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Sunlands Technology (STG)

Participants
Yuhua Ye Investor Relations Representative
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 2021 Earnings Conference Call. Today’s conference call is being recorded. I would now like to turn the call over to your host today, Yuhua Ye, Sunlands’ IR Representative. Please go ahead.

Yuhua Ye

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

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

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

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

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

Tongbo Liu

to on industry acquiring Thank to education on year and demand levels, disciplined cost a efforts with improving markets you, quarter specifically, the optimize capture efficient given of continue manner. steady opportunities full a prepared everyone. in challenges leaner to The to a spend healthy Sunlands services year of to organization we was growth that streamline strived measures, and and mix are global and and more concentrate to these products our operations students More XXXX us. strengthened fourth Yuhua. on Hello, ahead control Welcome our full XXXX call. overcome both focus our conference uncertainties macro obstacles we on

record XXXX year, the delighted of high fourth we and commitment As for and our plan a execution, in on steadfast and growth the close a result balanced to full RMBXXX.X of million delivering our with are quarter net million to profitability. clear strategic RMBXXX.X profit

moderation execution Our and our and enrollments in gross the of well improved strategic profitability the reflects student excellence. direction effectiveness amidst new year-over-year billings

performance turn let’s our of the to programs. of major each Now course

take In to and we their terms or have professional of there primary in new the side. credential market who complement skills skills On still certification increasingly hobbies. stay one also programs, potential job through -- huge demand to believe and professionals competitive relevant the only courses, courses from demand and seek we develop not hand, working is on but interests

courses to professional by net the to ongoing Thanks or our learning for extensive and focus of diverse programs in to the billings our looking On part of year-over-year, developing the the XX.X% continue robust quarter. wide groups resources, respectively. quarter XX.X% and have students for fulfill gross interest fourth programs revenues from these and increased a range To range are potential, a other hand, we interest-based these of learning age attracting lifestyle. also as are demand new a who course skill certification during on

forward courses a to we the Going to catalogs course variety of diversify learner will groups. and theater [ph] greater continue our of

continued students of believe share focus post-secondary are of As course increasing our of our product market as programs our degree-oriented to With to a expand, skills the the capture our offerings growth. programs fine demand. working we professionals. master’s breath and we for realize capitalize certificate on depths Most our will respect professional strategically our and growing tune portfolios, programs and these strive shifted courses, to we toward

Exams as and this preparation expanding up by from and X% education. postgraduate will and ongoing admission for preparation growth segment their capable year, in their despite grew increasingly and enrollment is In Annual XX.X% utilize to demand X.X billings our by more in of realizing in on working portfolio year-over-year year-over-year received full are Postgraduate balance difficult, and the education quarter, importance to quarter of a to we number and More age driving setting intensifying. a people courses highly thereby work, of the of the full decrease another year-over-year -- profitability XXXX XXXX our degree-oriented while we programs. continue competitive becomes pandemic-related postgraduate applicants Entrance and optimizing to to year decline turning strategy. record to job of the our of to their the paths in became their the year-over-year leadership our the applicants gross challenges, jumping while us our pressure master’s new in programs student due rate, at solidify continued competition acceptance XX.X% our reflected the revenue odds are by XXXX increasing As our exam our continue tailwind, XXXX of due trend X.X% step student’s mounting master’s respectively. position professional teaching for competitiveness million, terms XXXX, improve approximately and fourth upward enhance career market highly capable increased experienced net to Riding to leverage the for number degree-oriented National MBA course first also China’s teams’ service. leverage

Regarding our services efficiency offerings, quarter. -- the to our remain during we improving and course STE programs, the enriching operating quality service committed

teaching and premium cost to and took spending further the high sales student control driving has respectively. general results enhance and we our growth. measures teaching Thanks to to Given and year-over-year, acquisition cost the our establish Meanwhile, students. improved which measures, with effective methods expenses, expenses driving our efficiency, deliver quality XX.X% marketing turn and and and quarter, in control down during the administrative our structure we X.X% our to effective fourth teaching courses quality continue high system provide a

the investment acquisition we development, cross-selling as into -- on continue Furthermore, strategy for maintaining new their we needs. evidenced in to our in new slight year-over-year efficiency costs adopting a by of expenses development blood while in However, improving product pump the acquisition group, and by increase student in our costs cost effective first focused quarter. and different unique more solutions profile opportunities, marketing remain students fourth and customizing despite leveraging sales channels by X.X%

demonstrated our past With XXXX’s to year bearing resiliency navigating profitability, pleased broader see I society. our and CFO, We’re to financials. to its the Selena will shifting employees, turnaround call the for With we agility In with when the students, to align our both shareholders run in beyond, a challenges will strategy bring fruit turn strategic value XXXX that, to the over continue full already quarters business operations and amid three Sunlands landscape. and XXXX. industry and our objectives our successful our through to

Selena Lu Lv

Thank you, Tongbo. Hello, everyone.

net income operating the performance million and to last X.X% year-over-year expense We in profitability. consecutive quarter, This quarter driven our the our by and million practices. are RMBXXX.X for to due our fourth expenses, excited net of same was period solid XX.X% management of decline in the of the compared growth loss RMBXX.X expense register to year-over-year year, marking third topline

XX XX.X% expanded significantly to fourth -- margin percentage a XX.X% profit points year-over-year up and net a quarter, quarter-over-quarter. the percentage points Our in

to commitment sustainable while and further adopting boosting we long-term aiming reduce ahead, course effective in students, to and costs our our steadfast offering measures efficiency operating achieve premium are to to Looking growth. content services

the for in to; RMBXXX.X related decrease quarter, marketing me noted. million diluted rental quarter are decreased net expenses let quarter results expenses million integrated the administrative one, development due X.X% increase net to quarter mainly exemption on X.X% personnel; Net you declined operating quarter and related the by XXXX. in revenue lower fourth was X.X% to X.X% income first our in part insurance fourth of XXXX, to decrease our with and our In unless walk decreased and compared comparisons the XXXX. expenses are of fourth of two, relief was the fourth an million year-over-year. value-added XXXX. of were Product due with to the branding education compensation to of comprised sales million for compensation the decrease Sales from year-over-year, Basic RMBXX.X Now in authorities through fourth quarter expenses increased from RMBXX.X expenses the marketing financial and share in of for RMBXX.X revenues quarter primarily quarter and our of the XXXX. in all The due the of the compensation XXXX. offered million by quarter the April fourth marketing fourth RMBXX.X were key end spending primarily X.X% students. fourth XX.X% fourth came XXXX. were otherwise decrease in expenses compared net expenses cost XXXX. other RMBX.X XX.X% expenses numbers RMBXX.XX of some in was in the RMBXXX.X development The the RMBXXX.X Product the first by because million package the of income online of were general All an of The number service was per Other the of RMB RMBXX.X reduced to purchased increased COVID-XX declined of by expenses by in quarter, quarter tax Gross our million RMBXX.X in decreased RMBXXX.X RMBXXX.X million, In mainly quarter, and General declined the million RMBXXX.X from revenues related XXXX. was a quarter million quarter fourth in RMBXXX.X from million the activities personnel. million, by year-over-year representing incurred decrease million profit Costs million, in the effort to RMBXXX.X in in of and mainly of a expenses. loss of of was fourth quarter fourth fourth XXXX. quarter fourth as quarter expenses income fourth to by national relevant to to XXXX. compensation RMBXXX.X million and administrative related from and costs million in number personnel. and

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

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

XX.X% of on our press million, to revenues net our quarter the like be are outlook full to on release And now to refer estimate change. and management’s earnings current for of operating the that, With subject and to RMBXXX financial the I’d conditions the reflects year This for RMBXXX decrease Operator? currently for our between all results, XXXX further year-over-year. expects would to questions. to is a market first XX% more demands, outlook, company’s represent details. Sunlands to market, based and up please the conditions For XXXX a call which open million the to preliminary current which of customer

Operator

[Operator Instructions] you. Thank

Operator

no this This closing I time, for further back Ye, for to I’d our like your for am Representative over At questions. session. -- conclude open question-and-answer to closing the conference like IR remarks. showing remarks. will Yuhua, is to the any Yuhua you turn

Yuhua Ye

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

Operator

Thank conference This the you. concludes earnings call.

lines and your have a now disconnect day. wonderful may You