Sunlands Technology Group ADR

Ladies and gentlemen, thank you for standing by and welcome to Sunderland's First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host today, Yu Hua, Sunderland's IR Representative. Please go ahead.

Hello, everyone, and thank you for joining Sunland's first quarter 2025 earnings conference call. The company's financial and operating results were issued in our press release by Newswire Services earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting our IR website. Participants on today's call will be our CEO, Mr. Tungbo Liu, and our financial director, Mr. Hongyu Li. 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 some safe harbor statements in relation to today's call. We set first 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 invoke 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 authorities, please refer to the company's filings with the Securities and Exchange Commission. With that, I'll now turn the call over to our CEO, Peng Bo Liu.

Thank you, Yu Hua. Hello, everyone. Welcome to Sunland's first quarter 2035 earnings conference call. Prior to commencing, I would like to kindly remind all attendees that the financial information referenced in this release is presented on a continuing operation basis, and all figures are denominated in RMB unless explicitly specified otherwise. In the first quarter of 2005, we reported net revenue of RMB 487.6 million and net income of RMB 75.2 million, marking our 16th consecutive profitable quarter, now encouraging start to the year that reinforces our confidence in delivering sustained growth throughout 2025. While the revenue remained relatively stable, our continued profitability and disciplined execution reflect the underlying resilience of our business model. This income margin reached 15.4% supported by effective cost optimization and ongoing operational efficiency improvements. Meanwhile, our financial fundamentals remain robust. This quarter marks our seventh consecutive period of positive operating cash flow, underpinned by sound execution and prudent capital management. Looking ahead, we will continue to refine our business mix, concentrating on high margin high potential areas to reinforce structural flexibility and long-term resilience. On the product front, we continue to deepen and diversify our course portfolio. We refine our core subject areas while extending into adjacent domains such as wellness and lifestyle, relying with increasing diverse needs of lifelong learners. Driven by our course diversification strategy, This quarter's total enrollment reached over 179,000, also supported by meaningful improvements in learner engagement and retention. Technology also remains central to our strategy. This quarter, we further advanced the digital transformation of cooperation by embedding AI tools that enhance curriculum precision and boost learner engagement. Now, let's turn to the performers of each of our major course programs. In the first quarter of 2005, degree and diploma-focused post-secondary programs contributed 9.7% of total revenue. This sector has experienced a moderated trajectory and our celebrated scale-back in investments has allowed us to relocate resources toward high growth opportunities more effectively. Going forward, we will continue to monitor micro-education trends and demographic shifts closely, ensuring our approach remains agile and responsive to evolving conditions. The sector encompassing interest-based programs, professional skills development, and professional certification preparation accounted for a substantial 78.2% of our total revenue. With interest-driven courses emerging as a fundamental pillar, unlocking the full potential of interest-learned learning among middle-aged and senior learners remains a central strategic priority. In this area, we have remained steadfast in pursuing a clear future-oriented strategy rooted in openness, integration, and innovation, while deepening our initiatives across multiple fronts. First, we have embraced a partnership-driven approach to amplify value creation. As China's aging population expands, The senior consumer market is drawing increased participation from diverse industries, including consumer brands, health care service providers, and traditional media. This convergence presents significant opportunities for core sector collaboration. Following last year's successful partnership with Beijing TV, we established a new cooperation with Hunan TV's Happy shopping platform this quarter, leveraging its broad consumer reach and brand influence. Second, we have further strengthened our hybrid delivery model to meet the evolving needs of older learners. For this demographic, education is not only about acquiring knowledge, it is equally about social participation and emotional fulfillment. To address this need, we have adopted primarily online supplemented by offline hybrid model that offers both flexibility and depth. This model has proven especially effective in boosting learner retention and satisfaction. Notably, our creative study tour with integrated education content with cultural travel has been particularly well received for their immersive and differentiated value. At the same time, we are deepening our core sector collaboration by partnering with galleries and museums to develop cultural resultant experiences, further strengthening engagement within the senior segment. Third, we have refined our curriculum design with a self-developed access framework, which is answer, comment, supervisor, and study to fuel ongoing growth and ensure learner success. This dual teacher model, while pairs academic mentors and learning facilitators, makes our courses more accessible, engaging, and outcome-driven. Leveraging this collaborative learning system, we have attended a 98% course competition rate among new students and a 14% increase in knowledge retention, scoring its effectiveness in delivering substantial educational outcomes. Beyond academic innovation, social mission remains integral to our strategy. Each year, we organize nearly 100 free public interest activities, ensure elderly individuals with cultural or intellectual operations can access meaningful learning experiences. We view this not only as an expression of corporate responsibility, but as a long-term investment in brand trust and mission Recent policy developments further reinforced our confidence. This government's focus on stimulating domestic consumption and expanding service-oriented sectors, including cultural, tourism, and education, align closely with our strategic direction. Targeted initiatives and physical incentives for innovation in community-based and lifelong learning programs affirmed that we are operating in the right space at the right time with ample room to scale, lead, and grow. Together, these efforts reflect our holistic and forward-looking approach to lifelong learning. Today's adult learners are increasingly valued second-premium, immersive, and social-engaging experiences. This shift affirms our early position and highlights the long-term potential of adult learning economy. Moving forward, we will continue enhancing our offerings, strengthening ecosystem integration and deeper engagement, ensuring we remain well-positioned to lead this evolving sector. While macroeconomic and geopolitical uncertainties persist, the impact on our business has been limited, given our domestic focus. Nonetheless, we remain vigilant, proactively managing risks, while staying alert to new opportunities. Looking ahead, we will continue strengthening our core capabilities, expanding our core offerings, embracing internet the focus on value creation. We are confident this approach will deliver sustainable long-term returns for shareholders and meaningful learning outcomes for our students. This concludes my prepared remarks. With that, I will turn the call to our financial director to run through our financials.