News

China Chuanglian Education Financial achieved profit turnaround in 2018; Income from Financial Services surges over 160%

Financial Highlights

 

 

 

 

Year ended 31 December

RMB'000

2018

2017

Change

Turnover

152,084

134,022

+13.5%

?Educational consultancy and online training and

education services

 

131,471

 

117,933

 

+11.5%

?On-site training services

11,091

8,211

+35.1%

?Financial services

9,522

3,625

+162.7%

?Gross proceeds from sales of held for trading investments

?

4,253

N/A

Gross profit

82,412

73,748

+11.7%

Profit (loss) for the year

6,232

(14,840)

N/A

Adjusted profit (loss) for the year*

13,092

(6,337)

N/A

Profit (loss) attributable to
owners of the Company

7,588

(15,232)

N/A

Adjusted profit (loss) attributable to owners of the Company*

14,448

(6,729)

N/A

Basic earnings (loss) per share (RMB cents)

0.15

(0.33)

N/A

Adjusted basic earnings (loss) per share (RMB
cents)
*

0.29

(0.14)

N/A

 

 

 

 

* Adjusted financial information refers to activities for the year
excluding share-based payments and impairment losses charged/reversed.

HONG KONG, CHINA - Media
OutReach
 - 29 March
2019 - China Chuanglian Education Financial Group
Limited
(HKEx stock code: 2371.HK, the "Group") announced its
annual results and financial position. For the year ended 31 December
2018, the Group recorded a turnover of approximately RMB152.1 million (2017:
approximately RMB134.0 million), representing an increase of 13.5% as compared
to the last corresponding period. During the year, the Group recorded a
turnaround to profit attributable to owners of the Company of approximately RMB7.6
million, (2017: loss attributable to owners of the Company of approximately
RMB15.2 million).

 

The basic earnings per share for the year
were approximately 0.15 RMB cents (2017: basic loss per share of approximately
0.33 RMB cents).

Business
Review

Educational
consultancy and online training and education services

The Group is principally engaged in the
provision of the online training and education services in 
the PRC. Being one of the very few
pioneers of online education providers in the PRC, the Group mainly provides
vocational training in relation to job adaption and skill enhancement to civil
servants and professional technical personnel, such as lawyers, accountants,
doctors, teachers, etc., in the PRC. The current population of civil servants
and professional technical personnel in the PRC is over 84 million. There are
certain requirements under the PRC laws and relevant provisions that, civil
servants and professional technical personnel in the PRC are required to
undertake an annual required minimum continuing professional training in both
public required subjects and relevant professional subjects in order to satisfy
their corresponding job requirements and professional development needs.

 

The Group is currently providing online
training and education services to its users through internet and
telecommunication networks. The Group is operating over 130 online training and
education platforms and a mobile terminal learning platform, Rongxue App* (
??App). Currently, the Group
has over 5 million of paid users. Since the launch of Rongxue App in 2016, its
registered users have increased rapidly to nearly 3 million in the current
year.

 

During the year, the Group continued to
expand online training and education business to more geographical areas in the
PRC. The Group's online training and education business currently covers 18 provinces,
autonomous regions and municipalities as well as 40 cities in the PRC.

 

In addition to the domestic training and
education business, the Group commenced its international training and
education business during the year. The Group introduced a high quality
international curriculum "Innovation Entrepreneurship" program from a
professional development center of a prestige American university to the higher
education institutions in the PRC. The Group believes that the "Innovation
Entrepreneurship" program can help to enhance the creativity and forward
looking capability of the young people in the PRC.

 

Financial
Services

Leveraging on the accurate big data
accumulated from the online training, the Group has taken 
certain steps to expand into financial
services business. The Group is one of the promotors of Xinmei Mutual Life Insurance Agency* ("Xinmei
Mutua"), the first mutual life insurance agency in the PRC, which launched its
formal insurance products in 2017.

 

In addition, the Group has acquired
Beijing Zhongjin Insurance Brokerage Limited* ("Beijing Zhongjin") and Well
Tunes Financial Group Limited ("Well Tunes") in 2017 in order to act as agent
of the insurance products from Xinmei Mutal and other insurance companies. The
insurance brokerage business achieved a significant progress and recording a
revenue of approximately RMB9.5 million for the Reporting Period.

 

In order to complete the layout of our
financial services business, the Group completed the acquisition of the entire
equity interest in Premier Management Limited ("Premier Management") in
September 2018. Premier Management is a corporation licensed under the
Securities and Futures Ordinance to conduct type 1 (Dealing in Securities), 4
(Advising on Securities) and 9 (Asset Management) regulated activities. Such
acquisition would enable the Group to provide more all rounded financial
services to our potential customers inherited from our online education and training
business.

Future Plans

Over the past few years, the Group's
online training and education business has gradually increased its geographical
coverage in the PRC. In the coming years, the Group will continue to expand its
geographical coverage to new business areas and promote the online training and
education penetration rate in the existing business areas.

 

In addition to the business-to-business
model the Group has adopted over the past few years, the Group intends to allot
more resources in developing the business-to-consumer model in the foreseeable
future in order to increase the consumers' adherence and loyalty to training
and education platforms.

 

Furthermore, the Group plans to launch
its online to offline model ("O to O") whenever it is desirable so that customers
can enjoy the convenience of selecting and paying for the suitable training
courses online as well as enjoying the better post-sales servicing and
interaction with local offices and staff.

 

In addition to the existing training
center in Nanning of Guangxi Zhuang Autonomous Region, another new training
center in Chengdu of Sichuan Province is expected to commercially launch in
2019 which would give the Group more capability to accommodate the increasing
need of O to O training. Also, the increase of O to O training can also help to
increase the average revenue per user in the future.

 

After the launch of international
training and education business with the "Innovation Entrepreneurship" program,
the Group will seek to increase co-operation with more foreign reputable education
institution to provide other programs of high quality international curriculum
to suit the different needs and requirements of the different profession in the
PRC. The Group believes the introduction of more high quality international
curriculum to the PRC market can help to improve the overall quality of
education in the PRC as well as the international vision of the professionals
in the PRC.

 

In the coming future, the Group is
planning to establish local offices of insurance brokerage business in major
cities in the PRC in order to capture the nationwide demand for insurance
products and provide high quality post-sales services to the customers. Apart
from insurance related business, the Group has taken steps to enter into the securities
trading and asset management business to further satisfy the potential
financial needs of customers. The Group believes that the potential of
financial services business is huge, given possession of huge amount of
occupation-specific data which can help to conduct comprehensive analysis of unique
needs and requirements of customers.

 

The Group believes that it is able to
benefit from the huge amount of accurate data accumulated from training and education
business to further develop its financial services business in the foreseeable
future.

About China Chuanglian Education Financial Group Limited

China Chuanglian Education Financial (2371.HK) is
principally engaged in the provision of the online training and education
services in the PRC. It focuses on vocational education and continuing
education, and provides massive online and offline training services to civil
servants and professional technical personnel. Currently,
the Group's online training and education business
covers 18 provinces, autonomous regions and municipalities as well as 40 cities
in the PRC.
It has
over 5 million of paid users. Since the
launch of Rongxue App in 2016, its registered users have
increased rapidly to nearly 3 million in the
current year.

 

Meanwhile, leveraging on the accurate big data
accumulated from the online training, the Group has taken certain steps to
expand into the financial business. In 2016, the Group has become one of the
nine promotors of Xinmei Mutual Life Insurance Agency.
The Group has also acquired insurance brokerage companies
as well as securities and
asset management companies
in the PRC and Hong
Kong.

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