TAL TAL Education

Echo Yan Director, Investor Relations
Rong Luo Chief Financial Officer
Linda Huo Vice President, Finance
Lucy Yu Bank of America Securities
Sheng Zhong Morgan Stanley
Felix Liu UBS
Ds Kim JPMorgan
Alex Xie Credit Suisse
Call transcript
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Good day and thank you for standing by. Welcome to TAL Education Group Fourth Fiscal Quarter and Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. hand over to Ms. like now the to conference I'd Group. of Echo Director Education Yan, IR TAL Thank you. ahead go Please ma'am.

Echo Yan

and earnings Thank the or us was a Education quarter copy today operator. distributed newswires. for year Thanks you you company TAL Group's all earlier today on fourth may earnings the call. through The conference for and joining fiscal release XXXX find fiscal website IR

Mr. and Rong Vice this IR Luo, Financial During hear call, Huo, Finance; will Officer; President TAL. from of myself, you of Linda Chief

Following remarks available prepared Mr. the Huo Luo will to and be questions. Ms. answer your

continue, discussions Securities statements provisions forward-looking note Reform we Before safe the of please XXXX. that Litigation today will harbor the under the Act contain Private US of made

that materially uncertainties those to may cause are the statements limited are filings Forward-looking actual with from risks and current SEC. uncertainties differ expectations. include, Potential but in public to, not subject to outlined and our results risks

and our more our risks For discussions refer the Luo. most Please comparable over measures. call non-GAAP earnings this release the of would about with reconciliation a the refer I Also, turn now includes Rong certain to financial filings information our in measures. earnings these uncertainties to please Rong directly please. like to to GAAP to measures Mr. release call contains non-GAAP which the of SEC.

Rong Luo

business as cities the capacity as Meanwhile, recent us could pandemic offline expansion in call. XXXX. and Internationally, of the as the for vaccination at you you situation are for well of Thank further In progress. all. behind of our worst joining public Good the and that to on TAL, efforts planned Echo. quarter year the morning tutoring our you, today online this signs fiscal good all. and both showed Thank fourth developed earnings and evening all months, programs hope be economy us concerted health couple China's

RMB then terms, full In update revenue is XX.X% XXXX, She update our the discuss online fourth Vice you will $XX.X million quarter our Net key terms. financials. mostly the in year in will student class of ago year-over-year from business quarter Finance. in XX.X% And loss Linda now progress small outlook. turn RMB call year in year-over-year, was Linda to you Huo, was Yan, the the our in which last fourth the Total growth on overview our the fiscal loss to up operating strategy terms period. of terms. XX.X% net President the U.S. fiscal U.S. operational our Echo $XXX.X course revenue an review and will will on give priced growth you compared in quick a compared and the XX% dollar by operations in by year. quarter as Xueersi year normal $XXX.X fourth me metrics. Let give quarter. in Director million $X,XXX.X I by of increased Peiyou to enrollments that, After business million same was enrollments. I was dollar the $X.X Non-GAAP IR fourth please. to well as driven XX.X% million over million GAAP fiscal long-term and

Linda Huo

fourth review quarter for our various business streams I XXXX. tutoring the will revenue Thank you. fiscal of the of year

revenue period. and XX% was due XX% for class Firstleap, of last which total revenue which for the in education Mobby quarter courses, year compared of the contribution core net XX% period. year. business, from The year in represented XX% our total programs online Peiyou same in Peiyou terms, revenue net of XX% XX% and enrollments class, services. Peiyou fiscal start rate and in up China same in our continued accounted year revenue Xueersi Fourth accounted compared mostly These revenue of XX% in growth Xueersi ago and to course of XX% overall All-in-all, to fourth consist increased compared the priced ago quarter was some Let by same of small faster terms business, in dollar other The Xueersi Xueersi period small XX% normal US long-term was terms RMB to me XX% supported in the small by the from net the in the revenue of XXXX. which total dollar Peiyou quarter remains RMB growth lower and other course the small recovery in class business improving with in class, year-over-year. US terms. the Peiyou while XX% our situation stable to

Beijing, online metrics small and Nanjing Peiyou fourth class migrate remained operational top the well year-over-year. fulfillment as generated class long-term Peiyou due of Our dollar even dollar to unprecedented than ASP mainly the in dollar very the Guangzhou, refund class. US in Revenue increased the in off-line and The of terms small retention Xueersi XXXX Peiyou from we small by increased increase gap Xueersi where rate throughout performed Peiyou other by in Peiyou and offered stable the rate, pricing XX% Shenzhen grew class US by rate XX% was business. cities. accounted of Xueersi terms XX% In had class in cities, drop-out and XX% priced which small the XX% from five quarter, students February five terms. cities such year various increased to for in in top key normal Shanghai, to we RMB terms the are Revenue by tiers small year-over-year US circumstances.

XX% accounted Peiyou cities The class Xueersi business. the for of small other

to one-on-one to fourth priced we to compared quarter, discounts XX% X% by XXXX had courses ago offline approximately XX% the fourth in year COVID-XX fees Zhikang fiscal total US normal Zhikang Zhikang one-on-one offered this year-over-year. last of increase one-on-one business. the accounted in move business revenue achieved the was and growth X% after terms. in in like and of fourth to in tuition our for sector year-over-year period. February in flash we discuss of ASP terms regular terms RMB quarter, US I'd RMB In the revenue the Next, terms X% in as XX% some same the In outbreak dollar to dollar increased year mainly students quarter of period. well year several during Zhikang when The increase as long-term online due cities the in

me strategy. update let capacity current you our Now on expansion

of one-on-one a small new net small opened following QX, class market centers. on we eight cities fourth were newly added a of new fourth to We net the total XXX XXX cities one-on-one one expansion four which added the to We added continued eight quarter year. quarter centers. we the Firstleap of We and XX as during government for in adding closed nine, the learning drive class total XXX fiscal We in and fourth this are; learning These planned Weihai, sustainable bringing Similarly, a we centers closed learning XXXX. and year closed Peiyou centers. and demand. In centers based of three a our and adding healthy five center centers one-on-one Ma’anshan, new basis net learning fiscal in the learning center, Zhaoqing. XXX Nanchong Mobby Liaocheng, and centers Peiyou new network by on quarter and X,XXX our cities approach Cangzhou, and guidelines Rizhao, opened Yibin, expanded

Peiyou we added Xueersi we small in one During the these the learning States. had Among Peiyou cities, the XXX classrooms. small and In of in international quarter, X,XXX China learning Firstleap were merged and end centers class of one-on-one. class class small February by which centers, XXX XX United in were the XXX centers, all, and learning center Zhikang were Mobby XXXX, Peiyou and XXX XXX cities education

some of standard XXXX, small we learning add more centers some rented and fiscal few and QX close into expect year centers Looking on based conditionally a have operations. learning to class Peiyou down

closely up with COVID-XX alert as follow for stay and developments. will government guidelines, We always,

Turning XX% Fourth The by the RMB to of of normal year XXX% XX% million. for the terms grew priced long-term long-term business. total total total dollar fourth XXX% online period priced year-over-year well the revenue course in of of and education, enrollments, priced to quarters. as growth X.X same in XX% U.S. retentions year-over-year XX% increasing normal of long-term and respectively. now sales demand business supported and online course over efforts revenue to our normal from total in revenue fiscal contributed ago by grew and enrollments and by as enrollment quarter, the compared quarter while was terms, in XX% marketing previous In online

Yan Echo priced turn please. the I terms QX, course in normal in increased the year-over-year. by addition, X% dollar and that, In by U.S. ASP now increased update. financial will online over X% call in to RMB terms With Echo, long-term for

Echo Yan

Linda. Thanks,

XXXX ago million staff in expense the year XXXX quarter XXXX XXXX. for government in year non-current compared to of XXX.X% by Income more of which impacted through of fourth The From of million by million some value-added impairment net fiscal expenses, Let fiscal of Selling compensation million by loss in was million TAL programs fourth share-based promotion benefit fourth fourth and from to tax well offset of XXX.X US$ of fourth fourth from and same fiscal fiscal to cash XX.X% loss income the as Other US$XX.X fiscal to quarter million million US$X,XXX.X net ago expense Gross and and then marketing to was by offerings. XXXX XX, the review increase the in as brand tax fourth XXXX. quarter balance US$XX.X loss attributable in had the Net to February XXX.X% period. investment the fiscal and the excluded XXXX of year US$X.X as XX, XXXX to of Non-GAAP of XXXX. expenses security and compared XXX.X million increased to same the assets. US$X,XXX.X of more expenses exemption compared the marketing US$XXX XXXX partially year higher to company points was fiscal TAL of million of now US$ quarter the XXX.X of fourth and attributable for of activities and due compared TAL by me loss tax margin of to expenses, which sales year million fiscal compared was quarter year US$XX.X base compensation non-GAAP as year US$XX.X year-on-year US$XXX.X US$ year year attributable year of cash the fiscal excluded customer equivalents profit briefly million income marketing the XX.X% support February marketing quarter year million cash XX.X% of strengthen compensation social in of fourth million TAL, loss a selling ago offered marketing the equivalents XXXX. expenses the period income financials. primarily and net US$XX.X period US$X,XXX and in the in in to million million increased year. COVID-XX XXX.X same and for quarter XXX.X Non-GAAP fourth to sheet to was cash year compared of to other of last of expense quarter the US$ to year attributable million period. to to and fiscal the XXXX. fourth to our million short-term primarily from service selling quarter investments go same Gross as was period. in quarter for US$X.X US$ of increased the financial quarter the result key the million US$ increased in share-based Other XXX.X during and short-term

balance contributed US$XXX mainly deferred As which million in as businesses. related Company's XXXX, Peiyou deferred well XX.X%, by part tuition of to million increase as small February as XXXX, XX, other the spring through of a compared collected February the semester of online representing courses revenue advance year-over-year of XX, to and was of Xueersi revenue US$X,XXX.X the of was classes

to Turning fiscal year full now XXXX. the

in for year some fiscal by to grew in year. year key Gross XX.X% the from the income the the for revenue to million TAL, million US$XXX.X million. compared the Non-GAAP fiscal from the was the loss share-based net compared decreased the operations fiscal to million review follows. briefly financials of of to the operations fiscal XXXX. TAL net bps year profit to loss US$X,XXX.X for Non-GAAP fiscal to in compared as US$XXX.X XXXX million was of excluded Let of million from in million attributable me grew XXXX margin compared Fiscal TAL from operations XX.X% last by million by Gross loss in in US$X,XXX.X XXXX. to US$X,XXX.X XX period to to expenses XX.X% US$XXX fiscal to compared million was Loss which US$XXX.X operations, compensation XXXX, income year. same TAL excluded from in income fiscal year share-based year fiscal year as was year prior US$XXX.X attributable US$XXX.X the non-GAAP the non-GAAP XXXX. year XXXX, to in to net expenses which million attributable [ph], Net of million year the US$XX compensation XXXX. US$X.X income attributable XX.X%

I the next outlook back briefly to to Rong call will the our -- execution hand the quarter. update and of provide Luo Now, strategy on Mr. please. you business for

Rong Luo

due outbreak to you Fiscal XXXX COVID-XX. Echo. was Thank year an unprecedented of the year indeed

we any and to government strategy with all our realized growth the we whatever contribute course our development necessary related faced, education to responded XX.X% stayed our protect provider an we safety the and the long-term the employees our During efforts instructions challenges did as revenue students in Despite and to service the this year fiscal country's expectations. and stayed regardless growth to of to fight we on against have of XXXX, health We year, public -- rate line which pandemic. great timely for our of competition. intense pandemic was

in diversified better services, continuously with teachers' as guidelines products to technologies, efforts. training offerings industry ever our be the the supported sustainable conduct able pay. and ability health changing ahead Looking more investing the marketing Thus, by for as our and follow public quality will tutoring we customers' our will with well up teachings of meet government in keep regulations class line demand national and to

XXXX net are business first on an remarks. expected total now between on XX% That to to we Let me XX% revenue is estimates, basis. quarter our to million, Based for representing of US$X,XXX.X prepared turn million increase my questions. the year-over-year a outlook. of ready current year finally US$X,XXX.X take concludes be our fiscal to Operator, and


you. Thank

will We ask first Securities. of Yu Bank begin Your Instructions] question from question. question-and-answer the session. America Lucy your from now Please comes [Operator

Lucy Yu

very you taking my Thank much for question.

their their about localization, cetera. we topic in plan of So also products, been localization has et And my a is question which our one noticed also of hot that lately. courses, competitors today reviewed

how online? how of you. you that or business different progressing with have these we divert is platforms? can synergies to related online or already future is localization Thank between online dynamic like So say any our two question and could of our please the this number our size targets two, share we traffic competitive given edge industry share among that that's our we Peiyou should getting over us status especially Peiyou do lines, that, about between think competition and and XX% meaningful then one. so revenue, forward? going localized that And and course So, So in our the number -- co-operations in much

Rong Luo

so much Lucy. Thank you,

no think first -- the class which developed that's class, online or about Peiyou online talked think question year our we [Indiscernible]. class localized second its remind matter I last offline why Peiyou that quarter, me, about localized think I localized we I localized

lead The students, result. or more we reach factors. we the different consider -- a because tailor learning a sometimes through process Chinese lot of to localized when to maybe need for we better more So all made

to we be provinces version college exams, example, more. their If XX the the go and college versions of [Indiscernible] have will For different provinces even China, we in over local different the down exams. have

get make means we spend difficulty sure meet which including content different can result better needs to them versions, want need provide we we if their but to the less of sequence. the different a to localized teach, need much the different and So, we time, students content, level localized

same if you different version school it's different the schools, So one even city, school, have in in they that different Even the textbooks. we sequence. versions different and probably multiple and cities. And primary have of among Maybe textbooks, different provinces within know of districts. has middle China

followed sequence to be also other will learn use textbooks while sequence different. different. certain may knowledge school, schools textbooks same and the and their level their other, in And Some schools same difficulty be of this even first, same by

all. So dynamic we market When to we careful. content we very are be to version teach to very students, of facing and a fit we needs one try the their best need for one only instead teach

teach be think figured an to year, this the In difficulty these local content they the class cities. or what typically cities. helpful They -- the students local the teachers teach localized I So a will example, out the for lot exams the in no happening the of in part, place, also is know know about even of these teacher local in different last that, perspective, class. starting can that's Shanghai, in need matter for better. what's we an we cities. off-line know or the level the second in online that's very Beijing from Because online in They

So, students, require to all from will to one e-commerce. teachers we the if also students very better outcome teach level than over country. local teacher be very careful a ask besides, local They the teach And is significant different the education because, we need the be services. of only

them provide be should tailor made and we very services whatever So, also very localized.

learning what's Beijing, more more their be student offers less localized For version part is they happening seeing everyone at to In happening previous care to run, platform. going technology students. Beijing. the self-adapt provide in to and long differently. But At is compared attention? the in care can some purely when of all, the more have localized other least individually the and the maybe will there we're So one in be so-called a example, powerful to than solutions to online teached going is kind What's what a cities versions. individual that a today, possibly, chance time, up

more going So believe We on we need the more will them. most we to working more providing happy to right and to student are offer them. to their sometimes the teach the The spend as companies We they as, sometimes learn it's to needs We and to appropriate the less or see that hard but localized to content the for over that's cases -- needs they the are direction on need know and closer ideal going other go. industry students' to of students' a care be say, localized this the think them but in more. it's easy to maybe company side as and time, they be execute. our years. counterparts XX But

-- And so it it have learning us So, we the the are to new etcetera. more fundamental besides cities. the lot and we building geography is new part. more different channels informations -- a for takes different in will online for local the purely and get do and significant quite to which takes localized patience offers. localized centers and R&D, team, new way which the time, working students of investment And amount from different team is it some The help a the of teams from takes attract and for for providing the local

Especially prepared city. get kind need in localized want of means, the if China, So online if a care kind have to need equally we students to geography so -- of do needs that. then the like you'll is more Air we tiers purely every for we means which more huge -- and everyone Force, you for hard to which go part say work to

way. to patient we a going on the technology But the in and spend sure we thing see companies the training enough teach efficient try need are content on need make other on students works. use or to teacher do. etcetera right side, to be and are to time we that on more energies more and That's localized all to more -- So all happy when to

consider the asking you're the and Peiyou attractive think the much how on brand. They're and When asking, class our the school traffic business. view we the can In And under business, class they content it's not first that's online between and the between school small are in localized. second sharing So, to online you're an Xueersi's technology the same same synergy share I question the brand. place, Xueersi place they how strategy. Xueersi the share? synergy Peiyou second be the small they

the So as of And we to the among standardize we today perspective, their -- still share integrate end day, online of synergies built independent. we we both analyze some a standard think cities. to I the lot operations. they target strategies. to in has one. online tend business in when infrastructures them back we That end because in tried cover have they the today the the they And small for try operations they things in class But which an think at end the But different business Peiyou these brand learning Peiyou to two some class the and Xueersi similarity off-line. XXX the operational front tried more of process will tried is of markets. and The as off-line, small short thought and be every to

cover even their for go more down that's that's cities. to to school so geographies They Xueersi the go. very whole low-tier the now country. main market product and online And the

different have targets. they So,

simply the these operations traffic independent. in the and So we the more try perspective. synergies. to in in drive quite try back-end the synergies to functions end you, is do we but are now front more But Thank integrations But infrastructure more Lucy.

Lucy Yu

Thanks lot. a


you. Thank

comes question question. Morgan Sheng from Zhong from ask Stanley. next Please Our your

Sheng Zhong

my Hi, follow want I questions. on to for up Peiyou the also taking online. thanks

your per center much before that at capacity, as quarter. to less is your cost especially this learning than off-line So, I very clear look me it's Peiyou

So, in with online reason be should your and for off-line capacity new normal will that part the this So, of think I a be new strategies. the your future?

and appreciated. the Any contribution for longer So next will be color you. company's what maybe year will Thank online term? that Peiyou mean -- Peiyou total the outlook the in to so

Rong Luo

Sheng. Zhong you, Thank

integrate and also suggest and in today to doing together cities, Peiyou down think go we whole one as I off-line. big cities. maybe guys team Peiyou is and live even try but lower-tier revenue under both the I you to them Peiyou the not the online the only a to

I one proper example. way kind think our more is that to show look the of I into business.

Beijing and and live Shanghai, the In example we Shanghai. percentage Beijing a using in actually have students are now. of offering high For Peiyou off-line very that

So what's Peiyou sometimes, difficult Peiyou – or offline. is it's to what Peiyou separate live what's online

also even online/Peiyou of the to way to we're cities. live in look the cities school. class better try so the Peiyou online top-tier the class big to we other quite Peiyou the which that different channels some Xueersi successful online not format They I the the in And combining think class, to cover that new business. in at only we're is the side are localized piloting is is, from the So small Peiyou class the Peiyou not two the top they total pilot of I we're together way use Peiyou the going the all do live because And the when is of and small today, we're they to on also cities. but And the has looking the part think only covered very reason growth.

change of I needs to this, to to continue cities – the in the have future. way and think cover needs to a We to all develop be And according more expand to to the try to are business when we're and chance the behavior. customers' they manage looking confident

years and and both online to even two ago Peiyou buying independent. today, space offline more that these are and think parents off-line together. offers are I in merged coming seen we But Peiyou online have students relatively

special is deliver, need very to way we our how target The need a way deliver. we online much only say need. parents and Peiyou target don't to to use students we much Peiyou to need we have fit have best to is off-line how the So We clearly. or

maximize of So more in time more investment and energy. to possibility provide we kind need them and visibility return of their to

growth again, look can online can growth Thank So grow both believe drive offline together. drivers of all-in-all, wish we Sheng. And healthy all this coming you, years. the Peiyou we few to to that we leverage – and in Zhong


question question. next UBS. from Felix your comes from Our Please ask Liu

Felix Liu

growth on you Hi. very maybe question quarter and and it any to what's was know, of secondly previously management. on guidance very for the as strong was next online our understand into FY think the performance? I on XXXX that, year May evening, you the by like growth be outlook? much. quarter business I then well. the And there a is the business weak the thank because scheduling. driving do taking that growth Thank update ended strong bit is you down next fiscal for up well. online, the question. lines? Good side, a very I on And quarter, performing – could the Congratulations My expect But my QX this the will on and of little break line? possibly guidance, you what And given strong momentum

Rong Luo

question. the Okay. Thank for you

QX I think, we're looking only numbers. to the

numbers. draw attention of in to is our the is details deep quarter now outbreak same we our while growth kind present QX people the of say need very year I QX, the is last because of to around you screen the to the revenue dive just – Peiyou In enrollment higher. is what remember, That's But COVID-XX. the will that good. Sometimes year number XX%-plus, the quarter last if growth

But to all frankly moved the time, what, is move off-line very online. speaking, that we never business of we our So that know time. is rushed, because at the at pandemic

pricing the -- price significant pace, less is to last bit we which price off-line QX's from drives so is compensate much year's little higher. than than a off-line which to the online changed lower the -- a So parents, so the is the online pricing --

you into enrollment suggest my guys XX%-plus. look growth I So Peiyou

the And the the of quarter performed than what better online much see number for of fit enrollment step-by-step. probably the be needs. recovery right to the to is is fair is can the we're we to compared And XXXX. time spending, marketing a I because very drive QX, And a amount the part, can our we of that, class Peiyou the recovering year a to to online similar growth. that year year part growth previous a small pretty shows little seeing the also is look the last student's looking part, the So Part online said we reason And also offers, at. COVID-XX, quarters And expected. second this bit it's the on -- goes tough QX, online QX. through the will will QX coming dollars track in of school's fiscal -- which

So in much surprise online that the There to rolling track education the that. growth I best suggest, big is to do we're on -- And to when again, way off-line companies' perspective. looking is XX but and both, pretty no months.

ongoing that, from numbers in to to all on the XX-months makes is we of some where can is growth draw attention and based actually business. need probably which of I can quarter-over-quarter on more of sit eliminate the total adjustments, -- policies government. impact all looking today. maybe our some out you're And was the read -- of this way coming see scheduling these also you the rolling If sense which to more

necessary company, to a will definitely follow government if as make we comply the we policy the So the with we clear, will is adjustments. policies And guidelines.

have, we is new you change you. on the Thank the all any what which numbers policy updates. starts of to So if has today based see

Felix Liu

very you Thank much. Okay.


you. Thank

comes from question JPMorgan. Ds your next question. Kim Please from Our ask

Ds Kim

in your indirectly. now, and predict on everyone evening a at question to it's know But what rate be Good us giving enrollment impossible see you point. My ex-amount related organic anyway, in achieve first government a a an versus is student do new versus And one run you think massive a congrats very that growth to of growth? as a referral for you just last online actually bit how or can currently, the we scenario advertisement beat. break industry you still from this advertisements revenue no-advertisement can please I Thank will -- would Then, or significantly, such limiting possibly sustainable rate so out unlikely such of or one a online I could have follow-up. a student little that for tutoring less-advertisement i.e., Hi. be adds much. performance no we environment? would sense have contribution do think whole, new

Rong Luo

you. Thank

talk think, clearly potential before policy It's early too of see I what to impact we is. right that policy. about the

talked I the think and you advertisements online the our promotions online specifically about marketing. when part, looking to and

speaking speaking, are who in a maybe past. frankly think, or have the promotions, I company we frankly advertisements now

well students services. We way we And make the typically and people growth are teach the our satisfied education we so high-quality our we growth. through we we an and That's up company. drive prefer drive typical

marketing, think impact thing So, or as as do online we players player this if one the advertisements we will has in industry. policy what the whole other same I on the industry, in some do

make to know. may So, too be some -- there, what's need or for policies to but today we because on it wait what's based don't something final right so early call are the we clearly requirements judgment over still

On small had thing always channels share online together Peiyou side quarters, branding the attention need I Xueersi is the because actually the more past share the with other school the to we in few class. Xueersi students coming one is from draw

across So, more. and in we the bit XXX little have better top the customer a awareness even cities

directly platform advantages some is which other So, we my classes have and we attract Peiyou to the chance in of players. to have live compared the the students

their When we student retention also healthy. our friends to other students. platform. a receive study high-quality to need need on to will On so their parents studying And they to their the the we we students sure in -- focus be make to serving other a my very encourage how in rates current or is side lot refer is the services platform, can

all So, we believe the still drop-off rate, students to rate, low again, teach well more is high high-quality, make way that. retention the competitive of our only classes and

policy the more and our not hard lot So, future. past or is back few today. clearly of And probably this has when you always the see advertisement policies colors very stay let's But on And we years in industry we again policy in work the challenges the a the go other tuned. changes very to one. give we operations not measure efficiency can to better than

we But you. is services. we very again Thank changed. than focus -- clearly That the made we adjustments. guidelines. with are necessary students we receive to the focus So, fundamentals us high-quality let parents We comply and on for on never

Ds Kim

follow-up Thank sir. with absolutely you. One about our agree That's really helpful you and I question I is may if expansion.

like XX If we before. market equity we that it we driving ask did had Like home Peiyou. you set entering you in I are never and that help I the it cities there. market so Is possible? about nearly couldn't me. the seeing share look new much. we for city And one driving the [Indiscernible], may soon from or That's live that as want cities but to I'm -- we pace strategy? at only up for there want for strategy? opportunity in talking are the center cities what's Thank brand the because specific what's so nearby Peiyou cities years past to And notice offline a two build as base

Rong Luo

Thank you.

matter no think maybe better to equal or in Suzhou the go to I and Yibin you're you has or the equal or students better or study in cities. nearby are Shanghai demand Beijing opportunity

you workloads some to if top we can the be but model have operation the to services the when cover you scaled the to is more Today, us also and or cities you move easier online the percentage demand rest tend only so some have and students also we'll which difference part XXX of or affordable places. teachers very not the -- made difficult is provide there. of elements so high-quality online to in cities flexibility lot and we their the run only to in achieve can cities, be support drivers have the high-quality But to encourages offline to intensive flexible the in equal be more help to future. goals our of provide We -- and scalable. only more access offline from to which well in students teaching and very wish with which the can and we trainings, a And So, the growth the platform enter is services new classrooms the future. the always do the of previously it around

the us which teach thanks give students. end. some into go But possibility to more and this technology more to So, is not places

During see still deal with lot that. of still can merged see need We improve. the a a off-line lot online process, points we we of We to challenges.

So happen. other -- would which us, or this -- several years maybe to two longer is Thank even years years you. the five make take


you. Thank

from ask today Credit comes from Xie Please question Alex question. final your Suisse. Our

Alex Xie

management this my the in congratulations you of and Thank taking on questions Hi. good quarter. performance

So, online. firstly, ask I'd about to like in your ASP

growth significant is think I years. this time in for first to ASP the two business the online achieve

ASP can your expectations say students -- in And on And the low-tier for of you believe status that are that? what reopen? secondly for mentioned please attract So to should would to the I lower update Thank obtained previously you. in them? of you have on rest elaborate center us How approvals And you the Beijing. many learning cities. go your

Rong Luo

issues. That's lose currency of online it you. In the because of Thank the ASP ASP. Yes. That's the the growth. rates That's make for exchange exchange -- me X% rates. because let Online clear the place, first normal our around priced major see now -- stable, school very, our very perspective ASP only QX. stable. in changes terms the Very online don't RMB for increase. is Xueersi ASP the in any X% And in we -- grew

centers only Beijing. the you're today learning reopen of complete. some and still be government which reopened. The to take under approvals, the process I that centers soon have even can't the Beijing approved how think, will estimate I learning get will time to we be asking is rest Secondly, gather about single-digit

we same very the the leverage will online the we platform. requirements off-line use teach students online way do Beijing. centers. with government to and in is learning the comply view guidelines time, Our as their clear to We'll follow But at

pretty And the out new looking So forward rolls stable the we is adjustments. Based differences. see on see the and the far track. also much rates much that big what of and and definitely dropout is all any are pretty the the on follow don't policy today on rates to Thank see policies -- make retention you. quite growth we necessary when we'll we track. and quite We

Alex Xie

Got it. Thank you.


Thank Right. you.

So participating. with we that Thank you our conference conclude for today. for

disconnect. all may You