The land education in a single quarter is over the whole year. Is there still imagination for studying abroad agencies?

Picture source: Oriental IC

Recently, the Earth Education released the first quarter of performance reports. In the first quarter of fiscal year in fiscal year, the loss of HK $ 6.547 million, an increase of 153.66%year -on -year, exceeding the annual losses of more than 2022 fiscal year.

Weak revenue, continuous losses, poor cost control ... How to go in the next step in the Earth Education of Vegan Valley?

The loss in the single quarter is over the whole year

The financial report shows that the land education in the first quarter of fiscal year in 2023 only achieved a revenue of HK $ 2.194 million, a slight increase of 7.87%year -on -year. The main reason for income during the period is BNO (that is:: British National Overseas Passport) holders benefited from preferential entry policies, and the number of students immigration to the UK increased, bringing the commission income that students generated in the UK to enhance their studies. 1.7 million Hong Kong dollars. But in addition, Q1 commissions from Australia, Canada and the United States have decreased year -on -year.

Although the income of earth education has increased slightly during the reporting period, this growth is mainly caused by the British preferential entry policy, which has nothing to do with the company's main business development. Instead, due to the comprehensive impact of other revenue, employee welfare expenditures and other increased expenses, the loss of 6.547 million Hong Kong dollars in the first quarter of fiscal year in fiscal 2023, an increase of 153.66%year -on -year, or even more than the full year of fiscal year in fiscal 2022.

Following a loss in fiscal year in 2022, the company's performance has not reversed. Regarding the previous losses, Earth Education also mentioned the impact of decreased other income and increased cost increases. Specifically, the Q1 company in fiscal year in 2023 realized other revenue of HK $ 736,000, a year -on -year decrease of 8.46%. The reason for the decline was that there was no recording of the fair value of financial assets during the period.

The financial report shows that other income consists of government subsidies, administrative fee income, dividend income, etc., and has long occupied an important position in the composition of income. In the Q1 of 2023, other revenue contributed more than 30%of the total revenue. In the same period last year, the revenue accounted for nearly 40%of the total revenue. The reduction of other income has indeed brought adverse effects on the company's income, but the income of earth education relying on government subsidies and financial assets such as non -main business, which seems to to some extent that the company's income structure is unreasonable to a certain extent. question.

In the case where income is not optimistic, Earth Education has failed to control expenditure, especially other expenses. In the first quarter of fiscal year in fiscal 2023, other expenses increased sharply by 156.52%year -on -year to HK $ 5.887 million, which was an important reason for performance loss. The company said in the financial report that the main reason for other expenditure growth was the loss of the fair value of financial assets about HK $ 1.8 million during the period and the net exchange loss approximately HK $ 2.2 million. These two items were lost by 4 million Hong Kong dollars, while the annual land education in fiscal 2022 only lost 4.552 million Hong Kong dollars. Coupled with the growth of marketing costs and employee welfare expenditures, the profit end of Earth Education has undoubtedly suffered greater pressure.

In terms of cash, although the cash situation of earth education has not been disclosed in the first quarter, as of March 31, 2022, the company's cash and cash equivalents were only 61.94 million Hong Kong dollars. Under the continued loss, the company's cash flow was not easy. The main business creates weakness, inadequate expenditure control, and a single quarter of the whole year ... Education on the edge of the cliff, enter and retreat.

Will the mainland market be a new opportunity?

In the crisis, the earth education seems to see the mainland study agency market as "life -saving straw". The first quarter report revealed that the company's center of education consulting services in Guangzhou has opened, and it is expected to bring a new source of income. According to the company's past announcement, the center should operate at Shijin (Guangzhou) Education Consulting Co., Ltd..

Shijin (Guangzhou) Education was established in 2020, and changed its business scope in January 2022. It was newly added to study abroad to study abroad. In the third quarter report of FY2022, the main reason for the increase in employee welfare expenditures was that the business operations of China Time (Guangzhou) business were reserved. The first quarterly report of the 2023 fiscal year also specifically pointed out that employee welfare expenditures increased slightly year -on -year. One reason was that reserved employees in mainland business caused increased salaries.

It seems that land education is continuously invested and stepped on the mainland business. But it is worth noting that this is not the first time it has developed the mainland market. In 2018, Dadi Education had priced at 800,000 yuan to acquire 51%equity of Holgosda Meijia. Service cooperation agreement. However, in 2019, because of the poor financial performance of Holgosda Meijia, the company decided to sell its own equity. In 2019, it was the hotness of studying abroad. At that time, the mainland market was not opened. Can it be opened now?

However, compared with ambitious ambitions, the earth education is more helpless to develop the mainland market. On the one hand, the Hong Kong study abroad market is basically saturated, and there will be no large -scale outbreaks in a short period of time. In 2015, Dadi Education ranked sixth in Hong Kong's study abroad agency industry with a market share of 7.6%. The company's market position is not prominent, but the Hong Kong market is also highly concentrated. The share of the top six market participants is as high as 81%, leaving the space for earth education to play too limited. If it is stubborn in the Hong Kong market, the company's development will quickly touch the ceiling.

On the other hand, affected by the epidemic, some students changed their ideas for overseas studies, and the Hong Kong study abroad market competition was even more intense. In contrast to it, even if the epidemic impact decreased, the size of the Chinese study agency market in 2020 still has 4.5 billion yuan. For earth education, the development of the mainland market is no longer a choice. With a successive loss, whether its business in Guangzhou can succeed is directly related to the company's future imagination space. However, the mainland study agency market is not "golden everywhere", there are many players in the broad market, and the old -fashioned institutions have been cultivating for many years. As of now, Dadi Education has not disclosed the income of Guangzhou's business. In the first quarter of the Guangzhou Education Consulting Center, the transcript handed in the company may not be ideal. Therefore, whether the mainland business can become a new business curve for land education seems to need a certain time to verify.

Keep the light

The predicament of earth education is not a case, and it is a microcosm of the general difficulty of studying abroad agencies under the epidemic. For example, international education technology, which is also engaged in overseas education consultants, has also been frequently obstructed. Recently, the IPO is interrupted again due to the failure of the prospectus. In the face of the repeated epidemic and limited -scale study abroad intermediary agencies, it can only be hoped that some countries will relax the application restrictions on studying abroad, which will bring about income of commission income in a certain business sector.

In "main risks and uncertain factors", earth education once again mentioned the impact of the epidemic. On the one hand, Hong Kong's financial and business environment has not fully recovered. On the other hand, representatives of overseas universities and universities are still hesitating whether to enroll and interview Hong Kong. Management also believes that the impact of the epidemic on the company will depend on the policies and entry quarantine isolation system adopted by multiple countries to control the epidemic.

In the ups and downs of the industry and the industry, there are not many anti -risk measures that Earth Education can take. At this time, compared with the development of the mainland market, more effective cost reduction measures may also be considered. For example, the sales and marketing expenditures of international education technology in 2020 have been cut from HK $ 12.96 million to HK $ 5.09 million, which objectively helped it maintain a stable profit level. When the business imagination space is limited, the "survival" may be more realistic for the land education.

At present, the ice of the study abroad track also melted. With the continuous development of vaccine and new crown special drugs, new progress has been made, and many countries have launched a large -scale vaccination plan, and some countries relax the control measures of epidemic conditions. Exchanges between the country and the country, including education, are restoring diversity. In early 2021, the British announced the new international education strategy that China will be an important regional market in the promotion of British overseas education, which is expected to make more students consider using Britain as a place to choose from.

In addition, the Prospective Industry Research Institute predicts that the Chinese study abroad service industry was in a period of ease development in 2021-2023, but began to grow at high speed in 2024, and then increased by about 13%. The market size will be close to 600 billion yuan.

In the turbulent environment, it is both full of uncertainty and may also have opportunities. In the among them, the land education in the mainland market is constantly seeking losses. Can you wait until the industry will go out of the trough?

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