Edvantage Group Holdings Limited (“Edvantage Group” or the “Group”, stock code: 0382.HK), the largest private vocational education group in the Greater Bay Area (“GBA”), announced its annual results for the year ended 31 August 2021 (the “Period under Review”). During the Period under Review, the Group operated eight education institutions, namely Guangzhou Huashang College (“Huashang College”) and Guangzhou Huashang Vocational College (“Huashang Vocational College”) in Guangdong province, China; Urban Vocational College of Sichuan (“Urban Vocational College”) and Urban Technician College of Sichuan (“Urban Technician College”) in Sichuan province, China; GBA Business School (“GBABS”) in Hong Kong, China; Global Business College of Australia (“GBCA”) and Edvantage Institute Australia (“EIA”) in Melbourne, Australia; and Edvantage Institute (Singapore)
(“EIS”) in the downtown of Singapore.
Results Highlights (For the year ended 31 August 2021)
— Revenue increased by 56.4% YoY to approx. 1,251.6 million(RMB, the same below);
— Gross profit rose by 59.2% YoY to approx. 630.9 million;
— Adjusted net profit attributable to owners of the Company1 increased by 48.7% YoY to approx. 459.7 million;
— Basic earnings per share increased by 37.5% YoY to 39.42 cents;
— Proposed final dividend per share is HK8.4 cents; Annual dividend payout ratio is 30%;
— Number of student enrolments increased by 74.4% YoY to approx. 61,829.
Note: (1) For the year ended 31 August 2021, adjusted net profit attributable to owners of the Company is determined by adjusting profit for the year of approx. RMB469.7 million for the effect of net foreign exchange loss of approx. RMB25.8 million, share-based payments of approx. RMB20.2 million and profit for the year attributable to non-controlling interests of approx. RMB56.0 million.
During the Period under Review, the Group’s revenue grew by 56.4% year-on-year (“YoY”) to approx. 1,251.6 million; Gross profit increased by 59.2% YoY to approx. 630.9 million; and adjusted net profit attributable to owners of the Company rosed by 48.7% YoY to approx. 459.7 million; Basic earnings per share increased by 37.5% YoY to 39.42 cents; The number of student enrolments increased by 74.4% to approx. 61,829. A final dividend in respect of the year ended 31 August 2021 of HK8.4 cents per share was proposed by the Board of the Group, together with the recognised interim dividend of HK5.5 cents per share, the annual dividend payout ratio is 30%. The Group recorded the best performance since listing, which was mainly attributable to the steady increases in number of students and tuition fees standard derived from original businesses (i.e. Huashang College, Huashang Vocational College, GBCA, EIA and EIS), as well as earnings generated by the newly acquired schools (i.e. Urban Vocational College and Urban Technician College).
Closely Following National Policies to Run Schools
The Group’s Businesses are Strongly encouraged by the New Vocational Education Policy During the Period under Review, the State introduced a number of policies to support and encourage the development of vocational education. In October 2021, the General Office of the CPC Central Committee and the General Office of the State Council released the Guidelines on Promoting the High-quality Development of Modern Vocational Education, clearly supporting and encouraging listed companies and industry leaders to develop vocational education, incentivising application-oriented colleges and universities to develop vocational education at the undergraduate level, quantifying the admission scale of vocational education at the undergraduate level and the vision of basically building a skilled society by 2035. National policies delivered a positive signal to vocational education. The Group’s businesses all fall within the scope of vocational education encouraged by the State. Moreover, the Group’s schools in China are located in the Greater Bay Area and the Chengdu-Chongqing Economic Circle, which are key economic development regions and have the advantages that are conducive to the development of vocational education, including strong economic development momentum, continuous release of dividend from school-age population, low gross enrolment rate of higher education sector and enough room for bargaining power. In conclusion, industrial and regional policies are utterly conducive to the long-term sustainable development of the Group’s businesses.
Adhering to High Quality and High Compliance Distinctive School-running
In terms of teaching faculty, the Group adopted the strategy of “strengthening schools with talents”. It has a leadership team and a team of high-calibre teachers comprising of well-known authoritative experts, including Albert SUN-CHI CHAN, an academician at the Chinese Academy of Sciences, Prof. Jean-Marie Lehn, a laureate of the Nobel Prize in Chemistry. Among the teachers of the Group’s schools in Guangdong province and Sichuan province, nearly 30% have an associate professor title; nearly 55% have a master’s degree or above; and over 100 of them have a doctoral degree. Meanwhile, over 100 teachers and industry experts from well-known universities such as Sun Yat-sen University, Jinan University, Zhongnan University of Economics and Law, Chinese University of Hong Kong, Big Four accounting firms and SenseTime have been introduced flexibly. Besides, in terms of teaching facilities, the Group insists on constructing and rebuilding laboratories year by year with high standards, high configuration and high level, and continues to create a high-standard application-oriented training mode to support practical teaching and cultivate application-oriented high-end talents.
Catering to the Market Needs
Synergistic Development of Trans-discipline and Multi-discipline
The Group enriched its disciplines based on the social and market needs and gradually formed a superior discipline cluster with synergistic development that centres on “new business” and covers “new engineering”, “AI”, “big data”, “digital creativity”, “big health”, “education” and other disciplines. The vocational education business associated with “big health” in high demand for talents developed rapidly, which benefitted from the featured school-running model of “combination of medicine and business” and the complementation of advantages of schools and enterprises for industry-education integration. The scale of students majoring in big health developed rapidly. In terms of academic vocational education, the Group’s schools in Guangdong province and Sichuan province have more than 4,400 students engaged in vocational education associated with “big health”, of which the enrolments of colleges of health and medicine of schools in Guangdong province have seen rapid growth with the number of students increased to more than 1,000 from over 100 in September 2019. As for non-academic vocational education, schools in Guangdong province and Sichuan province set up vocational skill level certificate courses about big health and held various competitions to train and produce more high-level skilled talents in the field of big health.
In-depth Expansion of Industry-education Integration
The Group’s schools have always led the implementation of the philosophy of “school-enterprise cooperation, coordinative education”, having built long-term, stable partnerships with over 700 renowned leading companies successively, including Huawei, Baidu, Kingdee, Sensetime, JD.com and Chengdu Metro. It has developed a constant path of cultivating skilled talents based on ordered classes, industry college co-construction and other cooperations, to establish a comprehensive system containing talent cultivation, scientific research and innovation, experimental base, internship and employment, social services, market brand, etc., which creates win-win results for students, schools, enterprises and the market.
Remarkable Breakthroughs of Domestic and Overseas Schools Operation
During the Period under Review, the Group further expanded its teaching footprint in the Greater Bay Area. It officially inaugurated GBABS in Hong Kong in September 2021, on which it signed a strategic cooperation memorandum of understanding with Guangdong-HK-Macao Greater Bay Area Entrepreneurs Union and Cyberport. GBABS has held events like summits themed on Strategic New Thinking in the Greater Bay Area since its establishment. As a “super bridge” in the future, it will collaborate with more academic institutions and public and private organizations in the Greater Bay Area to gradually offer Executive Certificate/Diploma, Master of Business Administration, Executive MBA and Doctor of Business Administration programs to nurture outstanding leaders and talents for the Greater Bay Area.
In addition, the Group’s Sihui and Xinhui campuses in Guangdong province expanded smoothly. With the two campuses being put into use progressively, there will be considerable room for expansion of the Group’s school-running capacity in the GBA in the future.
International Education is not affected by the Covid-19
High Synergism between Domestic and Overseas Schools
The Group is China’s first private vocational education group to self-establish schools overseas, where it uses asset-light operation model. The Group’s overseas schools not only see steady local operations, the three schools, GBCA, EIA, and EIS, provide academic and non-academic vocational education and are all qualified to enroll local and overseas students. Among them, EIA offers undergraduate and master’s degree courses and is qualified to grant corresponding degrees. Moreover, the Group’s overseas schools have a high degree of integration with schools in China. The Group actively offered online international courses covering both formal and non-academic vocational education levels. It empowered domestic students in language competence, comprehensive abilities, employability and other aspects. The international education services have not been affected by the pandemic. The Group believes that high-quality international teaching services can continuously strengthen its education brands, and thus its bargaining power will be sustainably enhanced.
Education Brand Effect of Edvantage Group is Increasingly Prominent
In terms of further study, in the past two years, nearly 100 graduates of the Group have been enrolled at top 100 famous overseas schools listed on the QS World University Rankings for a master’s or doctoral degree. In terms of employment and entrepreneurship, great achievements have also been obtained in the past five years as nearly 500 graduates of the Group have been employed by Big Four accounting firms, 3,000 by world’s top 500 and China’s top 100 enterprises, and nearly 2,500 by unicorn companies of new economy and various well-known financial institutions. In response to the requirements of higher education development, schools have deeply implemented the policy of mass entrepreneurship and innovation, established a secondary college of innovation and entrepreneurship and the Huashang mass entrepreneurship incubation base, held various innovation and entrepreneurship competitions and offered relevant training. Graduates of the past five years have initiated many quality companies, and won many awards in national and provincial innovation and entrepreneurship competitions.
The Group’s schools have repeatedly made breakthroughs in terms of school-running achievements. Among them, it is worth mentioning that in May 2021, Huashang College was approved as a master’s degree conferring institution, becoming one of the first eight private colleges in Guangdong province to be such institution. In recent two years, Huashang Vocational College has made breakthroughs in both quality and scale, and its enrolment and further study rate are far ahead of private undergraduate colleges in Guangdong province. Urban Vocational College ranked No.1 in Sichuan province in the 2020 China Private Higher Vocational College Comprehensive Strength Ranking, and was one of the higher vocational colleges planned to be upgraded to an undergraduate university during the “13th Five-Year” Plan period, which shows superior school-running condition. Urban Technician College saw a significant growth in enrolment due to the smooth degree upgrading channel and broad employment prospects. It has been highly recognised by both parents and students.
Development Strategy and Target
Since it ran schools, the Group has been closely following the national policies, catering to market needs, and adhering to the principle of school operations with high compliance and high quality. Brand strategy, talent strategy and M&A strategy are three top-priority strategies for development. The Group will constantly develop its academic vocational education and non-academic vocational education businesses through organic growth and external expansion, and asset-light and asset-heavy operations to achieve sustained, steady and high-quality development. In addition, the Group’s schools will cooperate with leading enterprises in various industries to establish high-quality, market-demand-oriented industrial schools, a vocational education league or a vocational education group, thereby creating sustainable value for its shareholders.
About Edvantage Group Holdings Limited
Edvantage Group Holdings Limited (“Edvantage Group” or the “Group”, stock code: 0382.HK) is the largest private higher education group in the Guangdong-Hong Kong-Macao Greater Bay Area (the “Greater Bay Area”) and an early mover in education sector in pursuing international expansion, and it was listed on the Main Board of the Stock Exchange on 16 July 2019. As of 31 August 2021, the Group had nearly 62,000 students in schools and owns a total of 8 private education institutions, namely Guangzhou Huashang College (application-oriented undergraduate education) and Guangzhou Huashang Vocational College (higher academic vocational education) in Guangdong province, China; Urban Vocational College of Sichuan (higher academic vocational education) and Urban Technician College of Sichuan (secondary academic vocational education) in Sichuan province, China; GBA Business School (GBABS) in Hong Kong, China; Global Business College of Australia (GBCA) and Edvantage Institute Australia (EIA) in Melbourne, Australia; and Edvantage Institute (Singapore) (“EIS”) in the downtown of Singapore.
Topic: Press release summary