At present, the online and offline education are both hot and cold: on the one hand, offline education and training institutions are almost shut down, and offline business has suffered a major impact, and the performance is “Waterloo”; Under the call of the government, the online education, which is deeply trapped in the “high cost of acquiring customers and difficult to make profits”, has undertaken a large amount of traffic and is expected to usher in a new opportunity.
Therefore, the K12 leader New Oriental, which has both online and offline business, has drawn much attention. As in previous years, New Oriental Reconciled Future released its latest unaudited performance report.
According to the performance report, New Oriental ’s overall revenue and profits have been improving, with revenue of US $ 923.2 million, a year-on-year increase of 15.88%, and net profit attributable to the mother increased by 41.38% year-on-year. On the other hand, in the good future, there is a phenomenon of increasing income but not increasing profit. Revenue realized US $ 857.7 million, an increase of 18.05% year-on-year, but the net loss attributable to the company was US $ 90.1 million, the largest quarterly loss.
But From the perspective of the capital market, the market value of New Oriental, which has greater revenue and stronger profitability, is far lower than the good future . As of the close of April 30, 2020, the market value of Good Future reached US $ 32.699 billion, while the market value of New Oriental was only US $ 20.147 billion. The market value of Good Future was higher than New Oriental by US $ 12.552 billion.
The reason is that the two target strategies are different from each other: one tends to expand offline, one prefers to exert force online; one is radical, one is stable; A better future with higher growth and stronger Internet attributes is more favored by the capital market.
New Oriental goes down, so the future goes up
New Oriental tends to expand offline.
FY 2020 Q3 ( As of February 29, 2020) New Oriental still continues its strategy of actively expanding offline, with 1,416 offline outlets, an increase of 112 sequentially. In the same period, there were only 871 offline outlets in Good Future, an increase of 77 compared with the previous month. Regardless of the scale or growth rate of online and offline outlets, the future is inferior to New Oriental.
Data source: Snowball (Note: New Oriental outlets are only included in offline teaching middle schools, excluding schools, bookstores, etc.)
Good future preference to force online.
Different from New Oriental ’s strategy for offline expansion, it is better to prefer online business in the future. The most intuitive performance is that the proportion of online business revenue in the future will continue to increase, from 5.2% in Q4 of fiscal 2017 to Q4 in fiscal 2020 (2020 (February 29) 24%, while New Oriental Online ’s business accounted for only 4% in FY2019, which was the same as FY2018.
Data Source: Company Announcement
Online business is the focus of good future strength, and its revenue ratio in Q1 fiscal year 2019 completely overtakes the one-to-one business, becoming the second largest source of revenue for good future.
In the future, incubating chemistry internally in 2008 and thinking of the online school. In 2015, learning from the online school gave up the recording and transformation of the “live broadcast + tutoring” mode to open online large-class class play, and its revenue has remained in the past 3 financial years. Gao Zeng. In FY 2020, Xueersi Online School achieved operating income of 4.323 billion yuan, contributing a good 18.85% of future operating income.
Xueersi Online School adopts the large-class teaching model, and the profit model of the large-class model is better than the small-class model. Therefore, as the future continues to increase the online business, the online business will gradually