Sunlands Technology Group ADR

Gentlemen, thank you for standing by, and welcome to Sunland's second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After prepared remarks by the management team, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to your host today, Yuhua Yi, Sunland's IR representative. Please go ahead.

Hello, everyone, and thank you for joining Sunland's second quarter 2021 earnings conference call. The company's financial and operating results were issued in our press release via Newswire services earlier today and are posted online. You can download The earnings press will leave and sign up for our distribution list by visiting our IR website. Participants on today's call will be our CEO, Mr. Tong Bo Liu, and our CFO, Selena Lu Liu. Management will begin with prepared remarks, and the call will conclude with a Q&A session. Before I hand it over to the management, I'd like to remind you of Sunland Safe Harbor's statements in relation to today's call, except for the historical information contained herein. Certain of the matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates, and projections. and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. For more information about the potential risks and uncertainties, please refer to the company's filing with the Securities and Exchange Commission. With that, I would now like to turn the call over to our CEO, Tongbo Liu.

Thank you, Yu Hua. Hello, everyone, and thank you for joining Sunland's second quarter 2021 earnings conference call. We are pleased with our second quarter performers. Our net revenue grew 22.8% year-over-year to RMB 629.5 million. with master's degree-oriented programs and professional certification and skills programs, achieving a year-over-year increase of 91.7% and 84.6% respectively. New enrollments remained relatively stable at over 86,000, representing a 4.8% year-over-year increase. which was primarily driven by our 168.7% year-over-year increase from professional certification and skills programs. Following a strategic adjustment to optimize our product mix while seeking growth and balancing costs and profitability, our growth buildings were IMB for $13.2 million, compared with RMB 531.5 for the same period of 2020. Our strategic adjustment and ongoing cost reduction efforts delivered a regular net profit of RMB 22.1 million compared with net loss of RMB 126.1 million in the second quarter of 2020. We experienced increased demand for hydro-integration and professional certification and skills programs during the second quarter of 2021. The employment market is becoming increasingly competitive due to industrial restructuring in the wake of COVID-19 pandemic, motivating workers to enhance their career competitiveness through occupational education. While working professionals often pursue higher education through our STE or master's degree programs, many end-users also seek to improve their skills and enrich their lives with our professional skills and general interest courses. With such steady tailwinds, we increased our efforts to enrich our course offerings and improve the quality of our programs, which helped sustain the growth momentum in master's degree oriented programs. and professional certification and skills programs. Skills building for master's degree-oriented programs increased by 23.7% year-over-year. This exceptional performance was driven by our successful degree-oriented programs within China, as well as our growing cooperation with higher education institutions in other global regions. We continue to provide high-quality tailored courses to prepare working professionals in China for MBA entrance examinations. Most of the students are middle or senior level managers who are financially stable and willing to pay for further education. We stimulously enlarged our footprint by promoting overseas higher education, supported by our expanding cooperation with foreign institutions. We also diversified our overseas post-graduate degree offerings including MBA in education, psychology, and in human resource management. Meanwhile, our professional certification and skills programs also grow vigorously evidenced by a 168.7% year-over-year increase in new enrollments and a 196.2% year-over-year increase in gross billing for the quarter. This course was primarily driven by our extensive course offerings, which allow us to meet demand across a wide range of subjects, coupled with increasing demand for courses to enhance career competitiveness or cultivate soft skills and hobbies. While we strengthened our competitiveness in master's degree-oriented programs, and the professional certification and the skills programs. We also continue to provide high quality courses in ST programs to our students. Over our 18 years experience in end of occupational education, we have cultivated a high brand awareness and developed exceptional course teaching frameworks. effective teaching methods, and a wide variety of premium courses catering to students' different needs. Sunland is committed to developing more premium courses and delivering a better reading experience to the most end-usely learning targets to complement our course improvement efforts. We are also working to upgrade our online learning platform to make courses more easily accessible to our students. many of whom work full-time or have other time constraints. Additionally, we have expanded our user base by providing staff training services to companies across a wide variety of industries. We believe this will further increase our market penetration rates and reduce our customer acquisition costs. We believe that the depth and quality of our learning resources, our efficient learning platform and cost framework and our highly effective professional teaching staff set us apart from our competitors. We are excited to see that our brand is regarded highly by our students as reflected by their satisfaction rate of 98.73% in the second quarter. We will continue to strengthen our leading position in the industry by developing more refined courses in a broader area of subjects while enhancing our service quality with additional first-class teachers. Now turning to a recent circular published by the Ministry of Education pertaining to the end-of-education and training industry on 19th of July, which studies social organizations and the private entities in end-of-education business. have played a positive role in the promoting lifelong learning society. Followed by some guidelines for industry standardization, SunLens has always been committed to complying with applicable laws and regulations. And we believe these guidelines will give industry leaders such as SunLens an advantage, giving our existing strict standards and comprehensive internal review process. Going forward, We will remain committed to designing high-quality courses and creating innovative, effective, internet and platform-based learning tools in collaboration with our outstanding academic research team and teaching staff. Given Sunland's secure foothold in the end-of-education business, we are confident we can continue to offer premium courses in STE programs and solidify our market share. in the master's degree-oriented and the professional skills programs space. With that, we will be well-positioned to continue to deliver strong results in future quarters. That concludes my prepared remarks. Thank you, and I will turn the call over to our staffer, Selina, for further review of our financials. Selina, please.