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Sunlands Technology (STG)

Participants
Yuhua Ye Investor Relations
Tongbo Liu Chief Executive Officer
Selena Lu Lv Chief Financial Officer
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Sunlands’ Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants will be in a listen-only mode. After prepared remarks by the management team, there will be a question-and-answer session. Today’s conference call is being recorded.

If you have any objections, you may disconnect at this time. turn Sunlands’ over IR to today, your like Ye, Yuhua Representative. now the to conference host I’d Please go ahead.

Yuhua Ye

call. and Hello, everyone, our and full conference are and Sunlands’ press fourth Company’s and thank services you year for release via posted XXXX earlier issued online. results were operating joining newswire quarter The in financial today earnings

IR sign distribution list our can the website. You for download earnings up press visiting release our and by

operational performance, the an our On our update initiatives. strategic Liu CEO well provide will as call, Tongbo our as on

Our CFO of first also guidance Selena Lu give an the Lv provide our overview will quarter for and financial XXXX. of performance, our

Following their move into remarks, will the Q&A we session. prepared

statements Before over discussed place call. like trends, the today’s on forward-looking estimates and remind information in Except should based I for I’d and statements reliance the Harbor you conference current herein, this management, statements. matters relation to not the them. it These certain undue of are therefore, historical to you hand are to call contained in Safe of projections, Sunlands’ on

risks uncertainties. Forward-looking in inherent from forward-looking contained factors to differ and actual involve A materially those important number any statement. could statements cause of results

and uncertainties, Tongbo Liu. filings For more about Commission. over our CEO, refer will call to the potential the now to the I information Company’s Securities that, please risks with With Exchange and turn the

Tongbo Liu

XXXX conference Hello, Yuhua. quarter Welcome full to call. you, everyone. year fourth Thank Sunlands’ and

a steady fourth was year unusual quarter. and with the and first While in XXXX both we growth challenges changes, of solid concluded

to demand for pursued net RMBXXX.X the market and operational developing compared skills enhanced fourth growing acquisition the thanks efficiency same period quarter, higher and enhancing and education X.X% diverse In of effectiveness expanded We’re product grows continued overall offerings, programs. categories. and efficiency revenues XXXX, reached on course the our to our the opportunities million, as professional in student strategic curriculum focus improving

in spending course remarkably the of the programs. driving by steady categories over was of on XX.X% the behind our fourth over this growth student year-over-year XXX,XXX student on portfolios The force all to foundation degree expansion enrollment to the Our increased solid new based quarter. further our

enhanced Our user the the exploration also and well quality service strong as of avenues to efficiency contributed growth. acquisition, operating as for diverse

well-prepared Our The X.X robust with XXXX for applicants and masters-degree been we with rates to concluded are oriented pandemic continue uncertainty the the and importance to entrance decline. in intensifies job growing many yield volume national demand. market. XXXX and creating programs industries increasing COVID-XX a and million December the exams to registered continue postgraduate of results admission post-graduate recognition reaching in education. has of high There of impacting in competition handle almost the record The heavy

seeing preparation to more pay for willing are courses. We applicants

growth for who million showed solid and the performance working degree-oriented high-quality of professionals. are master’s number capture our XXXX gross applicants increasing courses with that the increasing XX.X% compared with in strong was tailored of programs helped result our the RMBXXX.X post-graduate fact, In billings, in momentum most XXXX. studies, The of

programs undergraduate-oriented demands authentication. of the to more also We meet developing are changing end

for opportunities life. will options later education and rich offer people undergraduate in looking We their are pursue various to who

further vocational supportive education in our courses, and entrance our [indiscernible] online market witnessed of opportunities roll positioned virus a and cease mix fourth accessible programs, we quarter, In we’ve exam are vocational are University and to has income demand. professional courses more supportive developed will Open our targeting diversify believe to certification preparation we in accepted out and has example, those the and sources for we position. further as Chinese China been the We and meeting STE and consolidate as widely skills education. become The online For ending – of universities government to more courses. China the which addition demand and will continue for we sector continuing quality postal well robust grow growth diversified

professional to effectiveness primarily more hobbies enrollments the general the quality. This acquisition to interests due also courses, and the in we’ve of enables working cultivate to indication. and both New certification with X us we’re which year-over-year, posting programs the working, well sales improved With general quarter similar skills as service for developed of demand last saw service catering year. the We effectiveness, fields. diverse and our enhancing soft helping increase lowest times further education, in began BXB in existing professional our in a fruit. user efficiency first programs portfolio the course of interest increased COVID for in skew improved training to foundation, we more operating during than base efforts up In growing pandemic. as acquisition increase to especially We users solid skills skills, in to personal take our courses driving as through our of these ourselves for opportunities our pursuit we our continue surge course bear efficiency the the demand. portfolio’s of expanded workforce. institutions, notable our and team and for traffic costs, as new and rising market serve the expansion and a we promising way satisfy release product All our advantages curriculum With courses user and further to have further portfolios courses enlarged online, the to corporations efficiency these and saw paved interest growth of new and channel

commitment individual of various increase base, as We market user user customers trained grade further the our are and teachers. high users offering our well education, have both and as acquisition procure first costs. to optimize confident on to With integration channels established penetration our corporate will and procedures targeting quality that the we

teaching class participants their maintained We the held level especially a increased of October, active number which our of contest participatory teaching valuable then to of to and teachers improvement. focus in success, held above In mandate creates encourage motivate further teaching motivate AI exam also in pass for which experienced our In teaching to market quality XX.X% XXXX, annual cutting a have virtuous improved we high we assist sustainable on In year-over-year the We and our students. XXXX. services the rate acquisition, into academic course. learning, leadership. XX%, to and and/or quarter, to our fourth STE is user our edge user order circle applied referrals, a further, The students technology products.

adjust accuracy accordingly. is then students system based scores of study XX%. AI on with practice exam to offer their can able plans Our performance students’ to help an to rate It predict their suggestion

as fourth Further the our predict vast we continue questions questions our most and technology hysterical and analyze and the AI XXXX, XX.X%. the capability. employed and diversified frequently also to analysis maintain database database services products and training. We adaptability exercise test top-notch increased expanded skill In number to the examination the to XXX,XXX enhancing of data will further growth we remain of development the education and for and into using quarter, big your-over-year agility exam we committed representing rollouts of and our

CFO, to I keeping extending and will improving also close as our Selena through operating sales that, as run financials. over well to We With our boosting turn channels. on are the call efficiency, eye a

Selena Lu Lv

to Thank environment. challenging profitability the in growth you, In strategy everyone. Tongbo. a balance deepened business the fourth and Hello, quarter, we our

net rate, X.X% the our efficiency improved the guidance end continue as grow further cost. a Our exceeding and healthy we at high operating revenues optimize of to by

to Our general loss narrowing RMBXX.X million quarter declined contributed million fourth to of XXXX. our RMBXXX.X significant the net and the expenses the in administrative in fourth which XX.X% of year-over-year, quarter from

from XX.X% quarter to fourth considerably of decreased XX.X% margin loss in net XXXX. Our the

Going consistently sustainable growth and create to refine strive value shareholders, forward, order we to well the operation society. continue execution and we the for our will as robust for as in as our and broader long-term sales students

quarter. relief profit in our package on the XXXX. and fourth expenses incurred RMBXX.X from of the The fourth X.X% by of RMBXX.X by our the an number due online net compensation compensation RMBXXX.X RMBXXX.X million Now, by increased mainly the General results value-added The fourth reduced walk in branding XX.X% quarter related the are compensation with income the COVID-XX X.X% million RMBXXX.X Product unless decrease to In development the channels. personnel service was offered X.X% in quarter of key year-over-year RMBXXX.X the in revenue operating of The marketing and in million fourth the loss revenue the decreased in in per personal relevant XXXX. RMBXXX of administrative were All RMBXXX.X me technology XXXX. the activities authorities million part from of and quarter to insurance-related in diluted for to diversify national quarter quarter quarter of in two, are to fourth integrated of RMBXX.X increase XX.X% to RMBXX.X numbers share acquisition was XXXX. the expenses quarter quarter increased and during quarter loss quarter including fourth expenses purchased million, fourth and decrease activities, due one, of and as due increased and million decreased marketing RMBXXX.X RMBXXX.X the comparisons decrease number the primarily million was mainly the some of of year-over-year. million increase marketing students XXXX and by The in quarter the you increase all RMB, the Cost students. increases fourth RMBXX.X quarter fourth fourth of million a to million in incurred promotion million by marketing spending Gross in XXXX. XXXX. exemption expenses expenses was otherwise quarter million sales due efforts. quarter from of the quarter RMBX.X million expenses. our million primarily RMBXX.XX let RMBXXX.X representing for to quarter, more compared the decrease fourth to by quarter from to decreased to fourth was due primarily in fourth net RMBXXX.X fourth RMBXX.X in of fourth million the education noted. the million in XXXX. Basic was development financial In Other fourth to million was costs fourth XX.X% through increased of XXXX. Sales expenses to from in for to product from was the by XXXX. the tax XX.X% a related in Net the year-over-year

short-term of had As XX, of December equivalents cash million RMBXXX.X the RMBXXX.X million investments. and and XXXX, Company of cash

operations. Company’ XX, million, in RMBX.X primarily incurred leasehold million connection fourth expenditures quarter deferred revenue RMBX,XXX.X December As December and the the XXXX, the Capital compared of IT expenditures of million had quarter with fourth improvement balance support of as XXXX. with compared equipment with were Capital RMBX,XXX.X XX, necessary to of in Company the were million a in RMBXX.X XXXX. infrastructure

XXXX please For further more outlook. now for results, earnings our our release full to refer press for financial of details. our year And

Sunlands and million, conditions which be XXX the reflects which XXXX, operating the market, quarter current Company’s This open up change. net like For I’d conditions the market management’s currently year-over-year. would represent and and is subject of Operator? demand, and first revenue to current call of XXX estimates million the are XX.X% the With between based to XX.X% of RMB questions. that, all RMB customer to outlook preliminary increase on to to expect an

Operator

you. Thank

this conclude Ye, question-and-answer our for remarks. [Operator no now the will IR I’d This closing will like Representative, over time, session. to to back begin We At Yuhua Instructions] the question-and-answer turn any session. Showing conference questions.

Yuhua Ye

thank call. look again you, you night. with speaking Good again, We forward today’s joining Once soon. everyone, day for and good to

Operator

call. earnings the conference concludes This

line. you. You may your Thank now disconnect