Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | RISE Education Cayman Ltd |
Entity Central Index Key | 1,712,178 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Trading Symbol | REDU |
Entity Common Stock, Shares Outstanding | 110,000,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 1,055,982 | $ 162,301 | ¥ 639,999 |
Restricted cash | 28,913 | 4,444 | 16,689 |
Accounts receivable, net | 2,470 | 380 | 0 |
Amounts due from a related party | 6,604 | 1,015 | 0 |
Inventories | 7,905 | 1,215 | 5,533 |
Prepayments and other current assets | 40,571 | 6,236 | 45,517 |
Total current assets | 1,142,445 | 175,591 | 707,738 |
Non-current assets: | |||
Property and equipment, net | 100,177 | 15,397 | 75,673 |
Intangible assets, net | 200,615 | 30,834 | 225,951 |
Goodwill | 475,732 | 73,119 | 461,686 |
Deferred tax assets | 2,404 | 369 | 4,087 |
Other non-current assets | 34,965 | 5,374 | 25,163 |
Total non-current assets | 813,893 | 125,093 | 792,560 |
Total assets | 1,956,338 | 300,684 | 1,500,298 |
Current liabilities | |||
Current portion of long-term loan | 0 | 0 | 38,186 |
Accounts payable | 6,041 | 928 | 4,068 |
Accrued expenses and other current liabilities | 171,099 | 26,298 | 96,158 |
Deferred revenue and customer advances | 812,821 | 124,928 | 601,324 |
Due to a related party | 20,000 | 3,074 | 0 |
Income taxes payable | 20,739 | 3,188 | 23,630 |
Total current liabilities | 1,030,700 | 158,416 | 763,366 |
Non-current liabilities | |||
Long-term loan | 623,439 | 95,821 | 333,102 |
Deferred tax liabilities | 3,785 | 582 | 3,070 |
Other non-current liabilities | 2,682 | 412 | 2,333 |
Total non-current liabilities | 629,906 | 96,815 | 338,505 |
Total liabilities | 1,660,606 | 255,231 | 1,101,871 |
Commitments and contingencies | |||
Shareholders' equity: | |||
Ordinary shares (US$0.01 par value; 200,000,000 and 200,000,000 shares authorized, 100,000,000 and 110,000,000 shares issued and outstanding as of December 31, 2016 and 2017, respectively) | 6,782 | 1,042 | 6,120 |
Additional paid-in capital | 532,474 | 81,840 | 452,369 |
Statutory reserves | 46,366 | 7,126 | 32,511 |
Accumulated deficit | (315,531) | (48,496) | (134,264) |
Accumulated other comprehensive income | 40,040 | 6,154 | 50,464 |
Total RISE Education Cayman Ltd shareholders’ equity | 310,131 | 47,666 | 407,200 |
Non-controlling interests | (14,399) | (2,213) | (8,773) |
Total equity | 295,732 | 45,453 | 398,427 |
Total liabilities, non-controlling interests and shareholders' equity | ¥ 1,956,338 | $ 300,684 | ¥ 1,500,298 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2016USD ($)$ / sharesshares |
Variable Interest Entity, Consolidated, Liabilities, Current, No Recourse | ¥ 897,630 | $ 137,964 | ¥ 660,446 | |
Variable Interest Entity, Consolidated, Liabilities, Noncurrent, No Recourse | ¥ 2,682 | $ 412 | ¥ 4,271 | |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | ||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 110,000,000 | 110,000,000 | 100,000,000 | 100,000,000 |
Common Stock, Shares, Outstanding | 110,000,000 | 110,000,000 | 100,000,000 | 100,000,000 |
CONSOLIDATED STATEMENTS OF (LOS
CONSOLIDATED STATEMENTS OF (LOSS)/INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | |
Revenues | ¥ 969,275 | $ 148,975 | ¥ 710,993 | ¥ 529,469 |
Cost of revenues | (452,220) | (69,505) | (363,579) | (346,671) |
Gross profit | 517,055 | 79,470 | 347,414 | 182,798 |
Operating expenses: | ||||
Selling and marketing | (177,993) | (27,357) | (128,475) | (96,688) |
General and administrative | (339,690) | (52,209) | (148,093) | (135,603) |
Total operating expenses | (517,683) | (79,566) | (276,568) | (232,291) |
Operating (loss)/income | (628) | (96) | 70,846 | (49,493) |
Interest income | 19,559 | 3,006 | 16,622 | 17,853 |
Interest expense | (26,589) | (4,087) | (6,073) | |
Foreign currency exchange (loss)/gain | 388 | 60 | (2,741) | (1,473) |
Other income, net | 6,594 | 1,013 | 4,391 | 253 |
(Loss)/income before income tax expense | (676) | (104) | 83,045 | (32,860) |
Income tax benefit/(expense) | (52,924) | (8,134) | (32,202) | 1,119 |
Net (loss)/income | (53,600) | (8,238) | 50,843 | (31,741) |
Add: Net loss attributable to non-controlling interests | 5,626 | 865 | 3,080 | 5,456 |
Net (loss)/income attributable to RISE Education Cayman Ltd | ¥ (47,974) | $ (7,373) | ¥ 53,923 | ¥ (26,285) |
Net (loss)/income per share: | ||||
Basic and diluted | (per share) | ¥ (0.47) | $ (0.07) | ¥ 0.54 | ¥ (0.26) |
Shares used in net (loss)/income per share computation | ||||
Basic and diluted | 101,890,411 | 101,890,411 | 100,000,000 | 100,000,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Net (loss)/income | ¥ (53,600) | $ (8,238) | ¥ 50,843 | ¥ (31,741) |
Other comprehensive income/(loss), net of tax of nil: | ||||
Foreign currency translation adjustments | (10,424) | (1,602) | 22,275 | 21,124 |
Other comprehensive income (loss) | (10,424) | (1,602) | 22,275 | 21,124 |
Comprehensive (loss)/income | (64,024) | (9,840) | 73,118 | (10,617) |
Add: comprehensive loss attributable to non-controlling interests | 5,626 | 865 | 3,080 | 5,456 |
Comprehensive (loss)/income attributable to RISE Education Cayman Ltd | ¥ (58,398) | $ (8,975) | ¥ 76,198 | ¥ (5,161) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) | Common Stock [Member]CNY (¥)shares | Common Stock [Member]USD ($)shares | Additional Paid-in Capital [Member]CNY (¥) | Additional Paid-in Capital [Member]USD ($) | Statutory Reserves [Member]CNY (¥) | Statutory Reserves [Member]USD ($) | Retained Earnings [Member]CNY (¥) | Retained Earnings [Member]USD ($) | AOCI Attributable to Parent [Member]CNY (¥) | AOCI Attributable to Parent [Member]USD ($) | Parent [Member]CNY (¥) | Parent [Member]USD ($) | Noncontrolling Interest [Member]CNY (¥) | Noncontrolling Interest [Member]USD ($) | |
Balance at Dec. 31, 2014 | ¥ 761,844 | ¥ 6,120 | ¥ 878,385 | ¥ 24,201 | ¥ (153,592) | ¥ 7,065 | ¥ 762,179 | ¥ (335) | |||||||||
Balance (Shares) at Dec. 31, 2014 | shares | 100,000,000 | 100,000,000 | |||||||||||||||
Share-based compensation(Note 16) | 0 | ||||||||||||||||
Appropriation of statutory reserves | 0 | ¥ 0 | 0 | 1,669 | (1,669) | 0 | 0 | 0 | |||||||||
Capital contribution from a non-controlling interest shareholder | 98 | 0 | 0 | 0 | 0 | 0 | 0 | 98 | |||||||||
Net income (loss) | (31,741) | 0 | 0 | 0 | (26,285) | 0 | (26,285) | (5,456) | |||||||||
Other comprehensive income (loss) | 21,124 | 0 | 0 | 0 | 0 | 21,124 | 21,124 | 0 | |||||||||
Balance at Dec. 31, 2015 | 751,325 | ¥ 6,120 | 878,385 | 25,870 | (181,546) | 28,189 | 757,018 | (5,693) | |||||||||
Balance (Shares) at Dec. 31, 2015 | shares | 100,000,000 | 100,000,000 | |||||||||||||||
Share-based compensation(Note 16) | 0 | ||||||||||||||||
Appropriation of statutory reserves | 0 | ¥ 0 | 0 | 6,641 | (6,641) | 0 | 0 | 0 | |||||||||
Distribution to shareholders | [1] | (426,016) | 0 | (426,016) | 0 | 0 | 0 | (426,016) | 0 | ||||||||
Net income (loss) | 50,843 | 0 | 0 | 0 | 53,923 | 0 | 53,923 | (3,080) | |||||||||
Other comprehensive income (loss) | 22,275 | 0 | 0 | 0 | 0 | 22,275 | 22,275 | 0 | |||||||||
Balance at Dec. 31, 2016 | 398,427 | ¥ 6,120 | 452,369 | 32,511 | (134,264) | 50,464 | 407,200 | (8,773) | |||||||||
Balance (Shares) at Dec. 31, 2016 | shares | 100,000,000 | 100,000,000 | |||||||||||||||
Issuance of ordinary shares upon initial public offering ("IPO"), net of offering costs | 437,829 | ¥ 662 | 437,167 | 0 | 0 | 0 | 437,829 | 0 | |||||||||
Issuance of ordinary shares upon initial public offering ("IPO"), net of offering costs (in shares) | shares | 10,000,000 | 10,000,000 | |||||||||||||||
Share-based compensation(Note 16) | 95,307 | $ 14,648 | ¥ 0 | 95,307 | 0 | 0 | 0 | 95,307 | 0 | ||||||||
Appropriation of statutory reserves | 0 | 0 | 0 | 13,855 | (13,855) | 0 | 0 | 0 | |||||||||
Distribution to shareholders | [2] | (571,807) | 0 | (452,369) | 0 | (119,438) | 0 | (571,807) | 0 | ||||||||
Net income (loss) | (53,600) | (8,238) | 0 | 0 | 0 | (47,974) | 0 | (47,974) | (5,626) | ||||||||
Other comprehensive income (loss) | (10,424) | (1,602) | 0 | 0 | 0 | 0 | (10,424) | (10,424) | 0 | ||||||||
Balance at Dec. 31, 2017 | ¥ 295,732 | $ 45,453 | ¥ 6,782 | $ 1,042 | ¥ 532,474 | $ 81,840 | ¥ 46,366 | $ 7,126 | ¥ (315,531) | $ (48,496) | ¥ 40,040 | $ 6,154 | ¥ 310,131 | $ 47,666 | ¥ (14,399) | $ (2,213) | |
Balance (Shares) at Dec. 31, 2017 | shares | 110,000,000 | 110,000,000 | |||||||||||||||
[1] | On April 21, 2016 and September 12, 2016, the Board of Directors approved cash distributions that was paid by the Company to the shareholders amounting to US$10,996 and US$53,000, respectively. | ||||||||||||||||
[2] | On September 18, 2017, the Board of Directors approved cash distributions that was paid by the Company to the sole shareholder amounting to US$87,000. |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | Sep. 12, 2016 | Sep. 18, 2017 | Apr. 21, 2016 |
Dividends, Common Stock, Cash | $ 53,000 | $ 87,000 | $ 10,996 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net (loss)/income | ¥ (53,600) | $ (8,238) | ¥ 50,843 | ¥ (31,741) |
Adjustments to reconcile net (loss)/income to net cash used in operating activities: | ||||
Depreciation and amortization expenses | 49,711 | 7,640 | 69,822 | 91,507 |
Share-based compensation | 95,307 | 14,648 | 0 | 0 |
Loss on disposal of equipment | 33 | 5 | 16 | 485 |
Amortization of debt issuance cost | 5,129 | 788 | 0 | 0 |
Deferred income tax (benefit)/expense | 1,151 | 177 | (4,763) | (11,997) |
Changes in operating assets and liabilities: | ||||
Restricted cash | (4,832) | (743) | (897) | (3,899) |
Prepayments and other current assets | 2,617 | 402 | (16,756) | (2,716) |
Accounts receivable, net | (1,695) | (261) | 0 | 0 |
Amounts due from a related party | (6,733) | (1,035) | 0 | 0 |
Inventories | (2,372) | (365) | 430 | 1,520 |
Accounts payable | 1,973 | 303 | 1,130 | (659) |
Accrued expenses and other current liabilities | 47,427 | 7,290 | 20,520 | 11,922 |
Income taxes payable | (2,543) | (391) | 17,959 | (2,343) |
Deferred revenue and customer advances | 201,004 | 30,894 | 111,406 | 105,516 |
Due to a related party | 20,000 | 3,075 | 0 | 0 |
Other non-current assets | (7,659) | (1,177) | (3,093) | 2,537 |
Other non-current liabilities | 350 | 54 | (6,534) | 3,588 |
Net cash generated from operating activities | 345,268 | 53,066 | 240,083 | 163,720 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from disposal of equipment | 12 | 2 | 190 | 188 |
Purchase of property and equipment | (50,336) | (7,736) | (35,450) | (34,979) |
Purchase of intangible assets | (2,743) | (422) | (8,317) | (8,409) |
Purchase of short-term investments | (390,000) | (59,942) | (615,100) | (308,000) |
Proceeds from maturity of short-term investments | 390,000 | 59,942 | 616,133 | 312,967 |
Loans to a related party | (150,000) | (23,055) | (280,000) | (200,000) |
Repayment of loans from a related party | 150,000 | 23,055 | 280,000 | 200,000 |
Net cash used in investing activities | (53,067) | (8,156) | (42,544) | (38,233) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Change in restricted cash | (8,401) | (1,291) | (11,080) | 0 |
Proceeds from loans, net of issuance costs | 573,019 | 88,071 | 356,887 | 0 |
Principal repayments on loans | (301,639) | (46,361) | 0 | 0 |
Capital contribution from a non-controlling interest shareholder | 0 | 0 | 0 | 98 |
Proceeds from IPO, net of capitalized expenses | 437,829 | 67,293 | 0 | 0 |
Distribution to a shareholder | (571,807) | (87,885) | (426,016) | 0 |
Net cash generated from/ (used in) financing activities | 129,001 | 19,827 | (80,209) | 98 |
Effects of exchange rate changes | (5,219) | (802) | 5,233 | 2,378 |
Net increase in cash and cash equivalents | 415,983 | 63,935 | 122,563 | 127,963 |
Cash and cash equivalents at beginning of year | 639,999 | 98,366 | 517,436 | 389,473 |
Cash and cash equivalents at end of year | 1,055,982 | 162,301 | 639,999 | 517,436 |
Supplemental disclosures of cash flow information: | ||||
Income taxes paid | (53,418) | (8,210) | (25,845) | (9,633) |
Interest expense paid | (20,472) | (3,147) | (4,170) | 0 |
Non-cash investing activities: | ||||
Purchase of property and equipment included in accrued expenses and other current liabilities | (9,241) | (1,420) | (7,292) | (4,660) |
Consideration for business acquisitions included in accrued expenses and other current liabilities | ¥ 25,980 | $ 3,993 | ¥ 0 | ¥ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. ORGANIZATION AND BASIS OF PRESENTATION RISE Education Cayman Ltd (the “Company”) is a limited company incorporated in the Cayman Islands under the laws of Cayman Islands on July 16, 2013. On September 30, 2013 (the “Acquisition date”), the Company acquired from certain third-party sellers a junior English Language Training (“ELT”) business (the “Acquisition”). In October 2017, the Group completed an initial public offering (“IPO”) and issued 5,000,000 10,000,000 proceeds from the IPO after deducting underwriting discount and offering costs were RMB 437,829 67,293 42,012 6,457 The Company does not conduct any substantive operations on its own but instead conducts its primary business operations through its wholly-owned subsidiaries, the variable interest entity (the “VIE”), and the VIE’s subsidiaries and schools, which are located in the People’s Republic of China (the “PRC”). The VIE, the VIE’s subsidiaries and schools, hereinafter are collectively referred to as the “VIEs”. The accompanying consolidated financial statements include the financial statements of the Company, its wholly-owned subsidiaries and the VIEs (hereinafter collectively referred to as the “Group”). The Group is principally engaged in the business of providing junior ELT services in the PRC primarily under the “RISE” brand. The Group offers a wide range of educational programs, services and products, consisting primarily of educational courses, sale of course materials, franchise services, and study tours. Percentage of equity interest attributable Date of Place of to the Name establishment establishment Company Principal activity Subsidiaries of the Company: RISE Education Cayman III Ltd (“Cayman III”) July 29, 2013 Cayman Islands 100 % Investment holding RISE Education Cayman I Ltd (“Cayman”) June 19, 2013 Cayman Islands 100 % Investment holding Rise IP (Cayman) Limited (“Rise IP”) July 24, 2013 Cayman Islands 100 % Educational consulting Edge Franchising Co., Limited (“Edge Franchising”) March 16, 2016 Hong Kong 100 % Educational consulting Bain Capital Rise Education (HK) Limited (“Rise HK”) June 24, 2013 Hong Kong 100 % Educational consulting Rise (Tianjin) Education Information Consulting Co., Ltd. (“Rise Tianjin” or “WFOE”) August 12, 2013 PRC 100 % Educational consulting VIE: Beijing Step Ahead Education Technology Development Co., Ltd. January 2, 2008 PRC Educational consulting VIE’s subsidiaries and school: Beijing Haidian District Step Ahead Training School September 18, 2008 PRC Language education Percentage of equity interest attributable Date of Place of to the Name establishment establishment Company Principal activity Beijing Shijingshan District Step Ahead Training School July 14, 2009 PRC Language education Beijing Changping District Step Ahead Training School July 3, 2009 PRC Language education Beijing Chaoyang District Step Ahead Training School July 20, 2009 PRC Language education Beijing Xicheng District RISE Immersion Subject English Training School February 5, 2010 PRC Language education Beijing Dongcheng District RISE Immersion Subject English Training School July 30, 2010 PRC Language education Beijing Tongzhou District RISE Immersion Subject English Training School April 19, 2011 PRC Language education Beijing Daxing District RISE Immersion Subject English Training School March 31, 2013 PRC Language education Beijing Fengtai District Step Ahead Training School February 28, 2012 PRC Language education Shanghai Boyu Investment Management Co., Ltd. January 29, 2012 PRC Language education Shanghai Riverdeep Education Information Consulting Co., Ltd. March 8, 2010 PRC Educational consulting services Shanghai Huangpu District RISE Immersion Subject English Training School June 17, 2011 PRC Language education Guangzhou Ruisi Education Technology Development Co., Ltd. August 17, 2012 PRC Training services Guangzhou Yuexiu District RISE Immersion Subject English Training School April 29, 2014 PRC Language education Guangzhou Haizhu District RISE Immersion Subject English Training School-Chigang December 8, 2014 PRC Language education Guangzhou Tianhe District RISE Immersion Subject English Training School July 11, 2017 PRC Language education Percentage of equity interest attributable Date of Place of to the Name establishment establishment Company Principal activity Shenzhen Mei Ruisi Education Management Co., Ltd. February 28, 2014 PRC Training services Shenzhen Futian District Rise Training Center January 8, 2015 PRC Language education Shenzhen Nanshan District Rise Training Center May 26, 2015 PRC Language education Shenzhen Luohu District Rise Training Center August 3, 2017 PRC Language education Wuxi Rise Foreign Language Training Co., Ltd. June 5, 2013 PRC Training services The VIE arrangements PRC laws and regulations currently require any foreign entity that invests in the education business in China to be an educational institution with relevant experience in providing educational services outside China. The Group’s offshore holding companies are not educational institutions and do not provide educational services outside China. Accordingly, the Group’s offshore holding companies are not allowed to directly engage in the education business in China. To comply with PRC laws and regulations, the Group conducts all of its junior ELT business in China through the VIEs. The VIEs hold the requisite licenses and permits necessary to conduct the Group’s junior ELT business. In addition, the VIEs hold leases and other assets necessary to operate the Group’s schools, employ teachers and generate substantially all of the Group’s revenues. Despite the lack of technical majority ownership, the Company has effective control of the VIE through a series of contractual arrangements (the “Contractual Agreements”) and a parent-subsidiary relationship exists between the Company and the VIE. The equity interests of the VIE are legally held by PRC individuals (the “Nominee Shareholders”). Through the Contractual Agreements, the nominee shareholders of the VIE effectively assign all their voting rights underlying their equity interests in the VIE to the Company, and therefore, the Company has the power to direct the activities of the VIE that most significantly impact its economic performance. The Company also has the right to receive economic benefits from the VIE that potentially could be significant to the VIE. Based on the above, the Company consolidates the VIE in accordance with SEC Regulation SX-3A-02 and ASC810-10, Consolidation: Overall. The following is a summary of the Contractual Agreements: Proxy Agreement. Loan Agreements. Call Option Agreement. Business Cooperation Agreement. Equity Pledge Agreement. Consulting Services Agreements. Service agreement. Comprehensive Services Agreements. License Agreements. Spousal Consent Letters. In November 2016, certain Contractual Agreements were supplemented to reflect a change in one of the Nominee Shareholders designated by Rise HK, and it was resolved that Rise HK through the WFOE held the irrevocable proxy to exercise all the voting rights of the shareholders of the VIE since the Proxy Agreement was in existence. As a result, Rise HK has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and is the primary beneficiary of the VIE. In June 2017, certain Contractual Arrangements were supplemented to reflect a change in one of the Nominee Shareholders designated by Rise HK. Based on the opinion of the Company’s PRC legal counsel, (i) the ownership structure of the Group, including its subsidiaries in the PRC and VIEs are in compliance with all existing PRC laws and regulations; and (ii) each of the Contractual Agreements among Rise HK, the WFOE, the VIEs and the Nominee Shareholders governed by PRC laws, are legal, valid and binding, enforceable against such parties, and will not result in any violation of PRC laws or regulations currently in effect. However, uncertainties in the PRC legal system could cause the relevant regulatory authorities to find the current Contractual Agreements and businesses to be in violation of any existing or future PRC laws or regulations. If the Company, Rise HK, the WFOE or any of its current or future VIEs are found in violation of any existing or future laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, which may include, but not limited to, revocation of business and operating licenses, being required to discontinue or restrict its business operations, restriction of the Group’s right to collect revenues, being required to restructure its operations, imposition of additional conditions or requirements with which the Group may not be able to comply, or other regulatory or enforcement actions against the Group that could be harmful to its business. The imposition of any of these or other penalties may result in a material and adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these penalties causes the Company to lose the rights to direct the activities of the VIEs or the right to receive their economic benefits, the Company would no longer be able to consolidate the VIEs. As at December 31, 2016 2017 2017 RMB RMB US$ Cash and cash equivalents 437,594 654,777 100,637 Restricted cash 5,609 10,441 1,605 Accounts receivable, net 1,364 210 Inventories 1,605 1,952 300 Prepayments and other current assets 38,297 32,621 5,014 Amounts due from the Group’s subsidiaries 63,897 106,748 16,406 Total current assets 547,002 807,903 124,172 Property and equipment, net 67,601 92,803 14,264 Intangible assets, net 1,740 1,060 163 Goodwill 145,781 145,781 22,406 Deferred tax assets 4,087 2,404 369 Other non-current assets 23,564 31,681 4,869 Total non-current assets 242,773 273,729 42,071 Total assets 789,775 1,081,632 166,243 Accounts payable 1,484 3,168 487 Accrued expenses and other liabilities 76,418 100,156 15,394 Deferred revenue and customer advances 581,215 776,052 119,277 Income taxes payable 1,329 18,254 2,806 Amounts due to the Group’s subsidiaries 49,007 67,990 10,449 Total current liabilities 709,453 965,620 148,413 Deferred tax liabilities 2,527 Other non-current liabilities 1,744 2,682 412 Total non-current liabilities 4,271 2,682 412 Total liabilities 713,724 968,302 148,825 For the Years ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Revenues 503,256 673,264 912,166 140,197 Net (loss)/income (51,138) (24,532) 24,771 3,807 Net cash provided by operating activities 99,499 49,586 263,813 40,547 Net cash used in investing activities (34,116) (26,792) (46,630) (7,167) The revenue-producing assets that are held by the VIEs comprise of property and equipment, student base and franchise agreements. The VIEs contributed an aggregate of 95 95 94 As of December 31, 2017, there was no pledge or collateralization of the VIEs’ assets that can only be used to settle obligations of the VIEs. Other than the amounts due to subsidiaries of the Group (which are eliminated upon consolidation), all remaining liabilities of the VIEs are without recourse to the Company. The Company did not provide nor intend to provide financial or other support not previously contractually required to the VIEs during the years presented. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of its net assets, equivalent to the balance of its paid-in capital and statutory reserves, to the Company in the form of loans and advances or cash dividends. Please refer to Note 14 for disclosure of restricted net assets. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, and the VIEs. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs have been eliminated upon consolidation. Results of subsidiaries, businesses acquired from third parties and the VIEs are consolidated from the date on which control is obtained by the Company. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include valuation allowance for deferred tax assets, uncertain tax positions, the initial valuation of the assets acquired and liabilities assumed in a business combination, economic lives and impairment of long-lived assets, impairment of goodwill, estimating the best estimate of selling price for each deliverable in the Group’s revenue arrangements, and share-based compensation. Actual results could differ from those estimates. Convenience translation Amounts in U.S. dollars are presented for the convenience of the reader and are translated at the noon buying rate of RMB6.5063 per US$1.00 on December 31, 2017 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. Foreign currency The functional currency of the Company and its non-PRC subsidiaries is the United States Dollars (“US$”). The Company’s PRC subsidiaries and the VIEs determined their functional currency to be Renminbi (the “RMB”). The Group uses the RMB as its reporting currency. Each entity in the Group maintains its financial records in its own functional currency. Transactions denominated in foreign currencies are measured at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are remeasured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are remeasured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of (loss)/income. The Company uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in accumulated other comprehensive income, a component of shareholders’ equity. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. Restricted cash Restricted cash primarily represents deposits held in a designated bank account as security for the interest payments on the Group’s long-term loan; and deposits restricted as to withdrawal or use under government regulations. Short-term investments The Group’s short-term investments comprise primarily of cash deposits at floating rates based on daily bank deposit rates with original maturities ranging from over three months to six months. Inventories Inventories are finished goods and mainly comprised of textbooks and other educational study tools (“course materials”). Course materials are stated at the lower of cost or market. Cost is determined using the weighted average cost method. As of December 31, 2016 and 2017, the Group did not have any provision for inventories. Property and equipment Property and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is calculated on a straight line basis over the following estimated useful lives: Electronic equipment 3 years Furniture 3 - 5 years Vehicles 4 years Leasehold improvements Shorter of the lease term or estimated useful life Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of (loss)/income. Direct costs that are related to the construction of property and equipment, and incurred in connection with bringing the assets to their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property and equipment, and the depreciation of these assets commences when the assets are ready for their intended use. Segment reporting In accordance with ASC 280, Segment Reporting Non-controlling interests For certain subsidiaries of the VIE, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Group. Consolidated net (loss)/income on the consolidated statements of (loss)/income includes the net loss attributable to non-controlling interests. The cumulative results of operations attributable to non-controlling interests are recorded as non-controlling interests in the Group’s consolidated balance sheets. Goodwill The Group assesses goodwill for impairment in accordance with ASC 350-20, IntangiblesGoodwill and Other: Goodwill There was only one reporting unit (that also represented the operating segment) as of December 31, 2016 and 2017, respectively. Goodwill was allocated to the one reporting unit as of December 31, 2016 and 2017, respectively (Note 9). The Group has the option to assess qualitative factors first to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described above is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired and the Group is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Group must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss. Intangible assets Intangible assets with finite lives are carried at cost less accumulated amortization. Amortization of finite-lived intangible assets except for student base is computed using the straight-line method over the estimated useful lives. Student base is amortized using an accelerated pattern based on the estimated student attrition rate of the acquired schools. The estimated useful lives of intangible assets from the date of purchase are as follows: Category Estimated Useful Life Courseware license 15 years Franchise agreements 2.5-3 years Student base 3-5 years Trademarks 10-15 years Purchased software 3-5 years Teaching course materials 10 years Impairment of long-lived assets other than goodwill The Group evaluates its long-lived assets, including fixed assets and intangible assets with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. For all periods presented, there was no impairment of any of the Company’s long-lived assets. Business Combination We account for business combinations using the purchase method of accounting in accordance with ASC topic 805, Business Combinations In a business combination achieved in stages, we re-measured our previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings. The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. We determine discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets, forecasted life cycle and forecasted cash flows over that period. Fair value of financial instruments Financial instruments include cash and cash equivalents, short-term investments, restricted cash, certain other current assets, accounts payable, long-term loan, customer advances, and certain other current liabilities. The carrying amounts of these financial instruments, except for the long-term loan, approximate their fair values because of their short-term maturities. The carrying amount of the long-term loan approximates its fair value due to the fact that the related interest rate approximates the interest rates currently offered by financial institutions for similar debt instruments of comparable maturities. Revenue recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the selling price is fixed or determinable and collection is reasonably assured. The Group’s business is subject to business tax, value added taxes (“VAT”) and tax surcharges assessed by governmental authorities. Pursuant to ASC 605-45, Revenue RecognitionPrincipal Agent Considerations The primary sources of the Group’s revenues are as follows: (a) Educational programs Educational programs include English courses and related course materials. In accordance with ASC subtopic 605-25, Revenue Recognition: Multiple-Deliverable Revenue Arrangements Course fees are collected in full in advance of the commencement of each course and each course comprises of a fixed amount of classes. Course revenue is recognized ratably as the classes for the related course are delivered to the students. Students are allowed to return course materials if they are unused. However, once the student attends the first class of the respective course, course materials cannot be returned. Therefore, the Group recognizes revenue from the sale of course materials when the student attends the first class of the respective course. The amounts recognized for each deliverable is limited to the amount that is not contingent upon the delivery of additional deliverables or meeting other specified performance conditions. According to local education bureau regulations, depending on a school’s location and the amount of classes remaining for a course, the Group may be required to refund course fees for any remaining undelivered classes to students who withdraw from a course. The refund is recorded as a reduction of the related course fees received in advance and has no impact on recognized revenue. Refunds on recognized revenue were insignificant for all periods presented. The Group may issue promotional coupons to attract enrollment for its courses. The promotional coupons are not issued in conjunction with a concurrent revenue transaction and are for a fixed RMB amount that can only be redeemed to reduce the amount of the tuition fees for future courses. The promotional coupons are accounted for as a reduction of revenue when the corresponding revenue is recognized in accordance with ASC 605-50-45-2. (b) Franchise revenues Franchise revenues includes non-refundable initial franchise fees, which are recognized by the Group as revenue when substantially all services or conditions relating to the initial franchise fee have been performed, which is generally when a franchisee commences its operations under the RISE brand. The services to be performed under the franchise agreements to earn the initial franchise fees comprise of (i) authorizing franchisees to use the RISE brand and the Group’s courseware, and (ii) initial setup services, including assisting with site selection and marketing strategy, training of franchisee management and teachers. The Group’s franchise agreements do not include guarantees or other forms of financial assistance, refund provisions or options to repurchase franchises from franchisees. Initial franchise fees are deferred and recorded as “deferred revenue and customer advances” until these commitments and obligations have been performed, which is upon the franchisee commencing its operations under the RISE brand. The Group also receives recurring franchise fees from its franchisees, which include a fixed percentage of the franchisees’ course fees and proceeds from the sale of related course materials. The recurring franchise fees are recognized as franchise revenue as the fees are earned and realized. (c) Other revenues Other revenues comprises mainly of the provision of overseas study tours. The Group bears the risks and rewards, including customer acceptance of the services and has the right to unilaterally determine and change the study tour itinerary. The Group also sets the study tour prices charged to customers and independently selects travel service suppliers. Therefore, the Group is the primary obligor of the study tour service arrangement and recognizes revenue on a gross basis. Revenue from study tour services is recognized once the organized tour is completed in its entirety. Advertising expenditures Advertising costs are expensed when incurred and are included in selling expenses in the consolidated statements of (loss)/income. For the years ended December 31, 2015, 2016 and 2017, advertising expenses were approximately RMB39,397, RMB63,734 and RMB80,475 (US$12,369), respectively. Leases Leases are classified at the inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over their respective lease term. The Group leases certain office facilities under non-cancelable operating leases. Certain lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. (Loss)/income per share In accordance with ASC 260, Earnings Per Share Share-based compensation The Group applies ASC 718, Compensation Stock Compensation In accordance with ASC 718, the Group recognizes share-based compensation cost for equity awards to employees with a performance condition based on the probable outcome of that performance condition compensation cost is recognized if it is probable that the performance condition will be achieved and shall not be recognized if it is not probable that the performance condition will be achieved. In accordance with ASC 718, the effect of a market condition is reflected in the grant-date fair value of the granted equity awards. The Group recognizes share-based compensation cost for equity awards with a market condition provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. A change in any of the terms or conditions of the awards is accounted for as a modification of the award. When the vesting conditions (or other terms) of the equity awards granted to employees are modified, the Group first determines on the modification date whether the original vesting conditions were expected to be satisfied, regardless of the entity’s policy election for accounting for forfeitures. If the original vesting conditions are not expected to be satisfied, the grant-date fair value of the original equity awards are ignored and the fair value of the equity award measured at the modification date is recognized if the modified award ultimately vests. When a vesting condition that is probable of achievement is modified and the new vesting condition also is probable of achievement, the compensation cost to be recognized if either the original vesting condition or the new vesting condition is achieved cannot be less than the grant-date fair value of the original award. That compensation cost is recognized if either the original or modified vesting condition is achieved. Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the fair value of the awards and other pertinent factors at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period the modification occurs. For unvested awards, the Group recognizes over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Group recognizes is the cost of the original award. The Group uses the accelerated method for all awards granted with graded vesting service conditions, and the straight-line method for awards granted with non-graded vesting service conditions. The Group accounts for forfeitures as they occur. The Group, with the assistance of an independent third party valuation firm, determined the fair value of the stock options granted to employees. The binomial option pricing model was applied in determining the estimated fair value of the options granted to employees. Income taxes The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes The Group accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties arising from underpayment of income taxes shall be computed in accordance with the related PRC tax law. The amount of interest expense is computed by applying the applicable statutory rate of interest to the difference between the tax position recognized and the amount previously taken or expected to be taken in a tax return. Interest and penalties recognized in accordance with ASC 740 are classified in the consolidated statements of (loss)/income as income tax expense. In accordance with the provisions of ASC 740, the Group recognizes in its consolidated financial statements the impact of a tax position if a tax return position or future tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group’s estimated liability for unrecognized tax benefits which is included in “other non-current liabilities” on the consolidated balance sheets is periodically assessed for adequacy and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements. Additionally, in future periods, changes in facts, circumstances, and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. Government subsidies Government subsidies primarily consist of financial subsidies received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. There are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. Government subsidies of non-operating nature and with no further conditions to be met are recorded as non-operating income in “Other income, net” of the consolidated statements of (loss)/income when received. Comprehensive (loss)/income Comprehensive (loss)/income is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income Employee benefit expenses All eligible employees of the Group are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group has no further payment obligations once the contributions have been paid. The Group recorded employee benefit expenses of RMB46,933, RMB52,734 and RMB62,934 (US$9,673) for the years ended December 31, 2015, 2016 and 2017, respectively. Recent accounting pronouncements In August 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-14, Revenue from Contracts with Customers-Deferral Revenue from Contracts with Customers Revenue from Contracts with CustomersPrincipal versus Agent Considerations Revenue from Contracts with CustomersIdentifying Performance Obligations and Licensing Revenue from Contracts with Customers Narrow-Scope Improvements and Practical Expedients Based on the contracts outstanding as of December 31, 2017, management expects that the cumulative catch-up adjustment upon adoption of ASC 606 relating to its educational programs, recurring franchise fees from its franchisees, and study tour services will not be material. However, based on management’s assessment, one area that is expected to have a significant impact is the Group’s recognition of initial franchise fees. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU 2016-07, InvestmentsEquity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”). ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. ASU 2016-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The adoption of ASU 2016-07 on January 1, 2017 is not expected to have a material effect on the Group’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments Statement of Cash Flows Statement of Cash Flows Restricted Cash In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying Definition of a Business In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , In May 2017, the FASB issued ASU 2017-09, CompensationStock Compensation (Topic 718): scope of Modification Accounting |
CONCENTRATION OF RISKS
CONCENTRATION OF RISKS | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | 3. CONCENTRATION OF RISKS Business, customer, political, social and economic risks The Group participates in a dynamic industry and believes that changes in any of the following areas could have a material adverse effect on the Group’s future financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to new entrants; advances and new trends in new technologies and industry standards; changes in certain strategic relationships or customer relationships; regulatory considerations; and risks associated with the Group’s ability to attract and retain employees necessary to support its growth. The Group’s operations could be also adversely affected by significant political, economic and social uncertainties in the PRC. No single customer or supplier accounted for more than 10% of revenue or costs of revenues for the years ended December 31, 2015, 2016 and 2017. Concentration of credit risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, short-term investments, and restricted cash. As of December 31, 2017, substantially all of the Group’s cash and cash equivalents, short-term investments and restricted cash were deposited with financial institutions with high-credit ratings and quality. Interest rate risk The Group is exposed to interest rate risk related to its outstanding long-term loan (Note 10). The interest rate of the long-term loan was mainly based on the three month London Interbank Offered Rate and a pre-determined margin. A hypothetical 1 6,506 1,000 Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For RMB against U.S. dollar, there was depreciation of approximately 5.8 6.4 6.7 To the extent that the Company needs to convert U.S. dollar into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends on ordinary shares, strategic acquisitions or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company. In addition, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of the Company’s earnings or losses. Currency convertibility risk The Group transacts all of its business in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into United States dollars or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. The Group’s cash and cash equivalents, and restricted cash denominated in RMB amounted to RMB 878,468 135,018 |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | 4. BUSINESS COMBINATION Acquisition of Edge Business On November 1, 2017, the Group acquired 100 Details of the purchase consideration are as follows: (i) Cash consideration of RMB 16,769 2,540 (ii) In accordance with the sale and purchase agreement, the Company shall issue to the selling shareholder 216,021 9,211 1,395 The Cash Consideration and Share Consideration were settled on January 2, 2018 The Company has completed the valuations necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, resulting from which the amount of goodwill was determined and recognized as of the acquisition date. RMB US$ Purchase consideration 25,980 3,993 Net assets acquired, excluding intangible assets and the related deferred tax liabilities 2,133 329 Intangible assets 4,994 767 Trademark 1,693 260 Student base 2,962 455 Franchise agreements 339 52 Deferred tax liabilities (1,235) (190) Deferred revenue and customer advances (10,663) (1,639) Goodwill 30,751 4,726 Included in the goodwill of RMB30,261(US$4,651) recognized above is the expected synergies from combining operations of the Acquiree and the Group which does not qualify for separate recognition. None of the goodwill recognized is expected to be deductible for income tax purposes. The Company recognized RMB 889 137 The actual results of operation after the acquisition date and pro-forma results of operations for this acquisition have not been presented because the effects of this acquisition were insignificant. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2017 | |
Revenue [Abstract] | |
Revenue Recognition Disclosure [Text Block] | 5. REVENUES For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Educational programs 451,411 618,326 831,106 127,739 Franchise revenues (a) 60,793 63,532 100,013 15,372 Others 17,265 29,135 38,156 5,864 529,469 710,993 969,275 148,975 (a) Initial franchise fees amounted to RMB 16,518 15,566 23,302 3,581 44,275 47,966 76,711 11,791 |
PREPAYMENTS AND OTHER CURRENT A
PREPAYMENTS AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepayments and Other Current Assets [Text Block] | 6. PREPAYMENTS AND OTHER CURRENT ASSETS As at December 31, 2016 2017 2017 RMB RMB US$ Prepayments to suppliers 16,414 12,820 1,970 Prepaid rental expense 10,735 11,924 1,833 Staff advances 1,684 1,762 271 Deposits 7,625 10,411 1,600 Prepaid business tax, VAT and other surcharges 8,083 1,528 235 Other receivables 976 2,126 327 45,517 40,571 6,236 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2017 | |
Payments to Acquire Property, Plant, and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 7. PROPERTY AND EQUIPMENT, NET As at December 31, 2016 2017 2017 RMB RMB US$ Electronic equipment 35,464 40,740 6,262 Furniture 7,350 8,643 1,328 Vehicles 1,168 1,168 179 Leasehold improvements 141,253 185,922 28,576 185,235 236,473 36,345 Less: accumulated depreciation 109,562 136,296 20,948 Property and equipment, net 75,673 100,177 15,397 Depreciation expense for the years ended December 31, 2015, 2016 and 2017 was RMB 26,128 29,634 29,246 4,495 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 8. INTANGIBLE ASSETS, NET As at December 31, 2016 2017 2017 RMB RMB US$ Costs: Courseware license 213,509 200,079 30,752 Franchise agreements 60,800 61,133 9,396 Student base 91,960 94,875 14,582 Trademarks 48,419 47,040 7,230 Purchased software 14,101 16,783 2,579 Teaching course materials 10,786 10,747 1,652 439,575 430,657 66,191 Accumulated amortization: Courseware license (46,261) (56,862) (8,740) Franchise agreements (60,800) (60,818) (9,348) Student base (90,916) (91,875) (14,121) Trademarks (10,490) (12,893) (1,982) Purchased software (3,041) (4,420) (678) Teaching course materials (2,116) (3,174) (488) (213,624) (230,042) (35,357) Net carrying amount 225,951 200,615 30,834 The Group recorded amortization expense of RMB 65,379 40,188 20,465 3,145 As of December 31, 2017, estimated amortization expense of the existing intangible assets for each of the next five years is RMB 21,454 19,812 19,366 19,080 19,080 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Disclosure [Text Block] | 9. GOODWILL Balance as of January 1, 2016 444,412 Goodwill acquired Impairment losses Foreign exchange effect 17,274 Balance as of December 31, 2016 461,686 Goodwill acquired in business combination (note 4) 30,751 Impairment losses Foreign exchange effect (16,705) Balance as of December 31, 2017 475,732 Balance as of December 31, 2017 (US$) 73,119 The Group’s goodwill is mainly attributable to the Acquisition in 2013 and 2017. Goodwill is not tax deductible. For the years ended December 31, 2016 and 2017, respectively, the Group performed a qualitative assessment based on the requirements of ASC 350-20. The Group evaluated all relevant factors, weighed all factors in their entirety and concluded that it was not more-likely-than-not that the fair value of the reporting unit was less than its respective carrying amount. Therefore, further impairment testing on goodwill was unnecessary as of December 31, 2016 and 2017, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As at December 31, 2016 2017 2017 RMB RMB US$ Payroll and welfare payable 47,221 78,263 12,029 Business tax, VAT and surcharges payable 2,205 8,995 1,383 Interest payable 897 1,608 247 Accrued expenses 35,758 41,553 6,386 Accrual for purchase of property and equipment 7,292 9,241 1,420 Payable for acquisition consideration (note 4) 25,626 3,939 Others 2,785 5,813 894 96,158 171,099 26,298 |
LONG-TERM LOAN
LONG-TERM LOAN | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 11. LONG-TERM LOAN In July 2016, the Company entered into a loan facility agreement (“Original Facility Agreement”), pursuant to which the Company is entitled to draw down up to US$ 55,000 1,705 11,559 110,000 As of December 31, 2017, the Group has drawn down the facility in full and US$ 10,000 2.00 3.50 4.05 Management assessed no breach of its loan covenants for the year ended December 31, 2017. The loan facility is guaranteed by Rise IP, Rise HK, the WFOE and VIE. Further, the ordinary shares of certain subsidiaries of the Group were pledged as collateral for the loan facility. In addition, the Group maintained deposits held in a designated bank account as security for interest payments amounting to US$ 2,839 18,472 US$ September 12, 2019 12,000,000 September 12, 2020 19,250,000 September 12, 2021 24,750,000 September 12, 2022 44,000,000 100,000,000 On March 12, 2018, principal amounting to US$ 12,000 13,750 19,250 24,750 30,250 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 12. INCOME TAXES Cayman Islands Under the current laws of the Cayman Islands, the Company and its Cayman subsidiaries are not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong Rise HK and Edge Franchising are incorporated in Hong Kong and are subject to Hong Kong Profits Tax at a rate 16.5 on profits arising in or derived from Hong Kong PRC The Company’s subsidiaries and VIEs in the PRC are subject to the statutory income tax rate of 25 Dividends, interests, rent or royalties payable by the Group’s PRC subsidiaries, to non-PRC resident enterprises, and proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) shall be subject to 10 For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ PRC (63,513) 43,995 14,121 2,170 Non-PRC 30,653 39,050 (14,797) (2,274) (32,860) 83,045 (676) (104) For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Current income tax expense (10,878) (36,965) (51,773) (7,957) Deferred income tax benefit/(expense) 11,997 4,763 (1,151) (177) Income tax benefit/(expense) 1,119 (32,202) (52,924) (8,134) For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ (Loss)/income before income tax (32,860) 83,045 (676) (104) Income tax benefit/(expense) computed at the PRC statutory tax rate of 25% 8,215 (20,761) 169 26 Effect of different tax rates in different jurisdictions 4,557 5,688 (8,175) (1,256) Non-deductible expenses (2,352) (9,051) (26,482) (4,071) Outside basis difference on investment in WFOE (3,174) (4,446) (683) PRC royalty withholding tax (4,177) (4,607) (6,950) (1,068) Changes in valuation allowance (5,124) (297) (7,040) (1,082) Income tax benefit/(expense) 1,119 (32,202) (52,924) (8,134) The significant components of the Group’s deferred tax assets and liabilities as of December 31, 2016 and 2017 are as follows: For the year ended December 31, 2016 2017 2017 RMB RMB US$ Deferred tax assets: Tax loss carry forward 32,601 34,111 5,243 Accrued expenses 4,590 6,638 1,020 Others 1,422 1,971 303 Less: Valuation allowance (25,491) (32,002) (4,919) 13,122 10,718 1,647 Deferred tax liabilities: Long-lived assets arising from acquisitions 1,094 168 Outside basis difference on investment in WFOE 3,174 7,620 1,171 Revenue recognition 8,931 3,385 521 12,105 12,099 1,860 Presentation in the consolidated balance sheets: Deferred tax assets 4,087 2,404 369 Deferred tax liabilities (3,070) (3,785) (582) Net deferred tax assets/(liabilities) 1,017 (1,381) (213) The Group operates through several subsidiaries and the VIEs and valuation allowances are considered for each of the subsidiaries and the VIEs on an individual basis. The Group recorded a valuation allowance against deferred tax assets of those subsidiaries and the VIEs that are individually in a cumulative loss as of December 31, 2016 and 2017. In making such determination, the Group evaluates a variety of factors including the Group’s operating history, accumulated deficit, existence of taxable temporary differences and reversal periods. As of December 31, 2017, the aggregate undistributed earnings from the Company’s WFOE and VIEs that are available for distribution are RMB 112,059 17,223 76,202 11,712 As of December 31, 2016 and 2017, the Group had taxable losses of RMB 130,404 136,445 20,971 losses as of December 31, 2017 As of December 31, 2016 and 2017, the Group had unrecognized tax benefits of RMB 9,124 8,799 1,352 respectively, 932 1,389 213 8,192 7,410 1,139 5,888 905 2016 2017 2017 RMB RMB US$ Balance at January 1, 8,843 9,124 1,402 Additions based on tax positions related to current year 281 738 113 Settlement (1,063) (163) Balance at December 31, 9,124 8,799 1,352 The Group recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expenses. For the years ended December 31, 2015, 2016 and 2017, the Group recognized approximately RMB 279 573 734 113 275 1,666 1,160 178 As of December 31, 2017, tax years ended December 31, 2013 through 2017 for the WFOE and the VIEs remain open to examination by the PRC tax authorities. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 13. RELATED PARTY TRANSACTIONS a) Related parties The direct controlling shareholder Bain Capital Education IV” Entities controlled by the ultimate holding company Lionbridge Limited (“Lionbridge”) Bain Capital Advisors (China) Ltd. (“Bain Advisors”) An Entity controlled by a shareholder Beijing Mai Rui Technology Co., Ltd. (“Mai Rui”) For the year ended December31, Notes 2015 2016 2017 2017 RMB RMB RMB US$ Loan to a related party: Lionbridge (i) 200,000 280,000 150,000 23,055 Fees paid to related parties: Mai Rui (ii) 705 278 - - Bain Advisors (iii) 6,200 6,200 38,537 5,923 (i) The Group entered into certain entrustment loan agreements with Lionbridge, pursuant to which the Group granted total loans of RMB 280,000 150,000 23,055 Year ended December 31, 2016 Loan granted Principal Interest Rate Period Loan 1 200,000 10 % March 10, 2015 to November 30, 2015 Loan 2 200,000 9 % March 30, 2016 to November 30, 2016 Loan 3 30,000 5 % July 8, 2016 to December 8, 2016 Loan 4 50,000 6 % July 8, 2016 to December 8, 2016 Year ended December 31, 2017 Loan granted Principal Interest Rate Period Loan 1 100,000 7 % February 24, 2017 to November 30, 2017 Loan 2 50,000 7 % March 20, 2017 to November 30, 2017 As of December 31, 2016 and 2017, respectively, the above loans were fully repaid. Interest income of RMB 12,712 7,457 1,146 (ii) During the years ended December 31, 2015, 2016 and 2017, the Group paid course development fees of RMB 705 278 (iii) During the years ended December 31, 2015, 2016 and 2017, the Group paid consulting fees of RMB 6,200 6,200 38,537 5,923 33,887 5,208 20,000 3,074 (iv) On November 1, 2017, the Group acquired Edge Business from a seller in which a managing director of Bain Capital is a director and minority shareholder. (Note 4) c) The balances between the Group and its related parties as of December 31, 2016 and 2017 are listed below: As at December 31, 2016 2017 2017 RMB RMB US$ Bain Capital Education IV 6,604 1,015 The above amount related to reimbursement of third party underwriting commissions due to the Group. As at December 31, 2016 2017 2017 RMB RMB US$ Bain Advisors 20,000 3,074 All the balances with related parties as of December 31, 2017 were unsecured and repayable on demand. No allowance for doubtful accounts was recognized for the amount due from related parties for the years ended December 31, 2017. The amount due above has been fully paid in March 2018. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Restricted Assets Disclosure [Text Block] | 14. RESTRICTED NET ASSETS Prior to payment of dividends, pursuant to the laws applicable to the PRC’s foreign investment enterprises, the VIE and the VIE’s subsidiaries must make appropriations from after-tax profit to non-distributable reserve funds as determined by the board of directors of each company. These reserves include (i) general reserve and (ii) the development fund. Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax income as determined under PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Company’s discretion 3,526 PRC laws and regulations require private schools that require reasonable returns to make annual appropriations of no less than 25% of after-tax income prior to payments of dividend to its development fund, which is to be used for the construction or maintenance of the school or procurement or upgrading of educational equipment. For private schools that do not require reasonable returns, this amount should be equivalent to no less than 25% of the annual increase of net assets of the school as determined in accordance with generally accepted accounting principles in the PRC. 3,115 13,855 2,129 These reserves are included as statutory reserves in the consolidated statements of changes in shareholders’ equity. The statutory reserves cannot be transferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation. Relevant PRC laws and regulations restrict the WFOE and the VIEs from transferring certain of their net assets to the Company in the form of loans, advances or cash dividends. Amounts restricted include the paid in capital and statutory reserves of the WFOE and the VIEs, totaling approximately RMB 279,070 43,892 |
(LOSS)_INCOME PER SHARE
(LOSS)/INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 15. (LOSS)/INCOME PER SHARE For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Numerator: Net (loss)/income attributable to RISE Education Cayman Ltdbasic and diluted (26,285) 53,923 (47,974) (7,373) Denominator: Weighted average number of ordinary shares outstanding- basic and diluted 100,000,000 100,000,000 101,890,411 Basic and diluted (loss)/income per share (0.26) 0.54 (0.47) (0.07) There were no outstanding share options during the years ended December 31, 2015. As at December 31, 2016, the outstanding share options are considered contingently issuable shares. As the exercisability event has not occurred (Note 2, Note 16) at December 31, 2016, the contingently issuable shares, were excluded from the computation of diluted (loss)/income per share for the year ended December 31, 2016. No adjustment has been made to the basic loss per share amount presented for the year ended December 31, 2017 as the impact of the outstanding share options were anti-dilutive. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 16. SHARE-BASED PAYMENTS 2016 Equity Incentive Plan In 2016, the Board of Directors approved the Equity Option Plan (the “2016 Equity Incentive Plan”), which has a term of 10 7,000,000 In April 2016, the Board of Directors approved option grants to employees for the purchase of 5,985,000 50% of the options granted will generally vest in four or five equal installments over a service period (the “2016 Service Options”) while the remaining 50% of the options will vest in two equal installments of 25% each if a fixed targeted return on the Company’s ordinary shares is achieved (the “2016 Market Options”). 90,335 Modification of options In September 2016, the Board of Directors approved the modification of substantially all the 2016 Options to require recipients to remain in service with the Company until October 1, 2017, October 1, 2018, October 1, 2019, or October 1, 2020; otherwise the 2016 Options (both vested and unvested portions) will be forfeited. As of the modification date, the original performance condition of the 2016 Options was not expected to be satisfied, therefore, the modification-date fair value of the 2016 Options instead of the original grant-date fair value will be used to measure the modified 2016 Options once they ultimately vest. In November 2017 (“2017 Modification Date”), the Board of Directors modified share options granted to six directors and officers to be fully vested on the 2017 Modification Date. On the 2017 Modification Date, the Company recognized compensation expenses amounting to RMB 2,329 358 Weighted - Weighted- Weighted- average average average remaining Aggregate Number of exercise grant- date contractual intrinsic options price fair value term Value US$ US$ Years US$ Outstanding, December 31, 2016 5,985,000 1.44 N/A 7.91 10,683 Granted 975,000 1.44 5.64 Forfeited (75,000) 1.44 N/A Outstanding, December 31, 2017 6,885,000 1.44 N/A 6.84 41,035 Vested and expected to vest at December 31, 2017 6,885,000 1.44 N/A 6.84 41,035 Exercisable at December 31, 2017 3,466,838 1.44 N/A 6.34 20,662 The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s ordinary share as of December 31, 2017 and the option’s respective exercise price. Total intrinsic value of options exercised for the years ended December 31, 2016 and 2017 was nil as no options were exercised. 5,709,509 95,307 2,802 The fair value of Service Options and Market Options were determined using the binomial option valuation model and Monte Carlo simulation model, respectively, with the assistance from an independent third-party appraiser. The option valuation models required the input of highly subjective assumptions, including the expected share price volatility and the suboptimal early exercise factor. For expected volatilities, the Company has made reference to historical volatilities of several comparable companies. The suboptimal early exercise factor was estimated based on the Company’s expectation of exercise behavior of the grantees. The risk-free rate for the period within the contractual life of the Options is based on the market yield of U.S. Treasury Bonds in effect at the time of grant. The estimated fair value of the ordinary shares, was determined with the assistance of an independent third-party appraiser. Subsequent to the IPO, fair value of the ordinary shares is the price of the Company’s publicly traded shares. The Company’s management is ultimately responsible for the determination of the estimated fair value of its ordinary shares. For the years ended December 31, 2016 2017 Risk-free interest rate 1.92%-2.23% 2.39%-2.93% Expected volatility range 48.1%-50.7% 47.5%-49.3% Suboptimal exercise factor 2.8 2.8 Fair value per ordinary share as at valuation date US$3.10-$3.26 US$7.07 2017 Share Incentive Plan In 2017, the Board of Directors approved the Share Incentive Plan (the “2017 Share Incentive Plan”), which has a term of 10 5,000,000 As at December 31, 2017, no options were granted under 2017 Share Incentive Plan. For the year ended December 31, 2017 RMB US$ Cost of revenues 17,063 2,622 Selling and marketing expenses 9,045 1,390 General and administrative expenses 69,199 10,636 Total 95,307 14,648 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 17. COMMITMENTS AND CONTINGENCIES Operating lease commitments RMB US$ 2018 156,549 24,061 2019 138,674 21,314 2020 115,381 17,734 2021 77,646 11,934 2022 and thereafter 147,673 22,697 635,923 97,740 Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases. The Group’s lease arrangements have no renewal options, rent escalation clauses, restrictions or contingent rents and are all executed with third parties. For the years ended December 31, 2015, 2016 and 2017, total rental expenses for all operating leases amounted to approximately RMB 110,958 121,530 136,662 19,683 Capital expenditure commitments The Group has commitments for the construction of leasehold improvements associated with its schools of RMB 3,085 474 Contingencies As of December 31, 2017, the Group is in the process of applying for private school operating permits or private non-enterprise entity registration certificates for several schools. In addition, some of the schools have not obtained fire safety approvals. An estimate for the reasonably possible loss or a range of reasonably possible losses associated with these contingencies cannot be made at this time. From time to time, the Group is also subject to legal proceedings, investigations, and claims incidental to the conduct of its business. The Group is currently not involved in any legal or administrative proceedings that may have a material adverse impact on the Group’s business, financial position or results of operations. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS)/ INCOME | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Comprehensive Income (Loss) Note [Text Block] | ACCUMULATED OTHER COMPREHENSIVE (LOSS)/ INCOME Foreign currency translation adjustments RMB Balance as of January 1, 2015 7,065 Foreign currency translation adjustments, net of tax of nil 21,124 Balance as of December 31, 2015 28,189 Foreign currency translation adjustments, net of tax of nil 22,275 Balance as of December 31, 2016 50,464 Foreign currency translation adjustments, net of tax of nil (10,424) Balance as of December 31, 2017 40,040 US$ Balance as of December 31, 2017 6,154 There have been no reclassifications out of accumulated other comprehensive income to net (loss)/income for the periods presented. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE COMPANY | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Financial Statements [Text Block] | 19. CONDENSED FINANCIAL INFORMATION OF THE COMPANY As at December 31, 2016 2017 2017 RMB RMB US$ ASSETS Current assets: Due from a subsidiary of the Group 145,416 22,350 Prepayments and other current assets 143 22 Total current assets 145,559 22,372 Non-current assets: Due from related parties 298,549 Investment in subsidiaries 111,661 184,707 28,389 Total non-current assets 410,210 184,707 28,389 Total assets 410,210 330,266 50,761 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accrued expenses and other liabilities 5,329 819 Advance from a subsidiary of the Group 3,010 14,806 2,276 Total current liabilities 3,010 20,135 3,095 Total liabilities 3,010 20,135 3,095 Shareholders’ equity: Ordinary shares (US$0.01 par value; 200,000,000 and 200,000,000 shares authorized, 100,000,000 and 110,000,000 shares issued and outstanding as of December 31, 2016 and 2017, respectively)) 6,120 6,782 1,042 Additional paid-in capital 452,369 532,474 81,840 Accumulated deficit (101,753) (269,165) (41,370) Accumulated other comprehensive loss 50,464 40,040 6,154 Total shareholders’ equity 407,200 310,131 47,666 Total liabilities and shareholders’ equity 410,210 330,266 50,761 For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Operating (loss)/income Equity in (loss)/profit of subsidiaries and the VIEs (48,332) 35,409 (54,676) (8,403) Interest income 22,047 18,514 6,702 1,030 (Loss)/income before income tax expense (26,285) 53,923 (47,974) (7,373) Income tax expense Net (loss)/income. (26,285) 53,923 (47,974) (7,373) Other comprehensive income, net of tax of nil Foreign currency translation adjustments 21,124 22,275 (10,424) (1,602) Other comprehensive income/(loss) 21,124 22,275 (10,424) (1,602) Comprehensive (loss)/income (5,161) 76,198 (58,398) (8,975) For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Net cash generated from investing activities 426,016 571,808 87,885 Net cash used in financing activities (426,016) (571,808) (87,885) Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (a) Basis of presentation For the Company only condensed financial information, the Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries” and share of their (loss)/income as “Equity in (loss)/ profit of subsidiaries and the VIEs” on the condensed statements of comprehensive (loss)/income. The subsidiaries and VIEs did not pay any dividends to the Company for the periods presented. (b) Commitments The Company does not have any significant commitments or long-term obligations as of any of the periods presented. The Company only condensed financial information should be read in conjunction with the Group’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). |
Consolidation, Policy [Policy Text Block] | Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, and the VIEs. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs have been eliminated upon consolidation. Results of subsidiaries, businesses acquired from third parties and the VIEs are consolidated from the date on which control is obtained by the Company. |
Use of Estimates, Policy [Policy Text Block] | The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include valuation allowance for deferred tax assets, uncertain tax positions, the initial valuation of the assets acquired and liabilities assumed in a business combination, economic lives and impairment of long-lived assets, impairment of goodwill, estimating the best estimate of selling price for each deliverable in the Group’s revenue arrangements, and share-based compensation. Actual results could differ from those estimates. |
Foreign Currency Convenience Translations [Policy Text Block] | Convenience translation Amounts in U.S. dollars are presented for the convenience of the reader and are translated at the noon buying rate of RMB 6.5063 |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency The functional currency of the Company and its non-PRC subsidiaries is the United States Dollars (“US$”). The Company’s PRC subsidiaries and the VIEs determined their functional currency to be Renminbi (the “RMB”). The Group uses the RMB as its reporting currency. Each entity in the Group maintains its financial records in its own functional currency. Transactions denominated in foreign currencies are measured at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are remeasured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are remeasured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of (loss)/income. The Company uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in accumulated other comprehensive income, a component of shareholders’ equity. |
Cash and Cash Equivalents, Unrestricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted cash Restricted cash primarily represents deposits held in a designated bank account as security for the interest payments on the Group’s long-term loan; and deposits restricted as to withdrawal or use under government regulations. |
Investment, Policy [Policy Text Block] | Short-term investments The Group’s short-term investments comprise primarily of cash deposits at floating rates based on daily bank deposit rates with original maturities ranging from over three months to six months. |
Inventory, Policy [Policy Text Block] | Inventories Inventories are finished goods and mainly comprised of textbooks and other educational study tools (“course materials”). Course materials are stated at the lower of cost or market. Cost is determined using the weighted average cost method. As of December 31, 2016 and 2017, the Group did not have any provision for inventories. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment Property and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is calculated on a straight line basis over the following estimated useful lives: Electronic equipment 3 Furniture 3 5 Vehicles 4 Leasehold improvements Shorter of the lease term or estimated useful life Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of (loss)/income. Direct costs that are related to the construction of property and equipment, and incurred in connection with bringing the assets to their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property and equipment, and the depreciation of these assets commences when the assets are ready for their intended use. |
Segment Reporting, Policy [Policy Text Block] | Segment reporting In accordance with ASC 280, Segment Reporting |
Non-controllinginterests [Policy Text Block] | Non-controlling interests For certain subsidiaries of the VIE, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Group. Consolidated net (loss)/income on the consolidated statements of (loss)/income includes the net loss attributable to non-controlling interests. The cumulative results of operations attributable to non-controlling interests are recorded as non-controlling interests in the Group’s consolidated balance sheets. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill The Group assesses goodwill for impairment in accordance with ASC 350-20, IntangiblesGoodwill and Other: Goodwill There was only one reporting unit (that also represented the operating segment) as of December 31, 2016 and 2017, respectively. Goodwill was allocated to the one reporting unit as of December 31, 2016 and 2017, respectively (Note 9). The Group has the option to assess qualitative factors first to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described above is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired and the Group is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Group must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible assets Intangible assets with finite lives are carried at cost less accumulated amortization. Amortization of finite-lived intangible assets except for student base is computed using the straight-line method over the estimated useful lives. Student base is amortized using an accelerated pattern based on the estimated student attrition rate of the acquired schools. The estimated useful lives of intangible assets from the date of purchase are as follows: Category Estimated Useful Life Courseware license 15 years Franchise agreements 2.5-3 years Student base 3-5 years Trademarks 10-15 years Purchased software 3-5 years Teaching course materials 10 years |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of long-lived assets other than goodwill The Group evaluates its long-lived assets, including fixed assets and intangible assets with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. For all periods presented, there was no impairment of any of the Company’s long-lived assets. |
Business Combinations Policy [Policy Text Block] | Business Combination We account for business combinations using the purchase method of accounting in accordance with ASC topic 805, Business Combinations In a business combination achieved in stages, we re-measured our previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings. The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. We determine discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets, forecasted life cycle and forecasted cash flows over that period. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair value of financial instruments Financial instruments include cash and cash equivalents, short-term investments, restricted cash, certain other current assets, accounts payable, long-term loan, customer advances, and certain other current liabilities. The carrying amounts of these financial instruments, except for the long-term loan, approximate their fair values because of their short-term maturities. The carrying amount of the long-term loan approximates its fair value due to the fact that the related interest rate approximates the interest rates currently offered by financial institutions for similar debt instruments of comparable maturities. |
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the selling price is fixed or determinable and collection is reasonably assured. The Group’s business is subject to business tax, value added taxes (“VAT”) and tax surcharges assessed by governmental authorities. Pursuant to ASC 605-45, Revenue RecognitionPrincipal Agent Considerations The primary sources of the Group’s revenues are as follows: (a) Educational programs Educational programs include English courses and related course materials. In accordance with ASC subtopic 605-25, Revenue Recognition: Multiple-Deliverable Revenue Arrangements Course fees are collected in full in advance of the commencement of each course and each course comprises of a fixed amount of classes. Course revenue is recognized ratably as the classes for the related course are delivered to the students. Students are allowed to return course materials if they are unused. However, once the student attends the first class of the respective course, course materials cannot be returned. Therefore, the Group recognizes revenue from the sale of course materials when the student attends the first class of the respective course. The amounts recognized for each deliverable is limited to the amount that is not contingent upon the delivery of additional deliverables or meeting other specified performance conditions. According to local education bureau regulations, depending on a school’s location and the amount of classes remaining for a course, the Group may be required to refund course fees for any remaining undelivered classes to students who withdraw from a course. The refund is recorded as a reduction of the related course fees received in advance and has no impact on recognized revenue. Refunds on recognized revenue were insignificant for all periods presented. The Group may issue promotional coupons to attract enrollment for its courses. The promotional coupons are not issued in conjunction with a concurrent revenue transaction and are for a fixed RMB amount that can only be redeemed to reduce the amount of the tuition fees for future courses. The promotional coupons are accounted for as a reduction of revenue when the corresponding revenue is recognized in accordance with ASC 605-50-45-2. (b) Franchise revenues Franchise revenues includes non-refundable initial franchise fees, which are recognized by the Group as revenue when substantially all services or conditions relating to the initial franchise fee have been performed, which is generally when a franchisee commences its operations under the RISE brand. The services to be performed under the franchise agreements to earn the initial franchise fees comprise of (i) authorizing franchisees to use the RISE brand and the Group’s courseware, and (ii) initial setup services, including assisting with site selection and marketing strategy, training of franchisee management and teachers. The Group’s franchise agreements do not include guarantees or other forms of financial assistance, refund provisions or options to repurchase franchises from franchisees. Initial franchise fees are deferred and recorded as “deferred revenue and customer advances” until these commitments and obligations have been performed, which is upon the franchisee commencing its operations under the RISE brand. The Group also receives recurring franchise fees from its franchisees, which include a fixed percentage of the franchisees’ course fees and proceeds from the sale of related course materials. The recurring franchise fees are recognized as franchise revenue as the fees are earned and realized. (c) Other revenues Other revenues comprises mainly of the provision of overseas study tours. The Group bears the risks and rewards, including customer acceptance of the services and has the right to unilaterally determine and change the study tour itinerary. The Group also sets the study tour prices charged to customers and independently selects travel service suppliers. Therefore, the Group is the primary obligor of the study tour service arrangement and recognizes revenue on a gross basis. Revenue from study tour services is recognized once the organized tour is completed in its entirety. |
Advertising Costs, Policy [Policy Text Block] | Advertising expenditures Advertising costs are expensed when incurred and are included in selling expenses in the consolidated statements of (loss)/income. For the years ended December 31, 2015, 2016 and 2017, advertising expenses were approximately RMB 39,397 63,734 80,475 12,369 |
Lessee, Leases [Policy Text Block] | Leases Leases are classified at the inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over their respective lease term. The Group leases certain office facilities under non-cancelable operating leases. Certain lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. |
Earnings Per Share, Policy [Policy Text Block] | (Loss)/income per share In accordance with ASC 260, Earnings Per Share |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Share-based compensation The Group applies ASC 718, Compensation Stock Compensation In accordance with ASC 718, the Group recognizes share-based compensation cost for equity awards to employees with a performance condition based on the probable outcome of that performance condition compensation cost is recognized if it is probable that the performance condition will be achieved and shall not be recognized if it is not probable that the performance condition will be achieved. In accordance with ASC 718, the effect of a market condition is reflected in the grant-date fair value of the granted equity awards. The Group recognizes share-based compensation cost for equity awards with a market condition provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. A change in any of the terms or conditions of the awards is accounted for as a modification of the award. When the vesting conditions (or other terms) of the equity awards granted to employees are modified, the Group first determines on the modification date whether the original vesting conditions were expected to be satisfied, regardless of the entity’s policy election for accounting for forfeitures. If the original vesting conditions are not expected to be satisfied, the grant-date fair value of the original equity awards are ignored and the fair value of the equity award measured at the modification date is recognized if the modified award ultimately vests. When a vesting condition that is probable of achievement is modified and the new vesting condition also is probable of achievement, the compensation cost to be recognized if either the original vesting condition or the new vesting condition is achieved cannot be less than the grant-date fair value of the original award. That compensation cost is recognized if either the original or modified vesting condition is achieved. Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the fair value of the awards and other pertinent factors at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period the modification occurs. For unvested awards, the Group recognizes over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Group recognizes is the cost of the original award. The Group uses the accelerated method for all awards granted with graded vesting service conditions, and the straight-line method for awards granted with non-graded vesting service conditions. The Group accounts for forfeitures as they occur. The Group, with the assistance of an independent third party valuation firm, determined the fair value of the stock options granted to employees. The binomial option pricing model was applied in determining the estimated fair value of the options granted to employees. |
Income Tax, Policy [Policy Text Block] | Income taxes The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes The Group accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties arising from underpayment of income taxes shall be computed in accordance with the related PRC tax law. The amount of interest expense is computed by applying the applicable statutory rate of interest to the difference between the tax position recognized and the amount previously taken or expected to be taken in a tax return. Interest and penalties recognized in accordance with ASC 740 are classified in the consolidated statements of (loss)/income as income tax expense. In accordance with the provisions of ASC 740, the Group recognizes in its consolidated financial statements the impact of a tax position if a tax return position or future tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group’s estimated liability for unrecognized tax benefits which is included in “other non-current liabilities” on the consolidated balance sheets is periodically assessed for adequacy and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements. Additionally, in future periods, changes in facts, circumstances, and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. |
Government subsidies [Policy Text Block] | Government subsidies Government subsidies primarily consist of financial subsidies received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. There are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. Government subsidies of non-operating nature and with no further conditions to be met are recorded as non-operating income in “Other income, net” of the consolidated statements of (loss)/income when received. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive (loss)/income Comprehensive (loss)/income is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income |
Employee Benefit Expenses [Policy Text Block] | Employee benefit expenses All eligible employees of the Group are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group has no further payment obligations once the contributions have been paid. The Group recorded employee benefit expenses of RMB 46,933 52,734 62,934 9,673 |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements In August 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-14, Revenue from Contracts with Customers-Deferral Revenue from Contracts with Customers Revenue from Contracts with CustomersPrincipal versus Agent Considerations Revenue from Contracts with CustomersIdentifying Performance Obligations and Licensing Revenue from Contracts with Customers Narrow-Scope Improvements and Practical Expedients Based on the contracts outstanding as of December 31, 2017, management expects that the cumulative catch-up adjustment upon adoption of ASC 606 relating to its educational programs, recurring franchise fees from its franchisees, and study tour services will not be material. However, based on management’s assessment, one area that is expected to have a significant impact is the Group’s recognition of initial franchise fees. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU 2016-07, InvestmentsEquity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”). ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. ASU 2016-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The adoption of ASU 2016-07 on January 1, 2017 is not expected to have a material effect on the Group’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments Statement of Cash Flows Statement of Cash Flows Restricted Cash In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying Definition of a Business In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , In May 2017, the FASB issued ASU 2017-09, CompensationStock Compensation (Topic 718): scope of Modification Accounting |
ORGANIZATION AND BASIS OF PRE29
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities [Table Text Block] | Percentage of equity interest attributable Date of Place of to the Name establishment establishment Company Principal activity Subsidiaries of the Company: RISE Education Cayman III Ltd (“Cayman III”) July 29, 2013 Cayman Islands 100 % Investment holding RISE Education Cayman I Ltd (“Cayman”) June 19, 2013 Cayman Islands 100 % Investment holding Rise IP (Cayman) Limited (“Rise IP”) July 24, 2013 Cayman Islands 100 % Educational consulting Edge Franchising Co., Limited (“Edge Franchising”) March 16, 2016 Hong Kong 100 % Educational consulting Bain Capital Rise Education (HK) Limited (“Rise HK”) June 24, 2013 Hong Kong 100 % Educational consulting Rise (Tianjin) Education Information Consulting Co., Ltd. (“Rise Tianjin” or “WFOE”) August 12, 2013 PRC 100 % Educational consulting VIE: Beijing Step Ahead Education Technology Development Co., Ltd. January 2, 2008 PRC Educational consulting VIE’s subsidiaries and school: Beijing Haidian District Step Ahead Training School September 18, 2008 PRC Language education Percentage of equity interest attributable Date of Place of to the Name establishment establishment Company Principal activity Beijing Shijingshan District Step Ahead Training School July 14, 2009 PRC Language education Beijing Changping District Step Ahead Training School July 3, 2009 PRC Language education Beijing Chaoyang District Step Ahead Training School July 20, 2009 PRC Language education Beijing Xicheng District RISE Immersion Subject English Training School February 5, 2010 PRC Language education Beijing Dongcheng District RISE Immersion Subject English Training School July 30, 2010 PRC Language education Beijing Tongzhou District RISE Immersion Subject English Training School April 19, 2011 PRC Language education Beijing Daxing District RISE Immersion Subject English Training School March 31, 2013 PRC Language education Beijing Fengtai District Step Ahead Training School February 28, 2012 PRC Language education Shanghai Boyu Investment Management Co., Ltd. January 29, 2012 PRC Language education Shanghai Riverdeep Education Information Consulting Co., Ltd. March 8, 2010 PRC Educational consulting services Shanghai Huangpu District RISE Immersion Subject English Training School June 17, 2011 PRC Language education Guangzhou Ruisi Education Technology Development Co., Ltd. August 17, 2012 PRC Training services Guangzhou Yuexiu District RISE Immersion Subject English Training School April 29, 2014 PRC Language education Guangzhou Haizhu District RISE Immersion Subject English Training School-Chigang December 8, 2014 PRC Language education Guangzhou Tianhe District RISE Immersion Subject English Training School July 11, 2017 PRC Language education Percentage of equity interest attributable Date of Place of to the Name establishment establishment Company Principal activity Shenzhen Mei Ruisi Education Management Co., Ltd. February 28, 2014 PRC Training services Shenzhen Futian District Rise Training Center January 8, 2015 PRC Language education Shenzhen Nanshan District Rise Training Center May 26, 2015 PRC Language education Shenzhen Luohu District Rise Training Center August 3, 2017 PRC Language education Wuxi Rise Foreign Language Training Co., Ltd. June 5, 2013 PRC Training services The following financial statement balances and amounts of the VIEs were included in the accompanying consolidated financial statements: As at December 31, 2016 2017 2017 RMB RMB US$ Cash and cash equivalents 437,594 654,777 100,637 Restricted cash 5,609 10,441 1,605 Accounts receivable, net 1,364 210 Inventories 1,605 1,952 300 Prepayments and other current assets 38,297 32,621 5,014 Amounts due from the Group’s subsidiaries 63,897 106,748 16,406 Total current assets 547,002 807,903 124,172 Property and equipment, net 67,601 92,803 14,264 Intangible assets, net 1,740 1,060 163 Goodwill 145,781 145,781 22,406 Deferred tax assets 4,087 2,404 369 Other non-current assets 23,564 31,681 4,869 Total non-current assets 242,773 273,729 42,071 Total assets 789,775 1,081,632 166,243 Accounts payable 1,484 3,168 487 Accrued expenses and other liabilities 76,418 100,156 15,394 Deferred revenue and customer advances 581,215 776,052 119,277 Income taxes payable 1,329 18,254 2,806 Amounts due to the Group’s subsidiaries 49,007 67,990 10,449 Total current liabilities 709,453 965,620 148,413 Deferred tax liabilities 2,527 Other non-current liabilities 1,744 2,682 412 Total non-current liabilities 4,271 2,682 412 Total liabilities 713,724 968,302 148,825 For the Years ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Revenues 503,256 673,264 912,166 140,197 Net (loss)/income (51,138) (24,532) 24,771 3,807 Net cash provided by operating activities 99,499 49,586 263,813 40,547 Net cash used in investing activities (34,116) (26,792) (46,630) (7,167) |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of November 1, 2017, the date of acquisition: RMB US$ Purchase consideration 25,980 3,993 Net assets acquired, excluding intangible assets and the related deferred tax liabilities 2,133 329 Intangible assets 4,994 767 Trademark 1,693 260 Student base 2,962 455 Franchise agreements 339 52 Deferred tax liabilities (1,235) (190) Deferred revenue and customer advances (10,663) (1,639) Goodwill 30,751 4,726 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Revenue [Abstract] | |
Revenue Recognition, Multiple-deliverable Arrangements [Table Text Block] | For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Educational programs 451,411 618,326 831,106 127,739 Franchise revenues (a) 60,793 63,532 100,013 15,372 Others 17,265 29,135 38,156 5,864 529,469 710,993 969,275 148,975 (a) Initial franchise fees amounted to RMB 16,518 15,566 23,302 3,581 44,275 47,966 76,711 11,791 |
PREPAYMENTS AND OTHER CURRENT32
PREPAYMENTS AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Prepaid expenses and other current assets consisted of the following: As at December 31, 2016 2017 2017 RMB RMB US$ Prepayments to suppliers 16,414 12,820 1,970 Prepaid rental expense 10,735 11,924 1,833 Staff advances 1,684 1,762 271 Deposits 7,625 10,411 1,600 Prepaid business tax, VAT and other surcharges 8,083 1,528 235 Other receivables 976 2,126 327 45,517 40,571 6,236 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | As at December 31, 2016 2017 2017 RMB RMB US$ Electronic equipment 35,464 40,740 6,262 Furniture 7,350 8,643 1,328 Vehicles 1,168 1,168 179 Leasehold improvements 141,253 185,922 28,576 185,235 236,473 36,345 Less: accumulated depreciation 109,562 136,296 20,948 Property and equipment, net 75,673 100,177 15,397 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The Group’s intangible assets were all acquired and consisted of the following: As at December 31, 2016 2017 2017 RMB RMB US$ Costs: Courseware license 213,509 200,079 30,752 Franchise agreements 60,800 61,133 9,396 Student base 91,960 94,875 14,582 Trademarks 48,419 47,040 7,230 Purchased software 14,101 16,783 2,579 Teaching course materials 10,786 10,747 1,652 439,575 430,657 66,191 Accumulated amortization: Courseware license (46,261) (56,862) (8,740) Franchise agreements (60,800) (60,818) (9,348) Student base (90,916) (91,875) (14,121) Trademarks (10,490) (12,893) (1,982) Purchased software (3,041) (4,420) (678) Teaching course materials (2,116) (3,174) (488) (213,624) (230,042) (35,357) Net carrying amount 225,951 200,615 30,834 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Balance as of January 1, 2016 444,412 Goodwill acquired Impairment losses Foreign exchange effect 17,274 Balance as of December 31, 2016 461,686 Goodwill acquired in business combination (note 4) 30,751 Impairment losses Foreign exchange effect (16,705) Balance as of December 31, 2017 475,732 Balance as of December 31, 2017 (US$) 73,119 |
ACCRUED EXPENSES AND OTHER CU36
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accrued expenses and other liabilities consisted of the following: As at December 31, 2016 2017 2017 RMB RMB US$ Payroll and welfare payable 47,221 78,263 12,029 Business tax, VAT and surcharges payable 2,205 8,995 1,383 Interest payable 897 1,608 247 Accrued expenses 35,758 41,553 6,386 Accrual for purchase of property and equipment 7,292 9,241 1,420 Payable for acquisition consideration (note 4) 25,626 3,939 Others 2,785 5,813 894 96,158 171,099 26,298 |
LONG-TERM LOAN (Tables)
LONG-TERM LOAN (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt [Table Text Block] | US$ September 12, 2019 12,000,000 September 12, 2020 19,250,000 September 12, 2021 24,750,000 September 12, 2022 44,000,000 100,000,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | (Loss)/ income before income taxes consists of: For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ PRC (63,513) 43,995 14,121 2,170 Non-PRC 30,653 39,050 (14,797) (2,274) (32,860) 83,045 (676) (104) |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The current and deferred portions of income tax benefit/(expense) included in the consolidated statements of (loss)/income are as follows: For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Current income tax expense (10,878) (36,965) (51,773) (7,957) Deferred income tax benefit/(expense) 11,997 4,763 (1,151) (177) Income tax benefit/(expense) 1,119 (32,202) (52,924) (8,134) |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The reconciliation of the income tax expense for the years ended December 31, 2015, 2016 and 2017 is as follows: For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ (Loss)/income before income tax (32,860) 83,045 (676) (104) Income tax benefit/(expense) computed at the PRC statutory tax rate of 25% 8,215 (20,761) 169 26 Effect of different tax rates in different jurisdictions 4,557 5,688 (8,175) (1,256) Non-deductible expenses (2,352) (9,051) (26,482) (4,071) Outside basis difference on investment in WFOE (3,174) (4,446) (683) PRC royalty withholding tax (4,177) (4,607) (6,950) (1,068) Changes in valuation allowance (5,124) (297) (7,040) (1,082) Income tax benefit/(expense) 1,119 (32,202) (52,924) (8,134) |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | For the year ended December 31, 2016 2017 2017 RMB RMB US$ Deferred tax assets: Tax loss carry forward 32,601 34,111 5,243 Accrued expenses 4,590 6,638 1,020 Others 1,422 1,971 303 Less: Valuation allowance (25,491) (32,002) (4,919) 13,122 10,718 1,647 Deferred tax liabilities: Long-lived assets arising from acquisitions 1,094 168 Outside basis difference on investment in WFOE 3,174 7,620 1,171 Revenue recognition 8,931 3,385 521 12,105 12,099 1,860 Presentation in the consolidated balance sheets: Deferred tax assets 4,087 2,404 369 Deferred tax liabilities (3,070) (3,785) (582) Net deferred tax assets/(liabilities) 1,017 (1,381) (213) |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: 2016 2017 2017 RMB RMB US$ Balance at January 1, 8,843 9,124 1,402 Additions based on tax positions related to current year 281 738 113 Settlement (1,063) (163) Balance at December 31, 9,124 8,799 1,352 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | b) During the year ended December 31, 2015, 2016 and 2017, the Group had the following related party transactions: For the year ended December31, Notes 2015 2016 2017 2017 RMB RMB RMB US$ Loan to a related party: Lionbridge (i) 200,000 280,000 150,000 23,055 Fees paid to related parties: Mai Rui (ii) 705 278 - - Bain Advisors (iii) 6,200 6,200 38,537 5,923 (i) The Group entered into certain entrustment loan agreements with Lionbridge, pursuant to which the Group granted total loans of RMB 280,000 150,000 23,055 Year ended December 31, 2016 Loan granted Principal Interest Rate Period Loan 1 200,000 10 % March 10, 2015 to November 30, 2015 Loan 2 200,000 9 % March 30, 2016 to November 30, 2016 Loan 3 30,000 5 % July 8, 2016 to December 8, 2016 Loan 4 50,000 6 % July 8, 2016 to December 8, 2016 Year ended December 31, 2017 Loan granted Principal Interest Rate Period Loan 1 100,000 7 % February 24, 2017 to November 30, 2017 Loan 2 50,000 7 % March 20, 2017 to November 30, 2017 As of December 31, 2016 and 2017, respectively, the above loans were fully repaid. Interest income of RMB 12,712 7,457 1,146 (ii) During the years ended December 31, 2015, 2016 and 2017, the Group paid course development fees of RMB 705 278 (iii) During the years ended December 31, 2015, 2016 and 2017, the Group paid consulting fees of RMB 6,200 6,200 38,537 5,923 33,887 5,208 20,000 3,074 (iv) On November 1, 2017, the Group acquired Edge Business from a seller in which a managing director of Bain Capital is a director and minority shareholder. (Note 4) c) The balances between the Group and its related parties as of December 31, 2016 and 2017 are listed below: |
Schedule Of Due From Related Parties [Table Text Block] | (1) Amounts due from a related party As at December 31, 2016 2017 2017 RMB RMB US$ Bain Capital Education IV 6,604 1,015 |
Schedule Of Due To Related Parties [Table Text Block] | (2) Amounts due to a related party As at December 31, 2016 2017 2017 RMB RMB US$ Bain Advisors 20,000 3,074 |
(LOSS)_INCOME PER SHARE (Tables
(LOSS)/INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic and diluted (loss)/income per share for each of the years presented are calculated as follows: For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Numerator: Net (loss)/income attributable to RISE Education Cayman Ltdbasic and diluted (26,285) 53,923 (47,974) (7,373) Denominator: Weighted average number of ordinary shares outstanding- basic and diluted 100,000,000 100,000,000 101,890,411 Basic and diluted (loss)/income per share (0.26) 0.54 (0.47) (0.07) |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | Weighted - Weighted- Weighted- average average average remaining Aggregate Number of exercise grant- date contractual intrinsic options price fair value term Value US$ US$ Years US$ Outstanding, December 31, 2016 5,985,000 1.44 N/A 7.91 10,683 Granted 975,000 1.44 5.64 Forfeited (75,000) 1.44 N/A Outstanding, December 31, 2017 6,885,000 1.44 N/A 6.84 41,035 Vested and expected to vest at December 31, 2017 6,885,000 1.44 N/A 6.84 41,035 Exercisable at December 31, 2017 3,466,838 1.44 N/A 6.34 20,662 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | The assumptions used to estimate the fair value of 2016 Equity Incentive Plan granted are as follows: For the years ended December 31, 2016 2017 Risk-free interest rate 1.92%-2.23% 2.39%-2.93% Expected volatility range 48.1%-50.7% 47.5%-49.3% Suboptimal exercise factor 2.8 2.8 Fair value per ordinary share as at valuation date US$3.10-$3.26 US$7.07 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | Total cost of share-based payments are summarized as follows: For the year ended December 31, 2017 RMB US$ Cost of revenues 17,063 2,622 Selling and marketing expenses 9,045 1,390 General and administrative expenses 69,199 10,636 Total 95,307 14,648 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Disclosure [Table Text Block] | The Group leases offices and classroom facilities under operating leases. Future minimum lease payments under non-cancelable operating leases with initial terms in excess of one year consist of the following as of December 31, 2017: RMB US$ 2018 156,549 24,061 2019 138,674 21,314 2020 115,381 17,734 2021 77,646 11,934 2022 and thereafter 147,673 22,697 635,923 97,740 |
ACCUMULATED OTHER COMPREHENSI43
ACCUMULATED OTHER COMPREHENSIVE (LOSS)/ INCOME (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Foreign currency translation adjustments RMB Balance as of January 1, 2015 7,065 Foreign currency translation adjustments, net of tax of nil 21,124 Balance as of December 31, 2015 28,189 Foreign currency translation adjustments, net of tax of nil 22,275 Balance as of December 31, 2016 50,464 Foreign currency translation adjustments, net of tax of nil (10,424) Balance as of December 31, 2017 40,040 US$ Balance as of December 31, 2017 6,154 |
CONDENSED FINANCIAL INFORMATI44
CONDENSED FINANCIAL INFORMATION OF THE COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Balance Sheet [Table Text Block] | Condensed Balance Sheets As at December 31, 2016 2017 2017 RMB RMB US$ ASSETS Current assets: Due from a subsidiary of the Group 145,416 22,350 Prepayments and other current assets 143 22 Total current assets 145,559 22,372 Non-current assets: Due from related parties 298,549 Investment in subsidiaries 111,661 184,707 28,389 Total non-current assets 410,210 184,707 28,389 Total assets 410,210 330,266 50,761 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accrued expenses and other liabilities 5,329 819 Advance from a subsidiary of the Group 3,010 14,806 2,276 Total current liabilities 3,010 20,135 3,095 Total liabilities 3,010 20,135 3,095 Shareholders’ equity: Ordinary shares (US$0.01 par value; 200,000,000 and 200,000,000 shares authorized, 100,000,000 and 110,000,000 shares issued and outstanding as of December 31, 2016 and 2017, respectively)) 6,120 6,782 1,042 Additional paid-in capital 452,369 532,474 81,840 Accumulated deficit (101,753) (269,165) (41,370) Accumulated other comprehensive loss 50,464 40,040 6,154 Total shareholders’ equity 407,200 310,131 47,666 Total liabilities and shareholders’ equity 410,210 330,266 50,761 |
Condensed Statement of Comprehensive Income [Table Text Block] | Condensed Statements of Comprehensive (Loss)/Income For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Operating (loss)/income Equity in (loss)/profit of subsidiaries and the VIEs (48,332) 35,409 (54,676) (8,403) Interest income 22,047 18,514 6,702 1,030 (Loss)/income before income tax expense (26,285) 53,923 (47,974) (7,373) Income tax expense Net (loss)/income. (26,285) 53,923 (47,974) (7,373) Other comprehensive income, net of tax of nil Foreign currency translation adjustments 21,124 22,275 (10,424) (1,602) Other comprehensive income/(loss) 21,124 22,275 (10,424) (1,602) Comprehensive (loss)/income (5,161) 76,198 (58,398) (8,975) |
Condensed Cash Flow Statement [Table Text Block] | Statements of Cash Flows For the year ended December 31, 2015 2016 2017 2017 RMB RMB RMB US$ Net cash generated from investing activities 426,016 571,808 87,885 Net cash used in financing activities (426,016) (571,808) (87,885) Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year |
ORGANIZATION AND BASIS OF PRE45
ORGANIZATION AND BASIS OF PRESENTATION (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Beijing Step Ahead Education Technology Development Co., Ltd. [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Jan. 2, 2008 |
Placeof establishment Of Subsidiary | PRC |
Noncontrolling Interest, Ownership Percentage by Parent | 0.00% |
Minority Interest Principal Activity | Educational consulting |
Beijing Haidian District Step Ahead Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Sep. 18, 2008 |
Placeof establishment Of Subsidiary | PRC |
Noncontrolling Interest, Ownership Percentage by Parent | 0.00% |
Minority Interest Principal Activity | Language education |
Beijing Shijingshan District Step Ahead Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jul. 14, 2009 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Beijing Changping District Step Ahead Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jul. 3, 2009 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Beijing Chaoyang District Step Ahead Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jul. 20, 2009 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Beijing Xicheng District RISE Immersion Subject English Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Feb. 5, 2010 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Beijing Dongcheng District RISE Immersion Subject English Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jul. 30, 2010 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Beijing Tongzhou District RISE Immersion Subject English Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Apr. 19, 2011 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Beijing Daxing District RISE Immersion Subject English Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Mar. 31, 2013 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Beijing Fengtai District Step Ahead Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Feb. 28, 2012 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Shanghai Boyu Investment Management Co., Ltd. [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jan. 29, 2012 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Shanghai Riverdeep Education Information Consulting Co., Ltd. [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Mar. 8, 2010 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Educational consulting services |
Shanghai Huangpu District RISE Immersion Subject English Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jun. 17, 2011 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Guangzhou Ruisi Education Technology Development Co., Ltd. [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Aug. 17, 2012 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Training services |
Guangzhou Yuexiu District RISE Immersion Subject English Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Apr. 29, 2014 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Guangzhou Haizhu District RISE Immersion Subject English Training School-Chigang [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Dec. 8, 2014 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Shenzhen Mei Ruisi Education Management Co., Ltd. [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Feb. 28, 2014 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Training services |
Shenzhen Futian District Rise Training Center [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jan. 8, 2015 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Shenzhen Nanshan District Rise Training Center [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | May 26, 2015 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Wuxi Rise Foreign Language Training Co., Ltd. [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jun. 5, 2013 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Training services |
Guangzhou Tianhe District RISE Immersion Subject English Training School [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Jul. 11, 2017 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
Shenzhen Luohu District Rise Training Center [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Aug. 3, 2017 |
Variable Interest Entity, Qualitative or Quantitative Information, Place Of Establishment | PRC |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.00% |
Variable Interest Entity, Qualitative or Quantitative Information, Activities of VIE | Language education |
RISE Education Cayman III Ltd [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Jul. 29, 2013 |
Placeof establishment Of Subsidiary | Cayman Islands |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Minority Interest Principal Activity | Investment holding |
RISE Education Cayman I Ltd [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Jun. 19, 2013 |
Placeof establishment Of Subsidiary | Cayman Islands |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Minority Interest Principal Activity | Investment holding |
Rise IP Cayman Limited [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Jul. 24, 2013 |
Placeof establishment Of Subsidiary | Cayman Islands |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Minority Interest Principal Activity | Educational consulting |
Bain Capital Rise Education HK Limited [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Jun. 24, 2013 |
Placeof establishment Of Subsidiary | Hong Kong |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Minority Interest Principal Activity | Educational consulting |
Rise Tianjin Education Information Consulting Co., Ltd. [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Aug. 12, 2013 |
Placeof establishment Of Subsidiary | PRC |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Minority Interest Principal Activity | Educational consulting |
Edge Franchising Co Limited Edge Franchising [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Dateof establishment Of Subsidiary | Mar. 16, 2016 |
Placeof establishment Of Subsidiary | Hong Kong |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Minority Interest Principal Activity | Educational consulting |
ORGANIZATION AND BASIS OF PRE46
ORGANIZATION AND BASIS OF PRESENTATION (Details 1) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Current | ¥ 807,903 | ¥ 547,002 | $ 124,172 | ||
Variable Interest Entity, Consolidated, Assets, Noncurrent | 273,729 | 242,773 | 42,071 | ||
Total asset | 1,081,632 | 789,775 | 166,243 | ||
Variable Interest Entity, Consolidated, Liabilities, Current | 965,620 | 709,453 | 148,413 | ||
Variable Interest Entity, Consolidated, Liabilities, Noncurrent | 2,682 | 4,271 | 412 | ||
Total liabilities | 968,302 | 713,724 | 148,825 | ||
Revenues | 912,166 | $ 140,197 | 673,264 | ¥ 503,256 | |
Net (loss)/income | 24,771 | 3,807 | (24,532) | (51,138) | |
Net cash provided by operating activities | 263,813 | 40,547 | 49,586 | 99,499 | |
Net cash used in investing activities | (46,630) | $ (7,167) | (26,792) | ¥ (34,116) | |
Cash and cash equivalents | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Current | 654,777 | 437,594 | 100,637 | ||
Restricted cash | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Current | 10,441 | 5,609 | 1,605 | ||
Inventories | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Current | 1,952 | 1,605 | 300 | ||
Accounts receivable, net | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Current | 1,364 | 0 | 210 | ||
Prepayments and other current assets | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Current | 32,621 | 38,297 | 5,014 | ||
Amounts due from the Group's subsidiaries | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Current | 106,748 | 63,897 | 16,406 | ||
Property and equipment, net | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Noncurrent | 92,803 | 67,601 | 14,264 | ||
Intangible assets, net | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Noncurrent | 1,060 | 1,740 | 163 | ||
Goodwill | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Noncurrent | 145,781 | 145,781 | 22,406 | ||
Deferred tax assets | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Noncurrent | 2,404 | 4,087 | 369 | ||
Other non current assets | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Assets, Noncurrent | 31,681 | 23,564 | 4,869 | ||
Accounts payable | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Liabilities, Current | 3,168 | 1,484 | 487 | ||
Accrued expenses and other liabilities | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Liabilities, Current | 100,156 | 76,418 | 15,394 | ||
Deferred revenue and customer advances | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Liabilities, Current | 776,052 | 581,215 | 119,277 | ||
Income taxes payable | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Liabilities, Current | 18,254 | 1,329 | 2,806 | ||
Amounts due to the Group's subsidiaries | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Liabilities, Current | 67,990 | 49,007 | 10,449 | ||
Deferred tax liabilities | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Liabilities, Noncurrent | 0 | 2,527 | 0 | ||
Other non current liabilities | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Variable Interest Entity, Consolidated, Liabilities, Noncurrent | ¥ 2,682 | ¥ 1,744 | $ 412 |
ORGANIZATION AND BASIS OF PRE47
ORGANIZATION AND BASIS OF PRESENTATION (Details Textual) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Oct. 31, 2017CNY (¥) | Oct. 31, 2017USD ($) | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Payments of Stock Issuance Costs | ¥ 0 | $ 0 | |||||
Proceeds from Issuance Initial Public Offering | ¥ 437,829 | $ 67,293 | ¥ 0 | ¥ 0 | |||
Deferred Offering Costs | ¥ 42,012 | $ 6,457 | |||||
General and Administrative Expense [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Payments of Stock Issuance Costs | ¥ 0 | $ 0 | |||||
Common Stock [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 10,000,000 | 10,000,000 | |||||
American Depositary Shares [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 5,000,000 | 5,000,000 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Percentage Of Entity Revenue | 94.00% | 94.00% | 95.00% | 95.00% |
SIGNIFICANT ACCOUNTING POLICI48
SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Electronic equipment [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles [Member] | |
Property, Plant and Equipment, Useful Life | 4 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | Shorter of the lease term or estimated useful life |
SIGNIFICANT ACCOUNTING POLICI49
SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Dec. 31, 2017 | |
Courseware license [Member] | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Teaching course materials [Member] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Maximum [Member] | Franchise agreements [Member] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Maximum [Member] | Trademarks [Member] | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Maximum [Member] | Student base [Member] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Maximum [Member] | Purchased software [Member] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Minimum [Member] | Franchise agreements [Member] | |
Finite-Lived Intangible Asset, Useful Life | 2 years 6 months |
Minimum [Member] | Trademarks [Member] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Minimum [Member] | Student base [Member] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Minimum [Member] | Purchased software [Member] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
SIGNIFICANT ACCOUNTING POLICI50
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Foreign Currency Exchange Rate, Translation | 6.5063 | 6.5063 | ||
Advertising Expense | ¥ 80,475 | $ 12,369 | ¥ 63,734 | ¥ 39,397 |
Description of Lessee Leasing Arrangements, Capital Leases | a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. | a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. | ||
Employee Benefits and Share-based Compensation | ¥ 62,934 | $ 9,673 | ¥ 52,734 | ¥ 46,933 |
Percentage Of Decrease Accumulated Deficit | 4.00% | 4.00% |
CONCENTRATION OF RISKS (Details
CONCENTRATION OF RISKS (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017USD ($) | |
Debt Instrument, Interest Rate, Increase (Decrease) | 1.00% | 1.00% | |||
Increase (Decrease) in Interest Payable, Net | ¥ 6,506 | $ 1,000 | |||
Foreign Currency Exchange Depreciation Rate | 6.70% | 6.70% | 6.40% | 5.80% | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | ¥ 878,468 | $ 135,018 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Goodwill | ¥ 475,732 | $ 73,119 | ¥ 461,686 | ¥ 444,412 | |
Edge Learning Centers [Member] | |||||
Purchase consideration | 25,980 | $ 3,993 | |||
Net assets acquired, excluding intangible assets and the related deferred tax liabilities | 2,133 | 329 | |||
Intangible assets | 4,994 | 767 | |||
Trademark | 1,693 | 260 | |||
Student base | 2,962 | 455 | |||
Franchise agreements | 339 | 52 | |||
Deferred tax liabilities | (1,235) | (190) | |||
Deferred revenue and customer advances | (10,663) | (1,639) | |||
Goodwill | ¥ 30,751 | $ 4,726 |
BUSINESS COMBINATION (Details T
BUSINESS COMBINATION (Details Textual) - Edge Learning Centers [Member] ¥ in Thousands, $ in Thousands | Nov. 01, 2017CNY (¥)shares | Nov. 01, 2017USD ($)shares | Dec. 31, 2017 | Nov. 01, 2017USD ($) |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | ||
Business Combination, Consideration Transferred, Liabilities Incurred | ¥ 16,769 | $ 2,540 | ||
Stock Issued During Period, Shares, Acquisitions | 216,021 | 216,021 | ||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | ¥ 9,211 | $ 1,395 | ||
Business Combination, Goodwill Recognized, Description | Included in the goodwill of RMB30,261(US$4,651) recognized above is the expected synergies from combining operations of the Acquiree and the Group which does not qualify for separate recognition. None of the goodwill recognized is expected to be deductible for income tax purposes. | |||
Business Acquisition, Transaction Costs | ¥ 889 | $ 137 |
REVENUES (Details)
REVENUES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | ||
Revenue Recognition [Abstract] | |||||
Educational programs | ¥ 831,106 | $ 127,739 | ¥ 618,326 | ¥ 451,411 | |
Franchise revenues | [1] | 100,013 | 15,372 | 63,532 | 60,793 |
Others | 38,156 | 5,864 | 29,135 | 17,265 | |
Revenues | ¥ 969,275 | $ 148,975 | ¥ 710,993 | ¥ 529,469 | |
[1] | Initial franchise fees amounted to RMB16,518, RMB15,566, and RMB23,302 (US$3,581), and recurring franchise fees amounted to RMB44,275, RMB47,966, and RMB76,711 (US$11,791) for the years ended December 31, 2015, 2016 and 2017, respectively. |
REVENUES (Details Textual)
REVENUES (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Revenue Recognition [Abstract] | ||||
Initial Franchise Fees | ¥ 23,302 | $ 3,581 | ¥ 15,566 | ¥ 16,518 |
Recurring franchise fees | ¥ 76,711 | $ 11,791 | ¥ 47,966 | ¥ 44,275 |
PREPAYMENTS AND OTHER CURRENT56
PREPAYMENTS AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepayments to suppliers | ¥ 12,820 | $ 1,970 | ¥ 16,414 |
Prepaid rental expense | 11,924 | 1,833 | 10,735 |
Staff advances | 1,762 | 271 | 1,684 |
Deposits | 10,411 | 1,600 | 7,625 |
Prepaid business tax, VAT and other surcharges | 1,528 | 235 | 8,083 |
Other receivables | 2,126 | 327 | 976 |
Prepaid Expense and Other Assets, Current | ¥ 40,571 | $ 6,236 | ¥ 45,517 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | ¥ 236,473 | $ 36,345 | ¥ 185,235 |
Less: accumulated depreciation | 136,296 | 20,948 | 109,562 |
Property and equipment, net | 100,177 | 15,397 | 75,673 |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 40,740 | 6,262 | 35,464 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 8,643 | 1,328 | 7,350 |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 1,168 | 179 | 1,168 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | ¥ 185,922 | $ 28,576 | ¥ 141,253 |
PROPERTY AND EQUIPMENT, NET (58
PROPERTY AND EQUIPMENT, NET (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | ¥ 29,246 | $ 4,495 | ¥ 29,634 | ¥ 26,128 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | ¥ 430,657 | $ 66,191 | ¥ 439,575 |
Finite-Lived Intangible Assets, Accumulated Amortization | (230,042) | (35,357) | (213,624) |
Net carrying amount | 200,615 | 30,834 | 225,951 |
Computer Software, Intangible Asset [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 200,079 | 30,752 | 213,509 |
Finite-Lived Intangible Assets, Accumulated Amortization | (56,862) | (8,740) | (46,261) |
Franchise Rights [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 61,133 | 9,396 | 60,800 |
Finite-Lived Intangible Assets, Accumulated Amortization | (60,818) | (9,348) | (60,800) |
Student base [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 94,875 | 14,582 | 91,960 |
Finite-Lived Intangible Assets, Accumulated Amortization | (91,875) | (14,121) | (90,916) |
Trademarks [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 47,040 | 7,230 | 48,419 |
Finite-Lived Intangible Assets, Accumulated Amortization | (12,893) | (1,982) | (10,490) |
Acquired Software [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 16,783 | 2,579 | 14,101 |
Finite-Lived Intangible Assets, Accumulated Amortization | (4,420) | (678) | (3,041) |
Teaching course materials [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 10,747 | 1,652 | 10,786 |
Finite-Lived Intangible Assets, Accumulated Amortization | ¥ (3,174) | $ (488) | ¥ (2,116) |
INTANGIBLE ASSETS, NET (Detai60
INTANGIBLE ASSETS, NET (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | ¥ 21,454 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 19,812 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 19,366 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 19,080 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 19,080 | |||
Amortization of Intangible Assets | ¥ 20,465 | $ 3,145 | ¥ 40,188 | ¥ 65,379 |
GOODWILL (Details)
GOODWILL (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Beginning Balance | ¥ 461,686 | ¥ 444,412 | |
Goodwill acquired | 30,751 | 0 | |
Impairment losses | 0 | 0 | |
Foreign exchange effect | (16,705) | 17,274 | |
Ending Balance | ¥ 475,732 | $ 73,119 | ¥ 461,686 |
ACCRUED EXPENSES AND OTHER CU62
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Payables and Accruals [Abstract] | |||
Payroll and welfare payable | ¥ 78,263 | $ 12,029 | ¥ 47,221 |
Business tax, VAT and surcharges payable | 8,995 | 1,383 | 2,205 |
Interest payable | 1,608 | 247 | 897 |
Accrued expenses | 41,553 | 6,386 | 35,758 |
Accrual for purchase of property and equipment | 9,241 | 1,420 | 7,292 |
Payable for acquisition consideration | 25,626 | 3,939 | 0 |
Others | 5,813 | 894 | 2,785 |
Accounts Payable and Accrued Liabilities, Current | ¥ 171,099 | $ 26,298 | ¥ 96,158 |
LONG-TERM LOAN (Details)
LONG-TERM LOAN (Details) | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
September 12, 2019 | $ 12,000,000 |
September 12, 2020 | 19,250,000 |
September 12, 2021 | 24,750,000 |
September 12, 2022 | 44,000,000 |
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 100,000,000 |
LONG-TERM LOAN (Details Textual
LONG-TERM LOAN (Details Textual) ¥ in Thousands | Mar. 12, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Jul. 31, 2017CNY (¥) | Jul. 31, 2017USD ($) |
Short-term Debt [Line Items] | |||||||
Debt Instrument, Collateral Amount | ¥ 18,472 | $ 2,839,000 | |||||
Repayments of Lines of Credit | $ 10,000,000 | ||||||
September 12, 2019 | 12,000,000 | ||||||
September 12, 2020 | 19,250,000 | ||||||
September 12, 2021 | 24,750,000 | ||||||
September 12, 2022 | $ 44,000,000 | ||||||
Subsequent Event [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Repayments of Long-term Debt | $ 12,000,000 | ||||||
September 12, 2019 | 13,750,000 | ||||||
September 12, 2020 | 19,250,000 | ||||||
September 12, 2021 | 24,750,000 | ||||||
September 12, 2022 | $ 30,250,000 | ||||||
Loan Facility Agreement [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 55,000,000 | ||||||
Debt Issuance Costs, Net | ¥ 11,559 | $ 1,705,000 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.05% | 4.05% | |||||
Amendment Facility Agreement [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 110,000,000 | ||||||
Debt Instrument, Term | 5 years | ||||||
Amendment Facility Agreement [Member] | Minimum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | 2.00% | |||||
Amendment Facility Agreement [Member] | Maximum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | 3.50% |
INCOME TAXES (Details)
INCOME TAXES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Income Tax Disclosure [Abstract] | ||||
PRC | ¥ 14,121 | $ 2,170 | ¥ 43,995 | ¥ (63,513) |
Non-PRC | (14,797) | (2,274) | 39,050 | 30,653 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | ¥ (676) | $ (104) | ¥ 83,045 | ¥ (32,860) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Income Tax Disclosure [Abstract] | ||||
Current income tax expense | ¥ (51,773) | $ (7,957) | ¥ (36,965) | ¥ (10,878) |
Deferred income tax benefit/(expense) | (1,151) | (177) | 4,763 | 11,997 |
Income tax benefit/(expense) | ¥ (52,924) | $ (8,134) | ¥ (32,202) | ¥ 1,119 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Income Tax Disclosure [Abstract] | ||||
(Loss)/income before income tax | ¥ (676) | $ (104) | ¥ 83,045 | ¥ (32,860) |
Income tax benefit/(expense) computed at the PRC statutory tax rate of 25% | 169 | 26 | (20,761) | 8,215 |
Effect of different tax rates in different jurisdictions | (8,175) | (1,256) | 5,688 | 4,557 |
Non-deductible expenses | (26,482) | (4,071) | (9,051) | (2,352) |
Outside basis difference on investment in WFOE | (4,446) | (683) | (3,174) | 0 |
PRC royalty withholding tax | (6,950) | (1,068) | (4,607) | (4,177) |
Changes in valuation allowance | (7,040) | (1,082) | (297) | (5,124) |
Income tax benefit/(expense) | ¥ (52,924) | $ (8,134) | ¥ (32,202) | ¥ 1,119 |
INCOME TAXES (Details 2 Parenth
INCOME TAXES (Details 2 Parenthetical) | 12 Months Ended |
Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Deferred tax assets: | |||
Tax loss carry forward | ¥ 34,111 | $ 5,243 | ¥ 32,601 |
Accrued expenses | 6,638 | 1,020 | 4,590 |
Others | 1,971 | 303 | 1,422 |
Less: Valuation allowance | (32,002) | (4,919) | (25,491) |
Deferred tax assets | 10,718 | 1,647 | 13,122 |
Deferred tax liabilities: | |||
Long-lived assets arising from acquisitions | 1,094 | 168 | 0 |
Outside basis difference on investment in WFOE | 7,620 | 1,171 | 3,174 |
Revenue recognition | 3,385 | 521 | 8,931 |
Deferred income tax liabilities, net | 12,099 | 1,860 | 12,105 |
Deferred tax assets | 2,404 | 369 | 4,087 |
Deferred tax liabilities | (3,785) | (582) | (3,070) |
Net deferred tax assets/(liabilities) | ¥ (1,381) | $ (213) | ¥ 1,017 |
INCOME TAXES (Details 4)
INCOME TAXES (Details 4) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | |
Income Tax Disclosure [Abstract] | |||
Balance at January 1, | ¥ 9,124 | $ 1,402 | ¥ 8,843 |
Additions based on tax positions related to current year | 738 | 113 | 281 |
Settlement | (1,063) | (163) | 0 |
Balance at December 31, | ¥ 8,799 | $ 1,352 | ¥ 9,124 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Effective Income Tax Rate Reconciliation, Tax Credit, Percent | 16.50% | 16.50% | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | ||||
Undistributed Earnings (Loss) Available to Common Shareholders, Basic | ¥ 112,059 | $ 17,223 | ||||
Deferred Tax Assets, Operating Loss Carryforwards | 136,445 | ¥ 130,404 | $ 20,971 | |||
Unrecognized Tax Benefits | 8,799 | 9,124 | ¥ 8,843 | 1,352 | $ 1,402 | |
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | 1,389 | 932 | 213 | |||
Deferred Tax Assets, Tax Credit Carryforwards, Other | 7,410 | 8,192 | $ 1,139 | |||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | 1,063 | 163 | 0 | |||
Unrecognized Tax Benefits, Interest on Income Taxes Expense | 734 | 113 | 573 | 279 | ||
Unrecognized Tax Benefits, Income Tax Penalties Expense | ¥ 275 | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | ¥ 1,160 | $ 178 | ¥ 1,666 | |||
Disposition Of Assets Tax Percentage | 10.00% | 10.00% | ||||
Remaining Balance Of Undistributed Earnings Available To Commonshareholders | ¥ 76,202 | $ 11,712 | ||||
The Group [Member] | ||||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | ¥ 5,888 | $ 905 | ||||
Maximum [Member] | PRC [Member] | ||||||
Tax Credit Carryforward, Expiration Date | Dec. 31, 2022 | Dec. 31, 2022 | ||||
Minimum [Member] | PRC [Member] | ||||||
Tax Credit Carryforward, Expiration Date | Dec. 31, 2018 | Dec. 31, 2018 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | ||
Loan to a related party: | |||||
Payments to Fund Long-term Loans to Related Parties | ¥ 150,000 | $ 23,055 | ¥ 280,000 | ¥ 200,000 | |
Lionbridge Limited [Member] | |||||
Loan to a related party: | |||||
Payments to Fund Long-term Loans to Related Parties | [1] | 150,000 | 23,055 | 280,000 | 200,000 |
Mai Rui [Member] | |||||
Fees paid to related parties: | |||||
Payments for Other Fees | [2] | 0 | 0 | 278 | 705 |
Bain Advisors [Member] | |||||
Fees paid to related parties: | |||||
Payments for Other Fees | [3] | ¥ 38,537 | $ 5,923 | ¥ 6,200 | ¥ 6,200 |
[1] | The Group entered into certain entrustment loan agreements with Lionbridge, pursuant to which the Group granted total loans of RMB280,000 and RMB150,000 (US$23,055) to Lionbridge during the years ended December 31, 2016 and 2017, respectively, with details set forth below: | ||||
[2] | During the years ended December 31, 2015, 2016 and 2017, the Group paid course development fees of RMB705, RMB278 and RMB nil (US$ nil), respectively, to Mai Rui. | ||||
[3] | During the years ended December 31, 2015, 2016 and 2017, the Group paid consulting fees of RMB6,200, RMB6,200 and RMB38,537(US$5,923), respectively, to Bain Advisors, an affiliate of the Group’s majority shareholder, which included a lump sum consulting termination fee of RMB33,887(US$5,208) to Bain Advisors as a result of the IPO for the year ended December 31, 2017, of which RMB20,000(US$3,074) was unpaid as at December 31, 2017 (note 13 c) (2)) |
RELATED PARTY TRANSACTIONS (D73
RELATED PARTY TRANSACTIONS (Details 1) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loan One [Member] | ||
Principal | ¥ 100,000 | ¥ 200,000 |
Interest Rate | 7.00% | 10.00% |
Period | February 24, 2017 to November 30, 2017 | March 10, 2015 to November 30, 2015 |
Loan Two [Member] | ||
Principal | ¥ 50,000 | ¥ 200,000 |
Interest Rate | 7.00% | 9.00% |
Period | March 20, 2017 to November 30, 2017 | March 30, 2016 to November 30, 2016 |
Loan Three [Member] | ||
Principal | ¥ 30,000 | |
Interest Rate | 5.00% | |
Period | July 8, 2016 to December 8, 2016 | |
Loan Four [Member] | ||
Principal | ¥ 50,000 | |
Interest Rate | 6.00% | |
Period | July 8, 2016 to December 8, 2016 |
RELATED PARTY TRANSACTIONS (D74
RELATED PARTY TRANSACTIONS (Details 2) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Bain Capital Education IV [Member] | |||
Due from Related Parties | ¥ 6,604 | $ 1,015 | ¥ 0 |
RELATED PARTY TRANSACTIONS (D75
RELATED PARTY TRANSACTIONS (Details 3) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) |
Bain Advisors | |||
Due to Related Parties | ¥ 20,000 | $ 3,074 | ¥ 0 |
RELATED PARTY TRANSACTIONS (D76
RELATED PARTY TRANSACTIONS (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017USD ($) | ||
Payments to Fund Long-term Loans to Related Parties | ¥ 150,000 | $ 23,055 | ¥ 280,000 | ¥ 200,000 | ||
Investment Income, Interest | 19,559 | 3,006 | 16,622 | 17,853 | ||
Due to Related Parties, Current | 20,000 | 0 | $ 3,074 | |||
Lionbridge Limited [Member] | ||||||
Payments to Fund Long-term Loans to Related Parties | [1] | 150,000 | 23,055 | 280,000 | 200,000 | |
Investment Income, Interest | 7,457 | 1,146 | 12,712 | |||
Bain Capital AdvisorsChinaLtd [Member] | ||||||
Payment Of Termination Fee | 33,887 | 5,208 | ||||
Mai Rui [Member] | ||||||
Payments for Other Fees | [2] | 0 | 0 | 278 | 705 | |
Bain Advisors [Member] | ||||||
Payments for Other Fees | [3] | ¥ 38,537 | $ 5,923 | ¥ 6,200 | ¥ 6,200 | |
[1] | The Group entered into certain entrustment loan agreements with Lionbridge, pursuant to which the Group granted total loans of RMB280,000 and RMB150,000 (US$23,055) to Lionbridge during the years ended December 31, 2016 and 2017, respectively, with details set forth below: | |||||
[2] | During the years ended December 31, 2015, 2016 and 2017, the Group paid course development fees of RMB705, RMB278 and RMB nil (US$ nil), respectively, to Mai Rui. | |||||
[3] | During the years ended December 31, 2015, 2016 and 2017, the Group paid consulting fees of RMB6,200, RMB6,200 and RMB38,537(US$5,923), respectively, to Bain Advisors, an affiliate of the Group’s majority shareholder, which included a lump sum consulting termination fee of RMB33,887(US$5,208) to Bain Advisors as a result of the IPO for the year ended December 31, 2017, of which RMB20,000(US$3,074) was unpaid as at December 31, 2017 (note 13 c) (2)) |
RESTRICTED NET ASSETS (Details
RESTRICTED NET ASSETS (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2017USD ($) | |
Receivables [Abstract] | ||||
Descriptions of Annual Appropriations of General Reserve Subject to Certain Cumulative Limits | Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax income as determined under PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Companys discretion | Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax income as determined under PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Companys discretion | ||
Appropriations to General Reserve | ¥ 0 | ¥ 3,526 | ||
Descriptions of Annual Appropriations of After Tax Income to Development Fund Prior To Payments of Dividend | PRC laws and regulations require private schools that require reasonable returns to make annual appropriations of no less than 25% of after-tax income prior to payments of dividend to its development fund, which is to be used for the construction or maintenance of the school or procurement or upgrading of educational equipment. For private schools that do not require reasonable returns, this amount should be equivalent to no less than 25% of the annual increase of net assets of the school as determined in accordance with generally accepted accounting principles in the PRC. | PRC laws and regulations require private schools that require reasonable returns to make annual appropriations of no less than 25% of after-tax income prior to payments of dividend to its development fund, which is to be used for the construction or maintenance of the school or procurement or upgrading of educational equipment. For private schools that do not require reasonable returns, this amount should be equivalent to no less than 25% of the annual increase of net assets of the school as determined in accordance with generally accepted accounting principles in the PRC. | ||
Appropriations to Development Fund | ¥ 13,855 | $ 2,129 | ¥ 3,115 | |
Amount of Restricted Net Assets for Consolidated and Unconsolidated Subsidiaries | ¥ 279,070 | $ 43,892 |
(LOSS)_INCOME PER SHARE (Detail
(LOSS)/INCOME PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net (loss)/income attributable to RISE Education Cayman Ltdbasic and diluted | ¥ (47,974) | $ (7,373) | ¥ 53,923 | ¥ (26,285) |
Denominator: | ||||
Weighted average number of ordinary shares outstanding- basic and diluted | 101,890,411 | 101,890,411 | 100,000,000 | 100,000,000 |
Basic and diluted (loss)/income per share | (per share) | ¥ (0.47) | $ (0.07) | ¥ 0.54 | ¥ (0.26) |
SHARE-BASED PAYMENTS (Details)
SHARE-BASED PAYMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of options, Outstanding Opening | 5,985,000 | |
Number of options, Granted | 975,000 | |
Number of options, Forfeited | (75,000) | |
Number of options, Outstanding Ending | 6,885,000 | 5,985,000 |
Number of options, Vested and expected to vest | 6,885,000 | |
Number of options, Exercisable | 3,466,838 | |
Weighted- average exercise price, Outstanding Opening | $ 1.44 | |
Weighted- average exercise price, Granted | 1.44 | |
Weighted- average exercise price, Forfeited | 1.44 | |
Weighted- average exercise price, Outstanding Ending | 1.44 | $ 1.44 |
Weighted- average exercise price, Vested and expected to vest | 1.44 | |
Weighted- average exercise price, Exercisable | 1.44 | |
Weighted-average grant- date fair value, Granted | $ 5.64 | |
Weighted - average remaining contractual term, Outstanding | 6 years 10 months 2 days | 7 years 10 months 28 days |
Weighted - average remaining contractual term Vested and expected to vest | 6 years 10 months 2 days | |
Weighted - average remaining contractual term Exercisable | 6 years 4 months 2 days | |
Aggregate intrinsic Value, Outstanding Opening | $ 10,683 | |
Aggregate intrinsic Value, Outstanding Ending | 41,035 | $ 10,683 |
Aggregate intrinsic Value, Vested and expected to vest | 41,035 | |
Aggregate intrinsic Value, Exercisable | $ 20,662 |
SHARE-BASED PAYMENTS (Details 1
SHARE-BASED PAYMENTS (Details 1) | 12 Months Ended | |
Dec. 31, 2017$ / shares | Dec. 31, 2016$ / shares | |
Suboptimal exercise factor | 2.8 | 2.8 |
Fair value per ordinary share as at valuation date | $ 7.07 | |
Maximum [Member] | ||
Risk-free interest rate | 2.93% | 2.23% |
Expected volatility range | 49.30% | 50.70% |
Fair value per ordinary share as at valuation date | $ 3.26 | |
Minimum [Member] | ||
Risk-free interest rate | 2.39% | 1.92% |
Expected volatility range | 47.50% | 48.10% |
Fair value per ordinary share as at valuation date | $ 3.10 |
SHARE-BASED PAYMENTS (Details 2
SHARE-BASED PAYMENTS (Details 2) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Selling and marketing expenses | ¥ 177,993 | $ 27,357 | ¥ 128,475 | ¥ 96,688 |
General and administrative expenses | 339,690 | 52,209 | 148,093 | 135,603 |
Share-based Compensation | 95,307 | 14,648 | ¥ 0 | ¥ 0 |
Share Incentive Plan 2017 [Member] | ||||
Cost of revenues | 17,063 | 2,622 | ||
Selling and marketing expenses | 9,045 | 1,390 | ||
General and administrative expenses | 69,199 | 10,636 | ||
Share-based Compensation | ¥ 95,307 | $ 14,648 |
SHARE-BASED PAYMENTS (Details T
SHARE-BASED PAYMENTS (Details Textual) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 24, 2017CNY (¥) | Apr. 30, 2016shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥) | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 50% of the options granted will generally vest in four or five equal installments over a service period (the 2016 Service Options) while the remaining 50% of the options will vest in two equal installments of 25% each if a fixed targeted return on the Companys ordinary shares is achieved (the 2016 Market Options). | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 2,802 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||||
Share-based Compensation | ¥ 95,307 | 14,648 | ¥ 0 | ¥ 0 | ||
Share Incentive Plan 2016 [Member] | ||||||
Share-based Compensation | ¥ 90,335 | 95,307 | $ 14,648 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | ¥ | ¥ 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 5,709,509 | 5,709,509 | ||||
Share Incentive Plan 2017 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | 10 years | ||||
Equity Option Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 7,000,000 | |||||
2017 Modification Date [Member] | ||||||
Share-based Compensation | ¥ 2,329 | $ 358 | ||||
Employee [Member] | Equity Option Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,985,000 |
COMMITMENTS AND CONTINGENCIES83
COMMITMENTS AND CONTINGENCIES (Details) - Dec. 31, 2017 ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
2,018 | ¥ 156,549 | $ 24,061 |
2,019 | 138,674 | 21,314 |
2,020 | 115,381 | 17,734 |
2,021 | 77,646 | 11,934 |
2022 and thereafter | 147,673 | 22,697 |
Operating Leases, Future Minimum Payments Due | ¥ 635,923 | $ 97,740 |
COMMITMENTS AND CONTINGENCIES84
COMMITMENTS AND CONTINGENCIES (Details Textual) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017USD ($) | |
Operating Leases, Rent Expense | ¥ 136,662 | $ 19,683 | ¥ 121,530 | ¥ 110,958 | |
Other Commitment | ¥ 3,085 | $ 474 |
ACCUMULATED OTHER COMPREHENSI85
ACCUMULATED OTHER COMPREHENSIVE (LOSS)/ INCOME (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Equity [Abstract] | ||||
Opening Balance | ¥ 50,464 | ¥ 28,189 | ¥ 7,065 | |
Foreign currency translation adjustments, net of tax of nil | (10,424) | $ (1,602) | 22,275 | 21,124 |
Closing Balance | ¥ 40,040 | $ 6,154 | ¥ 50,464 | ¥ 28,189 |
CONDENSED FINANCIAL INFORMATI86
CONDENSED FINANCIAL INFORMATION OF THE COMPANY (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) |
Current assets: | |||||
Due from a subsidiary of the Group | ¥ 6,604 | $ 1,015 | ¥ 0 | ||
Prepayments and other current assets | 40,571 | 6,236 | 45,517 | ||
Total current assets | 1,142,445 | 175,591 | 707,738 | ||
Non-current assets: | |||||
Total non-current assets | 813,893 | 125,093 | 792,560 | ||
Total assets | 1,956,338 | 300,684 | 1,500,298 | ||
Current liabilities | |||||
Accrued expenses and other liabilities | 171,099 | 26,298 | 96,158 | ||
Total current liabilities | 1,030,700 | 158,416 | 763,366 | ||
Total liabilities | 1,660,606 | 255,231 | 1,101,871 | ||
Shareholders' equity: | |||||
Ordinary shares (US$0.01 par value; 200,000,000 and 200,000,000 shares authorized, 100,000,000 and 110,000,000 shares issued and outstanding as of December 31, 2016 and 2017, respectively)) | 6,782 | 1,042 | 6,120 | ||
Additional paid-in capital | 532,474 | 81,840 | 452,369 | ||
Accumulated deficit | (315,531) | (48,496) | (134,264) | ||
Accumulated other comprehensive loss | 40,040 | 6,154 | 50,464 | ¥ 28,189 | ¥ 7,065 |
Total shareholders' equity | 310,131 | 47,666 | 407,200 | ||
Total liabilities and shareholders' equity | 1,956,338 | 300,684 | 1,500,298 | ||
Parent Company [Member] | |||||
Current assets: | |||||
Due from a subsidiary of the Group | 145,416 | 22,350 | 0 | ||
Prepayments and other current assets | 143 | 22 | 0 | ||
Total current assets | 145,559 | 22,372 | 0 | ||
Non-current assets: | |||||
Due from related parties | 0 | 0 | 298,549 | ||
Investment in subsidiaries | 184,707 | 28,389 | 111,661 | ||
Total non-current assets | 184,707 | 28,389 | 410,210 | ||
Total assets | 330,266 | 50,761 | 410,210 | ||
Current liabilities | |||||
Accrued expenses and other liabilities | 5,329 | 819 | 0 | ||
Advance from a subsidiary of the Group | 14,806 | 2,276 | 3,010 | ||
Total current liabilities | 20,135 | 3,095 | 3,010 | ||
Total liabilities | 20,135 | 3,095 | 3,010 | ||
Shareholders' equity: | |||||
Ordinary shares (US$0.01 par value; 200,000,000 and 200,000,000 shares authorized, 100,000,000 and 110,000,000 shares issued and outstanding as of December 31, 2016 and 2017, respectively)) | 6,782 | 1,042 | 6,120 | ||
Additional paid-in capital | 532,474 | 81,840 | 452,369 | ||
Accumulated deficit | (269,165) | (41,370) | (101,753) | ||
Accumulated other comprehensive loss | 40,040 | 6,154 | 50,464 | ||
Total shareholders' equity | 310,131 | 47,666 | 407,200 | ||
Total liabilities and shareholders' equity | ¥ 330,266 | $ 50,761 | ¥ 410,210 |
CONDENSED FINANCIAL INFORMATI87
CONDENSED FINANCIAL INFORMATION OF THE COMPANY (Parenthetical) (Details) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 110,000,000 | 100,000,000 |
Common Stock, Shares, Outstanding | 110,000,000 | 100,000,000 |
Parent Company [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 110,000,000 | 100,000,000 |
Common Stock, Shares, Outstanding | 110,000,000 | 100,000,000 |
CONDENSED FINANCIAL INFORMATI88
CONDENSED FINANCIAL INFORMATION OF THE COMPANY (Details 1) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Operating (loss)/income | ¥ (628) | $ (96) | ¥ 70,846 | ¥ (49,493) |
Interest income | 19,559 | 3,006 | 16,622 | 17,853 |
(Loss)/income before income tax expense | (676) | (104) | 83,045 | (32,860) |
Income tax expense | 52,924 | 8,134 | 32,202 | (1,119) |
Net (loss)/income | (47,974) | (7,373) | 53,923 | (26,285) |
Other comprehensive income, net of tax of nil | ||||
Foreign currency translation adjustments | (10,424) | (1,602) | 22,275 | 21,124 |
Comprehensive (loss)/income | (58,398) | (8,975) | 76,198 | (5,161) |
Parent Company [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Operating (loss)/income | 0 | 0 | 0 | 0 |
Equity in (loss)/profit of subsidiaries and the VIEs | (54,676) | (8,403) | 35,409 | (48,332) |
Interest income | 6,702 | 1,030 | 18,514 | 22,047 |
(Loss)/income before income tax expense | (47,974) | (7,373) | 53,923 | (26,285) |
Income tax expense | 0 | 0 | ||
Net (loss)/income | (47,974) | (7,373) | 53,923 | (26,285) |
Other comprehensive income, net of tax of nil | ||||
Foreign currency translation adjustments | (10,424) | (1,602) | 22,275 | 21,124 |
Other comprehensive income/(loss) | (10,424) | (1,602) | 22,275 | 21,124 |
Comprehensive (loss)/income | ¥ (58,398) | $ (8,975) | ¥ 76,198 | ¥ (5,161) |
CONDENSED FINANCIAL INFORMATI89
CONDENSED FINANCIAL INFORMATION OF THE COMPANY (Details 2) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Net cash generated from investing activities | ¥ (53,067) | $ (8,156) | ¥ (42,544) | ¥ (38,233) |
Net cash used in financing activities | 129,001 | 19,827 | (80,209) | 98 |
Net increase in cash and cash equivalents | 415,983 | 63,935 | 122,563 | 127,963 |
Cash and cash equivalents at beginning of year | 639,999 | 98,366 | 517,436 | 389,473 |
Cash and cash equivalents at end of year | 1,055,982 | 162,301 | 639,999 | 517,436 |
Parent Company [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Net cash generated from investing activities | 571,808 | 87,885 | 426,016 | 0 |
Net cash used in financing activities | (571,808) | (87,885) | (426,016) | 0 |
Net increase in cash and cash equivalents | 0 | 0 | 0 | 0 |
Cash and cash equivalents at beginning of year | 0 | 0 | 0 | 0 |
Cash and cash equivalents at end of year | ¥ 0 | $ 0 | ¥ 0 | ¥ 0 |