-related salary and welfare expenses, per each new contracted student was about RMB 1,063 in 2021 Q3, dropped year over year by 18.6%. In the first three quarters of 2021, the average selling expenses per each new contracted student What about RMB 1,175 decreased year-over-year by 26.4%? 再现业务持续增长 2021年第三季度收入2850万元 完毕增长3.1% 在少儿总收入中占比约8.6% Our childhood and adolescent quality education online business has continued to grow. with a revenue of RMB 28.5 million in 2021 Q3, which represented an increase of 3.1% from the previous quarter, and accounted for about 8.6% of the total net revenue of childhood and adolescent quality education in 2021 Q3. 接下来的第四季度,我们通过持续的优化业务模型提高服务和口碑,
spk00: In 2021 Q4, we will continue to optimize our business model, enhance the services and reputation, and increase efficiency so as to achieve a healthy revenue growth.
spk07: In 2021 Q4, we will continue to optimize our business model, enhance the services and reputation, and increase efficiency so as to achieve a healthy revenue growth.
spk00: Looking ahead, under the favorable of government policies on the adult professional education and childhood and adolescent quality education,
spk07: We will continue to provide high-quality educational products and services, enhance operational efficiency, and maintain a healthy business growth. Offline user management and customer acquisition channels, as well as online live broadcasting education programs, will continue to be the two important bases for our development. We will adhere to our original vision of education, dedicated to providing good educational products and continue to explore healthy business models to achieve business profitability as soon as possible.
spk00: 借此机会,再次感谢大家一直以来对我们的关注和支持。 下面我们有请CFO Kevin为大家带来2021年第三季度财务数据的介绍。 I want to take this opportunity to thank you all again for your continued support. I'd like to turn the call to Kevin, our CFO,
spk07: who will share with you the third quarter of 2021 financial highlights.
spk06: Thank you, Lindsay. Now I would like to take you through the third quarter of 2021 financial highlights. Total net revenue decreased by 0.9% to RMB 615.2 million in the third quarter of 2021, from RMB 620.8 million in the same period of 2020. Net revenue from adult professional education business decreased by 14.7% to RMB $282.6 million in the third quarter of 2021, from RMB $331.2 million in the same period of 2020. The decrease was correlated to decrease in student enrollments from $38,400 in the third quarter of 2020 to $33 in the same period of this year. Net revenues from childhood and adolescent quality education business increased by 14.8% to RMB $332.6 million in the third quarter of 2021, from RMB $289.6 million in the same period of 2020. The increase was primarily due to decrease in student enrollments from 122,800 in the third quarter of 2020 to 146,900 in the same period of 2021. Cost of revenues increased by 11.5% to RMB 302 million in the third quarter of 2021 from RMB 270.8 million in the same period of 2020. For adult professional education business, cost of revenues increased by 3.8% to RMB 98.6 million in the third quarter of 2021, from RMB 95 million in the same period of 2020. The increase was primarily due to increase in social security fees, which were examined according to the preferential policies enacted by the government during COVID-19 pandemic in the third quarter of 2020. but were not examined in the third quarter of 2021. For Chaho, an adolescent quality education business, cost of happiness increased by 15.7% to RMB 203.4 million in the third quarter of 2021, from RMB 175.8 million in the same period of 2020. The increase was primarily due to increase in personnel-related costs resulting from growing number of teaching staff at our childhood and adolescent quality education learning centers, and increased in social security fees, which were exempt according to the preferential policies and edited by the government during COVID-19 pandemic in the third quarter of 2020, but were not exempt in the third quarter of 2021. Cross-border decreased about 10.5% to RMB $313.2 million in the third quarter of 2021, from RMB $350 million in the same period of 2020. Gross margin, which is equal to gross profit divided by net revenues, was 50.9% in the third quarter of 2021, compared to 56.4% in the same period of 2020. The decrease was mainly attributable to the decrease in net revenue from adult professional education. which results in decrease in its gross profit and gross margin in the third quarter of 2021. Total operating expenses decreased by 1.2% to RMB $401.7 million in the third quarter of 2021, from RMB $406.5 million in the same period of 2020. Total non-GAAP operating expenses, which exclude share-based compensation expenses, decreased by 0.4% to RMB397.7 million in the third quarter of 2021, from RMB399.3 million in the same period of 2020. Total share-based compensation expenses allocated to the related operating expenses decreased by 45.4% to RMB4 million in the third quarter of 2021, from RMB7.3 million in the same period of 2020. Selling and marketing expenses decreased about 6.5% to RMB 223.7 million in the third quarter of 2021, from RMB 239.2 million in the same period of 2020. The decrease was mainly due to decrease in advertising expenses in the third quarter of 2021 as compared to advertising expenses incurred in the same period of 2020. General and administrative expenses increased by 5.9% to RMB 151.5 million in the third quarter of 2021, from RMB 143.1 million in the same period of 2020. The increase was mainly due to a one-time charge of the loss arising from the disposal of property and partially offset by decrease in office and other miscellaneous expenses. Research and development expenses increased by 9.5% to RMB 26.6 million in the third quarter of 2021, from RMB 24.3 million in the same period of 2020. The increase was mainly due to increase in social security fees which were examined according to the preferential policies and data by the government during COVID-19 pandemic in the third quarter of 2020, but were not examined in the third quarter of 2021. Operating loss was RMB 88.5 million in the third quarter of 2021, compared to operating loss of RMB 56.6 million in the same period of 2020. Non-GAAP operating loss with excluded share-based compensation expenses was RMB 84.4 million in the third quarter of 2021, compared to non-GAAP operating loss of RMB 49.2 million in the same period of 2020. We recorded an income tax expenses of RMB 8 million in the third quarter of 2021, compared to income tax expenses of RMB 10.1 million in the same period of 2020. As a result of the fourth going, net loss was RMB 94.7 million in the third quarter of 2021, compared to net loss of RMB 63.9 million in the same period of 2020. Non-GAAP net loss, which excluded share-based compensation expenses, was RMB 90.5 million in the third quarter of 2021, compared to non-GAAP net loss of RMB 56.5 million in the same period of 2020. Loss per ADS was RMB 1.64 in the third quarter of 2021, compared to loss per ADS of RMB 1.16 in the third quarter of 2020. Non-GAAP loss per ADS which excluded share-based compensation expenses was RMB 1.57 in the third quarter of 2021, compared to the non-GAAP loss per ADS of RMB 1.02 in the third quarter of 2020. Net cash outflow used in operating activities in the third quarter of 2021 was RMB 35.4 median. Net cash inflow from investing activity in the third quarter of 2021 was RMB28.6 million. The net proceeds from the disposal of property and office equipment in the third quarter of 2021 were RMB46 million and RMB0.7 million respectively. Capital expenditure incurred on leasehold improvement and office equipment in the third quarter of 2021 was RMB17.9 million. In terms of financial guidance, based on our current operations, total net revenues for the fourth quarter of 2021 are expected to be between RMB 610 million and RMB 640 million. After taking into consideration the seasonal fluctuation factors and likely continuous impact of the COVID-19 pandemic, This guidance is based on the current market conditions and reflects the company's current and preliminary estimates of market and operating conditions, which are subject to change, particularly as to the potential impact of COVID-19 on the economy in China and elsewhere in the world. This concludes my financial highlights section. AJ, operator, we are ready for questions.
spk04: Certainly. Participants who wish to ask a question please press star 1 on your telephone and wait for your name to be announced. If you would like to withdraw a question, please press the pound or hash key. Press star followed by 1 to ask a question. Thank you. Once again, if you wish to ask a question, Please press star 1 on your telephone.
spk05: Your first question comes from the line of Keita King. Please go ahead.
spk03: Hi. Thank you for the strong operating performance in 2021. It's good to see. I just have two main questions. The first is, you know, in prior years, you guys were repurchasing stock quite meaningfully. Is there any consideration given where things are trading right now to launch a share repurchase plan? And the second question is, Do you have any guidance on when you expect to reach breakeven, and does the company have sufficient liquidity to get there? Thank you.
spk07: 先翻译一下,有两个问题,这来自Theodore King. 第一个问题关于咱们的股票收购的问题。 在之前我们看到咱们进行了大量的股票收购, 后期有没有咱们这个stocks, share repurchase plan, 还有没有继续进行? 然后目前为止咱们公司的流动性 是一个怎样的情况? 跟 我们分享一下,谢谢。 Thank you, Bill. Okay, I'm going to answer your first question. This is a very good question, thank you. Regarding the share repurchase plan, I think up to now we still haven't have any
spk06: share repurchase plan on the table for discussion, for the board discussion. I think it's one of the very good options for us. Once we have any decision on any share repurchase plan, we will make an appropriate announcement. Up to now, at least at this moment, we don't have any share repurchase plan on the table. Thank you. And Lance is going to answer your second question.
spk00: So just try to answer your second question. First, let me rephrase your question. You're asking about when can we break even, and also your question is also about
spk07: our current or the status quo of our liquidity, right?
spk03: Correct, yeah.
spk00: Okay. Well, first of all, let me say that to break even as soon as possible,
spk07: This has always been the priority of the management.
spk00: So because we have a very stable
spk07: adult information technology education business and we are looking at further improve our cost structure and improve our operational efficiency as well as improving our profitability.
spk00: China's leading company. In the beginning, in the exploration of the product and the business model, we have developed very good continuous accumulation to this day. From the beginning of last year to now, we continue to explore to make this business reach its final success as soon as possible. What efforts have we made? First of all, how can our students have more consumption of classes? In order to achieve such a goal, our services and courses continue to improve, so that the number of students continues to increase. So actually, we are doing quite good in several fronts. For example, one of our businesses is called the
spk07: childhood and adolescent quality education business, or kid business, which also is another stream of revenue for us. It is a new business. Actually, this is a business in China starting in 2017, and we have been always the top leader in terms of the adolescent and childhood quality education business. And at the beginning of this year, we tried to explore new opportunities to create new products and new services. And now we can say that we are the veteran or we are very experienced in this industry. Starting last year, we began to think about how can we improve profitability for this business. And by that, first, we need to enroll more students in the classroom. We need to promote more service and more business. And also, we provided a series of different short-term campus-based learning opportunities for those students to choose from. Those are some of the methods that we adopted to improve profitability for this business.
spk00: From our previous efforts, you can see that our income is growing steadily. To make this business profitable, the other dimension is how we optimize our business model and then further manage our costs and expenses. I am very happy to share with you that we have made a big breakthrough in the management of costs and fees, mainly in the third quarter. We have adjusted the organizational structure. For example, we adjusted the organizational structure of the entire Group Central Taiwan. Next, we will further adjust the structure of the SPOT Central Taiwan in the area, and then continue to reduce our costs and fees to achieve business profits as soon as possible.
spk07: So from those efforts, as you can see, that we try our best to continue to improve our revenue in a very steady way. And looking to the future, in order to improve the profitability of all of our business, we need to continue to iterate and optimize our business models, decrease cost, and optimize our expenditure. We actually made a lot of breakthroughs. which I'm very happy to share with you. For example, in the third quarter, we have restructured our organization structure. For example, we have restructured our group meet platform, and we will continue to do that in the future. In the meantime, we will continue to lower our cost, perfect our expenditure in order to improve profitability of this business. 基于这个业务,还有第三点补充就是
spk00: Thirdly, I want to say that one of our core competitive advantages
spk07: is offline acquisition expenditure as well as offline centers operation. And we have accumulated a lot of good experience in terms of offline acquisition, and we will continue to do that, and we will continue to leverage this competitive edge in the future in order to lower the cost, improve our expenditure structure, so as to improve our profitability. 最后我想说的是,
spk00: And
spk07: Lastly, I want to say that we will continue to lower the cost to perfect our expenditure because right now our cash revenue, as you can see, are increasing. They are increasing a lot. That means our operational liquidity right now is in a very positive situation, and this will be our top priority for the future month.
spk00: In addition, our operating management team is continuing to find other financing methods. So that concludes my answer for you. Hopefully, I can answer your question. And thank you again for your wonderful question.
spk07: Thank you.
spk04: Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone.
spk00: Okay.
spk06: So, AJ, while we are waiting for questions from our guests, I think our CEO, Nancy, would like to give some of our viewpoint on the new announced government regulations. So, Nancy, go ahead.
spk00: OK. I actually would like to communicate with you about the double-point policy. Is there any impact on our youth science and technology education business? What will these impacts involve? And how does our team view these impacts and take effective strategies? What we know is that the double-point policy was issued on July 24 to reduce the burden on students. 那么这个政策主要是为了 引导所有校外培训机构的活动 能够回归到儿童和青少年的成长规律当中来 要减少家庭和孩子成长过程当中的这种焦虑 So while we're waiting for more questions, let me first introduce how the double reduction policy impacts our adolescent and childhood quality education business
spk07: which part it impacts, how the management of our group see it, and what is our strategy for it. Actually, as you may know, that the double reduction strategy or policy was issued by the central government in China on July 24th. And the goal for this policy is to lower the burden of students and to lower the percentage of off-campus training and education. in order to make sure that the households or parents are not so anxious about their kids' growth.
spk00: So,
spk07: During the implementation of this double reduction policy, this policy basically targets the off-campus curriculum-based education. And within this double reduction policy, it clearly delineated what it means to be curriculum education and non-curriculum education. 那麼體育、藝術和信息技術都隸屬於 For example, sports, arts, and information technology. These are disciplines or subjects that is in the category of non-curriculum-based education, which China or Chinese government encourage kids to take. 我们的同城同美提供的编程和机器人类的 So the product that we provide, for example, information technology education, coding, programming, and robotics, these are curriculums that are non-curriculum-based education off campus that we can provide.
spk00: And as you may know that China has always been trying to nurture more IT talents, technology talents, and innovation talents.
spk07: So this is the focus of China's government for a very long time and continue to go in the future. So the product that we can provide, for example, coding and programming, robotic curriculums, they're all fit national strategy. And during the implementation of the double reduction policy of China, there's also a series of regulations trying to standardize off-campus, non-curriculum-based operations.
spk00: For example, there are regulations about criteria of
spk07: different learning institutions. There are specific standards for the area of those learning sites, as well as standardization on teachers' criteria, standardizations on advertising, learning time, and tuition fees. 我们认为所有的规范都非常有利于整个的校外培训机构长期良好健康的运营,而同中同美
spk00: So as you can see that
spk07: All of the product that we provide or all those standardization regulations and those policies issued by the central government is really beneficial for off-campus education to make it more sustainable, healthy, and long-term. So our product, the childhood and adolescent quality education business meet all of those demands in terms of areas, in terms of teacher criteria, in terms of off-campus learning time, and also we will continue to do that. Our product perfectly match the national policies.
spk00: And in terms of the regulation on off-campus training or off-campus education advertising, actually our major acquisition channel for our products
spk07: is through offline activity and word of mouth. So government regulation has very little impact on our business.
spk00: 我们也将坚决地支持并且执行国家关于收费和资金监管相关方面的政策。 Meanwhile, we will continue to adhere and implement national strategies as well as regulations on tuition fees.
spk07: and financial regulations.
spk00: 虽然三个月和六十课时的这个收费有可能会影响每次客户在成交单次的这个单价。 Even though that regulations about three months and 60 class hours may have a slight impact on the per student per course tuition fees. However, the lowering of price is another incentive because the learning threshold is lowered and there will be more parents try to choose our product. Meanwhile, because of that precondition, our customers, our clients will have a higher demand in terms of product quality and service quality. So that is why we believe in our product, which is the childhood and adolescent quality education business, because
spk07: It is offline. In offline, we provide a mix of different kinds of products with a very high quality service. So this really perfectly match our customer's demand.
spk00: And our management teams will continue to study and learn the double reduction policy in the future.
spk07: in order to improve the quality of our product as well as our service, based on those policy and regulations from the government, in order to give our kids a very good information technology and quality education.
spk00: 虽然双减政策短期影响了一些校外培训机构的数量 Although these double reduction policies do have an impact on the number of off-campus
spk07: learning institutions.
spk00: However, looking long-term, those demands for high-quality service and learning products still remain. So we believe that if a company can continuously provide
spk07: high quality product and service, they will survive and they will thrive in this environment.
spk00: 早在双减政策落地之前, 我们的经营管理团队就坚持做真正有益于孩子的教育产品, 坚持良性的这个商业模型。 And long before the implementation of this double reduction policy of China, our management team has always looked for high quality product and service
spk07: for our kid to help them to better develop in the future, try to form a virtuous cycle.
spk00: Thank you very much for your attention for that. And that concludes my introduction about the double reduction policy and how it impacts our business.
spk07: And we welcome you to raise any kind of questions.
spk04: Certainly. Once again, if you wish to ask a question, please press star 1 on your telephone. We don't have any other questions as of the moment. Percentage, please continue.
spk01: Hi, AJ. If there's no any questions, you can conclude it.
spk04: AJ.
spk01: Hi, AJ.
spk04: Yes, sir. We have no questions at this point of time.
spk06: If there are no more questions, we can end the conference.
spk04: Certainly. Thank you. Ladies and gentlemen, that does conclude our call for today. Thank you for your participation. You may all disconnect now. Thank you all.
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