Fighting the 100 billion educational track, who is going to run fast in the future?
Editor’s note: This article is from WeChat public account “like Sany” (ID: Xiangsanyi007), author Yang Yan.
On October 29th, a news-exploding education industry was caught off guard.
According to the public letter “Latepost” jointly released by Caijing magazine and Xiaoyue team, Zhang Bangxin, founder of Good Future (NYSE: TAL), said at the executive meeting: “The net school could have made a profit this year, but we A strategic loss was chosen.”
At the same time, the future of the network school business unit is thinking about product line compression and personnel optimization, because the renewal rate is not up to standard, some subjects have been eliminated by nearly half of the teachers.
This summer, good future, 猿 counseling, homework and other education companies set off an online “pull” battle with a daily marketing fee of 10 million yuan. According to a good future financial report, the school-study revenue of Xuesisi Online increased by 88% (USD)/94% (RMB), and the number of long-term regular-price courses increased by 134%, about 1.4 million.
The importance of teachers for the expansion of k12 teaching and auxiliary business is not necessary. The number of students has soared and the teachers have been abolished. What is the sale?
Before the press release, in response to the above information, the relevant responsible person in the future responded to the investment education and said that it was “untrue news”.
Save money to “buy” users, and the net profit is continuously lost. Is this account worthless?
“The online school can make a profit but the strategic loss” is true or false. It remains to be seen. However, the input and benefits of online education are indeed good topics that cannot be avoided in the past six months.
Under the market expectation, in the future of the 2020 fiscal year Q2 financial report released in the future, its sales and marketing expenses are still rising, from 73 million in the second quarter of 2019, increase by 73.5% to 263 million US dollars. .
The soaring marketing expenses have really dragged down the “good-looking” level of earnings. From June 1st, 2019 to August 31st, good future operating income was 937 million US dollars, up 33.8% year-on-year, higher than Q1 growth of 27.6%. However, its net profit loss is still expanding, and net profit loss is realized this quarter. 14.4 millionThe US dollar fell by 118.7% year-on-year.
As far as financial reports are concerned, the good future has shown a net profit loss for two consecutive quarters.
This quarter’s online business contributed 16% of total revenue and 40% of normal long-term total enrollment, while in the same period last year, online business accounted for only 12% of total revenue and 26% of normal long-term total enrollment.
In the conference call, Good Future Chief Financial Officer Luo Wei has no doubt that the online business is still at a loss, and the profitability is far worse than the company’s Peiyou small class business, with the rapid increase in the proportion of online business revenue, the company as a whole The profit side will be under pressure.
Seeking a healthy and sustainable growth rate is also a high-frequency vocabulary in this conference call. Luo Yi once proposed to maintain the 3-digit growth rate of online business. However, this quarter, according to the RMB exchange rate, the school’s revenue increased by 94% year-on-year, which was slower than the 122% in the first quarter.
Good future The financial report released on the day of the quarter, the stock opened 8% higher, as of the close of the stock price rose 13.05%, a record high in 2019. For this education market leader online education “saving money” move, investors are clearly highly recognized.
Marketing expenses only increased by 1.9%. Why is New Oriental so calm?
It is also one of the billions of market capitalists in the education industry. The “big brother” New Oriental (NYSE: EDU) financial report is another logical growth model.
This summer’s “k12 online school war” was provoked by counseling in May, and the first echelon education company, such as the future, homework, and so on, quickly followed up. Zhang Bangxin, who was originally preparing to study abroad, personally took the seat, focusing on the online school business. . According to media reports, the summer investment of the entire industry is about 4 billion, of which nearly 1/4 of the future investment.
In a “war”, New Oriental appears to be a Buddhist system. According to its recently announced 2020Q1 financial report, as of August 31, New Oriental sales and marketing expenses were $101.2 million, a year-on-year increase of only 1.9%. In terms of the market value of New Oriental and the good future, this figure can be said to be extremely restrained.
New Oriental Chief Financial Officer Yang Zhihui stressed in a conference call that New Oriental will continue to focus on expanding its offline business, with the goal of increasing capacity by approximately 20% in FY 2020. For the advancement of online business, New Oriental hopes to spend reasonable marketing expenses instead of makingUse the method of burning money to get users.
In the second half of the year, New Oriental will open more learning centers.
When many companies are betting on the line, New Oriental’s emphasis on offline is evident.
The general manager of the marketing department of New Oriental Group, Lin Rongfeng, mentioned in a recent media conversation that compared with the harvesting traffic of Internet games, New Oriental is more willing to build a “fish pond” to do market education and user cultivation. At present, there are about two or three thousand self-media accounts and communities in which New Oriental officially manages. For the low-cost entrance class that the industry is doing, Lin Rongfeng even feels that this form can be eliminated and returned to the essence of education. Judging from the overall trend of the current education market, this is obviously a very important style of play.
In the quarterly earnings report, New Oriental achieved operating income of US$1.072 billion. According to the RMB exchange rate, it increased by 30% year-on-year, and net income was US$210 million, a year-on-year increase of 69.6%. The conference call mentioned that enrollment is the main driver of New Oriental income growth. Dividing the business situation, the number of K12 business is about 30-35% year-on-year, which is an important growth engine.
The scripts in the capital market are always “shocking”. After New Oriental announced its earnings report, the stock price opened more than 2%, which changed its face. The stock closed down 7.02% on the day, creating the biggest one-day drop in New Oriental in the past year. .
For the good future of “successful triumphant”, along with the huge marketing expenses, in addition to the growing number of students, there are also requirements for teachers and teaching service capabilities, which is impossible for capital to come at a glance.
For the New Oriental who wants to build a “fish pond”, the expectation of big fish and big fish, the accumulation of time in the middle, in the face of the rear-looking education brand, how to sit firmly on the Diaoyutai, is to test the actual operation of the big brother It is.