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Sunlands Technology (STG)

Participants
Yuhua Ye IR
Tongbo Liu CEO
Selena Lu Lv CFO
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Sunlands' Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After prepared remarks by management 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. to Ye, call Sunlands' like host to now Yuhua today, IR would turn over the your I representative. Please go ahead.

Yuhua Ye

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

be Tongbo can the session. earnings Participants for and by list distribution IR Selena download Management press website. up Lu Mr. the a You will prepared visiting today's will on our our CFO, will begin Q&A call our with conclude Liu; remarks, release and CEO, call our Lv. sign and with

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

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

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

Tongbo Liu

earnings conference everyone, Hello, Yuhua. and thank quarter you call. you, XXXX Sunlands' Thank joining for third

with pleased our financial are We quarter metrics. third

continued decline to a enrollments year-over-year new respectively, gross during loss to profitability of We net compared net long-term XX.X our period net XXX.X RMB last balanced our XXX.X despite execute million which profit strategy. and million Our and in million the growth evolving are and year-over-year and X.X% billings, recorded the XX.X% XX.X% industry dynamics. revenues attributed grew RMB efforts year to with same RMB of

tutoring have tenants acquisition, companies have resurgences and With operations the operating improve taken create to recovery, efficiency and our pandemic the for prompting to landscape, new become and long-term upscaling. to broader industry continue challenges of enrichment dynamics increase business back mix, competitive steps in This education a implementation talents with professionals execute regulations. in rescaling reducing in also the reduce increasing quarter, our education regions third our product after-school have to many services, the of in and optimizing talent hours the are and With this joining evolving to profitability and competitiveness COVID-XX ultimately growth and more enhance balanced seek their competitiveness for business through led economy their to expectations prudent to students enhancing focusing acquisition of improving efficiency. and we As strategy courses so number after certain and further the the hires. by costs working companies costs. rapidly to China end K-XX continue selecting labor more China's on reached market respect candidates Meanwhile,

rather user growth only. quality pursuing are We than scale

programs and quarter. certificate maintained their during momentum skills the professional growth Our

prioritized and to net interest-based The XX.X% groups, across students a breadth degree-oriented to [Technical refine endeavor XX.X% the which people user gross range as that provide platform course while as more our of better met and student offerings decreased also certain our premium course programs, diverse course driven XXX.X% year-over-year, new endorse as age expand Our experience, year-over-year are constant base. a relentless increased we more quality with and revenue low learning, demand by respectively, our revenues further our our we We XX.X% a we learnings fulfill ages. all could and enrollments We billings in offerings and well efforts to adoption year-over-year, our Difficulty] master's positioned with reflect of believe help billed skills [Indiscernible] demand increase catering achieved with content. growing our to student's gross by growth. appears in wider in our of and respectively, are of XX.X% for

forming remains global looking However, we made our at expect we this universities footprint grow And market. continue during continue their exam to the time, more opportunities course to number to degree managers, the acquire their learning portfolio strongly market. given as the expand skills priority with will our for quarter capture huge course for partnerships be additional momentum Demand diversify in to them see continue further same education. space. strong, the we level and by progresses. and preparation encouraging and middle growth goals the sales overseas and MBA segment our senior in a [MBA] Notably, large employment through growth Helping a to potential solid or sharpen management we knowledge competitive to motivated of to students and are achieve

as lifeline for help achieve billings STE our optimize gross We believe to STE programs and a and contribute the our due education. things new for China's to continued growth regulations to partially mix, product and also enrollments healthy society. and which to these licensing sustainable regulation was effort advertisement moderated, strove to now build we industry the a Turning will

our and monitor we'll while students. with quality courses We comply regulations and continue strict and to have implemented rules relevant compliance standards to providing

In attractive third learning students providing rewarding to and the [broader], a adopted stringent with goal and quarter, our plans enhance of experience. incentive operations more addition, in policies the we services

vary improvement cost meaningful achieved and acquire more reduction growth. and enhance different technology maintained acquisition segments leveraged We needs innovative our expenses. process student realize as cost user to to linears best new and this We to X We profitability the students' efficiency in course also compliance to optimize value. programs our natural also offerings and marketing with various acquisition continue medium improving tools. to market among the cost-effective we remarkable cost effective efficiency, effective, targeted on of the for centers XX.X% embracing regulation repurchase consecutive across capitalize student to opportunities a utilizing increase with resulting further lifetime in cost-selling operating the implemented drop to by rate quarters enriched tools the structure We year-over-year students

We will on and quality will these our of Selena, refine linears the prepared CFO, you, drive my please? turn I build [efficiencies] remarks. further and Thank That growth. to review call continue to the for concludes to Selena our financials.

Selena Lu Lv

call. Hello, quarter Tongbo. attending you, Thank third for everyone, thank Sunlands' and you conference

which registered by our master's skills top year-over-year expenses XX.X% net XX.X Notably, of degree-oriented expenses. third from sales in in decreased are line reduction and quarter year-over-year. also by high. reaching a significantly growth, benefited to We marketing encouraged led Profits control and our by efficient operating profit continued points professional which Driven a measures, percentage profitability programs. new a mainly contributable sustained the as to revenues year-over-year percentage cost net

for forward, optimization Going prepare sustainable mix and which we us enhancement, continue product improvement, will to on opportunities challenges operating service pursuing ahead will focus while and the efficiency growth.

XXX.X in in expenses. third RMB million Now RMB incurred the The XX.X XXXX primarily due I increased relevant quarter XXX million third as third due Other a XXXX. compensation the expenses. for X.X% decrease of was million by to the The a RMB was third in XXXX of in by would income third number the Net the and lower to the number third X increase XXXX, spending decrease net the million sales In administrative for to from expenses XXXX. our decrease was Product RMB in quarter like third education XXXX decrease of two, on RMB in by quarter end of -- to due by the of effort quarter XXX.X income online marketing from Sales to XXX.X with decreased quarter net expenses million. in detail. insurance-related expenses to RMB the XXXX. results third because third compensation million quarter the XXX.X was gross was the to XXX.X XXXX. mainly share million in profit branding was from in quarter part through representing COVID-XX financial XXXX. income our the Other costs XX million of students. and Gross million third development XXX.X package of XX.X% income expenses third in XX.X% third compared compared in XX.X% million due third quarter integrated value-added RMB XXXX. tax revenues XXXX. of decrease from for million the April authorities quarter RMB The XXXX XXXX. increases third of third General XX.X consumption quarter of from million, RMB In related activities; the quarter XXX.X mainly to quarter XXXX. in The in XXXX XXXX, offered of service and of was with XX.X% marketing RMB in expenses was of of XX.X loss quarter in of operating XX.X of one, XX% to: RMB XX.X increased quarter by billings million in RMB in by comprised reduced to decreased were the by for to quarter mainly XXXX National third RMB and and third to XXXX. in XX.X relief decreased revenues decreased the of RMB The quarter XX.X our of of third of of million came RMB in was the decrease of quarter from XXXX of purchased XXX.X marketing Cost decreased an the third the quarter RMB million million of quarter from since XX.X the first to rental of of XXXX. driven of decrease by third XX.X% RMB personnel. was The year-over-year compensation a XXXX mainly RMB in XXXX quarter second primarily mainly the the the million quarter growth decrease half the the million RMB XXXX million by the

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

the X.X of the the September Capital support Capital X,XXX.X XXXX. a connection third XX.X the were company equipment company's to RMB XXXX expenditures quarter had necessary in operations. and quarter revenue RMB of RMB balance with IT third XX, the improvement leasehold million of were in incurred with million. in deferred million compared As expenditures XXXX, infrastructure of primarily

details. market, which first XXX financial would press refer million please between XXXX, represent RMB For and further Sunlands results, expects revenue the fourth is demand, our operating conditions release for year-over-year. earnings market company's management's and of on questions. Operator? currently to outlook to based to outlook, the call With net subject more XXX of estimate of our XXXX RMB million, X.X% This current our current open increase the quarter are the months conditions And the -- which now for X.X% change. X an to be for of customer and of and that, like to all to preliminary reflects I'd

Yuhua Ye

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

Operator

This concludes the earnings conference call.

Thank You disconnect now may line. you for attending. your