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Sunlands Technology (STG)

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

Ladies and gentlemen, thank you for standing by and welcome to Sunlands' First Quarter 2021 Earnings Conference Call. At this time, all participants are 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

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

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

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

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

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

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

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

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

Tongbo Liu

quarter first call. to conference Welcome XXXX everyone. Sunlands' Hello,

for the growth of opening million, billings year-over-year XXX.X to in pleased starting RMB the increase. quarter XXXX. strong in are of announce to RMB net We year-over-year half XXXX, XXX.X increase since very second revenues many Group XX.X%. first with that by rose The driven Technology XX.X% rose a with gross revenues Sunlands growth a quarter million, net Gross billings to that had in representing the year-over-year

awareness raising XXX,XXX in gross The its of by product master's to degree new on continued refining offerings, continued achieved surged satisfaction. student oriented performance XX% master's XX% efforts grow our we last year-over-year degree oriented the which Because of the gross diversifying [indiscernible] students. improving enrollments was and with solid XX.X% year. terms Sunlands compared same and rate to year-over-year, of brand XXX.X% focus enrollments, gross a and this strategy, increase Billing over of programs. quarter driven at expanding a a billings In XX.X% billings contributed in approximately to return in total programs year-over-year. significant also

assistance more more full-time this financially master's Our eager relatively test continued provide We are with for offered and courses, limited jobs course cater full-time believe but investment learning. tend to brand to jobs for fact, be more customized Sunlands. with share. stable, to degree programs are time have especially students wider market Students more coupled our demand continue prep who attend by and and in thrust awareness those like offerings, will with Sunlands' to online dependable

to Moreover, are continued skills. last growing level their getting online of is competitive outbreak certification also for and employability. hobby-related to employees, the for focus making segment on the this our year, We as Since of market more comfortable progress in and professional COVID-XX are well. significant people are [indiscernible] attending of and becoming related work they purpose maintaining employment certification improve professional to classes the with attend market courses urgency more opportunities

professional the more factors believe continue China, bode for in vouchers professional According established those education, to certification State In the well of Council than and addition, XX subsidized million the We training certification opportunities policies support on. also as play XXXX. the out in will Chinese to so government business. to were future, our training such vocational multiple provided subsidies,

our of universities a with of of end teachers By training more continue in our XXX to class oriented to remain confident XX.X% product programs we see from XX% teachers committed top first the China in expand strong standards. recruiting to packages. of teaching around STE growth held Chinese have offerings. to and establishing both our professional According efforts channels to such deploying we'll Seventh only momentum China, we level and our National our still total we are in from will quality, percentage encouraging ensured and of the Population teaching satisfaction to that teaching, degree system, studies than ensure survey. Census and programs, database master's level a and students' a is building above, devoted first and teacher sizable rating high certification high compared world. quarter, tier million to and degree to Driven this and competitive in representing the by and the both degrees Furthermore, believe teaching our it notch teaching the fine we the STE compensation is tune is a of or While revenue our extensive reached population continue associated dimensional in record market are has industry. generate to of internal according an company quality case our held of High-level China. X.XX We priority billion templates top pursuing

course in efficiency. academic research better our synergies the which between enhance continue offerings courses her we've upgrading Aside expand AI own academic have path, we to discipline, further technologies. We existing to our accelerate with specialized more order believe courses. continued the to academic new from to in refine our introduced opportunity team, grow, teaching and subsequently our and and and the course framework research academic research research offerings [indiscernible] widen research development will quality, for In assistance improve our improve our our his efforts our overall new of will become or new team and personnel

pave economic [indiscernible] confident the in way and industry. research for snowball the strengthening will academic effect our this position are moat competitive solidifying both We in our

programs. position Looking ahead, master's skills the market and STE skill, endeavoring are our our to leverage in capture economic we benefits oriented solidifying professional programs degree to of while leading

students, also creating stakeholders. learning while run prospects our all tech devoted for turn through the that, delivering the will to our I the to CFO, values are over so our Selena, financials. best to can With We career experience call have to best they

Lu Lv

Hello, Liu. everyone. Tongbo you, Thank

We are pleased revenues for professional our record recognition and net master's bolstered line brand hit momentum. once oriented again first skills quarter our programs rising growth see to and top high, beat as degree a our guidance

ongoing Our and diversification to confidence optimizing student from STE programs sustaining our momentum. our affirms experience this commitment in

expenses, managed to We R&D delivering reductions XX.X% in and also lower XX.X% and costs, G&A respectively.

XX.X% XX.X a year-over-year net first loss result, narrowed RMB million. As to quarter

will to future importantly, growth. promote the our and strategies management rate deliver that most a look to avenues As marketing our sales higher will conversion implementing rate shareholders. keeping we And is eye fuel on team returns referral for to all ahead, target continue department our awareness, while an explore best brand optimal sales

value-added more expenses. and was diversify marketing first tax first XX.X% loss quarter XX.X COVID-XX to first primarily XXX.X income decrease in growth through compensation in was decrease million mainly to walk RMB in due profit XX.X% marketing of authorities second million decreased of administrative related some numbers otherwise in RMB first were are of million in million was RMB XX.X XXX.X in first the the quarter The Basic marketing expenses XX.X% year-over-year. our for quarter of expenses. financial the first the student and, due In of million first of to share million branding XX.X% a first XX.X RMB from RMB quarter, and increased gross quarter the by of in, Net RMB technology one, XX.X expenses The increase RMB Sales the increased XXXX. to from of and XXXX. marketing the increase RMB per year-over-year due offered channels. number to from XXXX our increase the expenses In XXXX. and of development mainly Gross XX.X first of XXX.X to quarter first the of to loss RMB XX in million XXX.X me in to RMB quarter primarily million part relief from by compensation in million million the of XX.X% The personnel RMB the decreased RMB since a XXXX. was unless to RMB to diluted XXXX. XXXX, let XXXX. the first by Cost XXX.X incurred by activities the driven increased quarter decreasing million due half the billings million, as the acquisition The for and The on operating in the XXX.X net the are related quarter Product promotional first primarily RMB in in was expenses representing in XXX.X million first expenses in results year-over-year, spending quarter the XXXX sales first during national decline quarter, two, compensation the mainly decrease in the XX.X increase the XXXX the decrease first quarter XXXX. key by revenues was quarter the quarter revenues to General XXXX. quarter. in All a first RMB to compared activities, RMB of number Now, due XX.X% compensation X.XX product increase million including expenses by XXXX. were an to you quarter from quarter in of RMB noted. increase of of all development net personnel was and with effort. of in and RMB were year-over-year million, the of the in first increases Other comparisons quarter X.X% from XXXX. relevant exemption XX.X million an XXX.X

million of company of XXX.X XX, and investments. March of equivalents the RMB had RMB million As and XXXX, cash short-term XXX.X cash

the million equipment primarily of the with and leasehold of Capital the of compared necessary our compared outlook. million million And XXXX. XX, operations. X As expenditures for incurred RMB RMB deferred were expenditures of XXXX, connection a with the X,XXX.X infrastructure quarter in XX, Capital RMB to IT revenue X.X RMB million December the company in in first had quarter now, XXXX. March with X,XXX.X balance improvement company's were first support as

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

Operator

Instructions]. [Operator

is [ph] Fund question Henry Tree first from Our [ph]. Lee from

Unidentified Participant

[Foreign Language]

Lu Lv

[Foreign Language]

Unidentified Participant

Language] [Foreign

Lu Lv

Language] [Foreign

Unidentified Participant

Language] [Foreign

Lu Lv

Language] [Foreign

Unidentified Participant

Language] [Foreign

Lu Lv

[Foreign Language]

Unidentified Participant

[Foreign Language]

Operator

Chen from next Phoebe from Our comes [ph] Capital [ph]. question CDC

Unidentified Participant

kindly can please [indiscernible] other STE question would provide sector. be breakdown you and first MBA of business the certificate My and

billing gross from lower reason The the than net is revenue second that would be why – QX?

Lu Lv

I the from need first. Maybe answer all question revenue we your gross series Because precollect to second but record period. we the can students, during billing the the

all revenue time. equal our the means the to will that So, gross not billing

Unidentified Participant

From we that's as net than the previous quarter we – always revenue billings from know precollect that what you said, previous nature probably – the quarter. why the of and is gross education observe higher sector, because that

Lu Lv

Yes, let me finish answer. my

So, recognize on billing the depends products. mixture the quite gross speed our to of our

the than this STE. greater faster. than several during the much That of That's the categories certificates say recognition period period the shorter be of development that of billing. the the and past when can higher why time will the will and higher means percentage these the changes, get That quarters, gross MBA two our means, now revenue service shorter. with and is structure You are

Lu Lv

first Could you question? repeat your Sorry.

Unidentified Participant

a of revenue or billing gross of It's sectors. business breakdown different

Lu Lv

similar first It's to question. quite the

XX% XX.X%. repeat. for the for MBA gross structure can category from Our account XX%. The And account percentage and account for growth. of for structure, I the billing That's third STE

revenue? the The revenue mean percentage? is You second

Unidentified Participant

Right.

Lu Lv

last, accounts that Difficulty]. That comes [Technical of the The from XX%. gross revenue, STE for the billing means maybe

Operator

your Pardon and stand line the gentlemen. has It dropped. Pardon me, reconnect. speaker by Thank appears you while we Please patience. ladies for everyone. me,

reconnected ahead. with the have go speakers. Please We

Lu Lv

will structure XX.X%, the billing the the disconnection. question I – the hear be think different. is to MBA structure revenue, to net MBA accounts that from the and angle. for continue from And answer Can third CDC question Capital. me XX.X%. accounts for first accounts third XX.X%. of of will I XX.X% for net one that And is one in About percentage MBA and for for STE billing third the for – gross STE this revenue, accounts regarding accounts the account net XX.X% And Sorry referred gross you one the And the XX%. for the and to STE XX%. XX%. account account

Operator

question-and-answer session. for back our IR questions, representative, Yuhua any will this turn Showing to remarks. this closing At to conference time, no the further conclude Ye, I'd like over

Yuhua Ye

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

Operator

This concludes the conference earnings call.

lines. You may your now disconnect