ATA Creativity Global (AACG) 2024 Q3 法說會逐字稿

Greetings. Welcome to ATA Creativity Global's third quarter 2024 financial results call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Alice Zhang with the Equity Group. Thank you. Alice, you may begin.

問候。歡迎參加 ATA Creativity Global 2024 年第三季財務業績電話會議。（操作員指示）提醒一下，本次會議正在錄音。現在我很高興向大家介紹 Equity Group 的 Alice Zhang。謝謝。愛麗絲，你可以開始了。

Thank you, operator. Good morning to all of you joining us from China, and good evening to all of you joining us from the United States.

謝謝您，接線生。來自中國的各位朋友早安。

Please be advised that the discussions on today's call may include forward-looking statements. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

請注意，今天電話會議上的討論可能包括前瞻性陳述。此類前瞻性陳述涉及某些風險和不確定性，可能導致實際結果與前瞻性陳述中的結果有重大差異。

Please refer to the company's most recent SEC filings for a more complete description of various factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise.

請參閱該公司最新的 SEC 文件，以獲得可能影響這些預測和假設的各種因素的更完整描述。本公司不承擔因新資訊、未來事件或其他原因更新前瞻性陳述的義務。

Regarding the disclaimer language, I would also like to refer you to slide 2 of the conference call presentation, which is accessible via the IR section of ACG's website. A simultaneous audio webcast is also accessible via the IR section of ACG's webcast -- of ACG's website, including the replay which will be available for the next 90 days.

關於免責聲明，我還想請您參閱電話會議簡報的第 2 張投影片，您可以透過 ACG 網站的 IR 部分存取該投影片。也可透過 ACG 網站 ACG 網路廣播的 IR 部分存取同步音訊網路廣播，其中包括將在未來 90 天內提供的重播。

ACG's Chairman and CEO, Mr. Kevin Ma, will start this call highlighting the company's third quarter and nine-months key operational and financial achievements. CFO, Mr. Ruobai Sima, will provide an overview of financial and operating results for third quarter and nine months 2024, expectations for the remainder of 2024 and full-year guidance. President, Mr. Jun Zhang, will conclude the prepared remarks with an update on the company's long-term growth strategy before opening the floor for questions.

ACG董事長兼執行長馬凱先生將在電話會議上重點介紹公司第三季和前九個月的主要營運和財務成就。財務長司馬若柏先生將概述 2024 年第三季和前九個月的財務和營運業績、2024 年剩餘時間的預期以及全年指引。總裁張軍先生將在發言結束時介紹公司長期發展策略的最新情況，然後回答大家的提問。

For those of you following the company slide presentation, please refer to the slides for further details.

對於那些關注公司幻燈片演示的人來說，請參閱幻燈片以了解更多詳細資訊。

With that, I'll turn the call over to ACG's Chairman and CEO, Mr. Kevin Ma. Please go ahead, Mr. Ma.

現在，我將把電話轉給 ACG 的董事長兼執行長 Kevin Ma 先生。馬先生，請說。

Thank you, Alice. Welcome, everyone. Good evening to those in America. I appreciate everyone's time.

謝謝你，愛麗絲。歡迎大家。各位美國人晚上好。我感謝大家的時間。

As Alice mentioned, please refer to our earnings deck available on the IR site of our website as we go through our prepared remarks.

正如愛麗絲所提到的，在我們準備好發言時，請參閱我們網站 IR 網站上提供的收益簡報。

During the third quarter of 2024, ACG continued to focus on providing quality service to our valued students and parents, developing product and service offering tailored to our students growing and evolving needs, exploring new partnership with institutions within the art industry as well as seeking collaboration opportunities through different industries.

2024 年第三季度，ACG 繼續專注於為我們尊貴的學生和家長提供優質服務，開發滿足學生不斷增長和變化的需求的產品和服務，探索與藝術行業機構的新合作夥伴關係，並尋求透過不同行業進行合作的機會。

As the last term, third quarter of 2024 was a strong quarter for ACG in terms of net revenues and student enrollment. We reported double-digit growth in net revenues and overall student enrollment rates. This is highlighted by strong student enrollment for our portfolio training programs as well as increased hour deliveries during the period.

與上一季一樣，2024 年第三季對於 ACG 來說，在淨收入和學生入學率方面表現強勁。我們報告淨收入和總體學生入學率均實現了兩位數的成長。突出表現在我們的投資組合培訓計畫的學生報名人數大幅增加以及同期培訓時間的增加。

For nine months 2024, we saw equal strong year-over-year improvement on net revenues, overall enrollment rate, and credit hour deliveries, all increased by more than 20% compared to nine months 2023.

2024 年頭九個月，我們看到淨收入、整體入學率和學分交付量同比同樣強勁增長，與 2023 年前九個月相比均增長了 20% 以上。

Portfolio training service remains our main source of revenues, contributing more than 70% of our total revenues for both third quarter 2024 and the nine months 2024.

投資組合培訓服務仍然是我們的主要收入來源，占我們 2024 年第三季和 2024 年前九個月總收入的 70% 以上。

Within this part of the service, we continue to encourage students to sign up for project-based programs. As a result, this segment continues to account for the majority of our portfolio training services, responsible for 70% of total credit hours delivered during the third quarter.

在此部分服務中，我們繼續鼓勵學生報名參加基於專案的課程。因此，該部門繼續占我們投資組合培訓服務的大部分，佔第三季總學時的 70%。

Thanks to our continuous effort in developing various programs and offerings, we are also seeing a growing interest in other parts of our service. Student enrollments for research-based learning and overseas study counseling increased by more than 20% compared to the third quarter 2023.

由於我們不斷努力開發各種計劃和產品，我們也看到人們對我們服務的其他部分的興趣日益濃厚。與2023年第三季相比，研究型學習和海外學習諮詢的學生入學人數增加了20%以上。

For this summer, our high-end projects included the second session of the United Nations Sustainable Development Goals Arts Boot Camp; two intangible cultural heritage camps in China; one US campus tour; and two summer camps in London and Tokyo.

今年夏天，我們的高端計畫包括第二屆聯合國永續發展目標藝術訓練營；中國兩個非物質文化遺產營；一次美國校園參觀；以及在倫敦和東京舉辦的兩個夏令營。

In addition, for the first time since the pandemic, apart from our usually online classes, we also hosted the ACG Summer Lab, providing students with the opportunity to study in person with lecturers joining us from art institutions and the art field in general.

此外，除了通常的線上課程外，我們還首次在疫情爆發後舉辦了ACG夏季實驗室，為學生提供與來自藝術院校和藝術領域的講師一起面對面學習的機會。

We believe the capability to provide us with various experience is one of ACG's core competencies in the (inaudible), which is built upon our continuous investments and close monitoring of the art trend in academia and the industry as well as a strong global partnership network that allow us to world-class resources.

我們相信，為我們提供各種體驗的能力是 ACG 在（聽不清楚）領域的核心競爭力之一，這種競爭力建立在我們持續的投資和對學術界和業界藝術趨勢的密切關注以及強大的全球合作夥伴網絡之上，這些網絡使我們能夠獲得世界一流的資源。

During third quarter 2024, we continued to expand our partnership network by devising new strategic partnership with Leeds Conservatoire in the UK and also the Star Educational Technology, which Jun will expand on later.

2024 年第三季度，我們繼續擴大合作夥伴網絡，與英國利茲音樂學院以及星空教育科技建立了新的策略合作夥伴關係，Jun 稍後將對此進行擴展。

With that, I will hand over the call to Sima for a detailed overview of our financial and operating results for the third quarter and nine months 2024 and our guidance for fiscal year 2024.

說完這些，我將把電話交給西瑪，讓他詳細概述我們 2024 年第三季和前九個月的財務和營運業績以及 2024 財年的指引。

Thank you, Kevin, and I will start with third quarter and nine months key financial metrics.

謝謝凱文，我將從第三季和前九個月的關鍵財務指標開始。

Total net revenue for third quarter 2024 were RMB67.3 million, an increase of 13.1% from RMB59.5 million in third quarter 2023, which was primarily due to increased revenue contributions from research-based learnings and portfolio training services.

2024年第三季總淨收入為人民幣6,730萬元，較2023年第三季的人民幣5,950萬元成長13.1%，這主要由於基於研究的學習和投資組合培訓服務的收入貢獻增加。

Gross profit from third quarter 2024 was RMB30 million, an increase of 2.6% from RMB29.2 million in the third quarter 2023. Gross margin was 44.6% during third quarter 2024 compared to 49.2% in the prior year period. The decrease in gross margin was mainly a result of higher costs related to more teaching staff hired as compared to third quarter 2023 to accommodate increased numbers of students and the larger outsourcing costs related to research-based learning services.

2024年第三季毛利為人民幣3,000萬元，較2023年第三季的人民幣2,920萬元成長2.6%。2024 年第三季毛利率為 44.6%，去年同期為 49.2%。毛利率下降主要是由於與 2023 年第三季相比，為容納更多學生而僱用更多教學人員導致的成本增加，以及與基於研究的學習服務相關的外包成本增加。

Total operating expenses was RMB47.7 million in third quarter of 2024, an increase of 28.4% from RMB37.1 million in the third quarter 2023. The increase was primarily due to an RMB 5.4 million increase in sales expenses related to increased number of sales personnel and marketing events as well as RMB 5.6 million increase in general and administrative expenses related to increased professional fees and business expansion-related investments.

2024年第三季總營業費用為人民幣4,770萬元，較2023年第三季的人民幣3,710萬元成長28.4%。成長的主要原因是，與銷售人員增加和行銷活動增加有關的銷售費用增加了 540 萬元人民幣，以及與專業費用和業務擴張相關投資增加有關的一般及管理費用增加了 560 萬元人民幣。

As a result, loss from operations in the third quarter 2024 was RMB17.6 million compared to RMB7.9 million in the third quarter 2023. Net loss attributable to ACG during third quarter 2024 was RMB 14.7 million compared to RMB7.3 million in the prior year period.

因此，2024 年第三季的營業虧損為 1,760 萬元，而 2023 年第三季的營業虧損為 790 萬元人民幣。2024 年第三季歸屬於 ACG 的淨虧損為 1,470 萬元，去年同期為 730 萬元。

Turning to nine months 2024. Total net revenues increased 21.1% to RMB167.1 million from RMB138 million in the prior year period. The increase was primarily attributable to increased contribution from portfolio training, research-based learning and overseas study counseling services.

即將進入 2024 年九個月。總淨收入由去年同期的1.38億元增加至1.671億元人民幣，增幅為21.1%。成長主要歸因於投資組合培訓、基於研究的學習和海外學習諮詢服務的貢獻增加。

Gross profit for nine months 2024 was RMB77.6 million, an increase of 24.6% from RMB52.3 million in nine months in 2023. As a result of increased revenues during nine months 2024, gross margin slightly improved to 46.4% from 45.1% in nine months 2023.

2024年九個月的毛利為人民幣7,760萬元，較2023年九個月的人民幣5,230萬元成長24.6%。由於 2024 年九個月的收入增加，毛利率從 2023 年九個月的 45.1% 小幅提高至 46.4%。

Total operating expense was RMB137.7 million in nine months 2024, an increase of 22% from RMB112.9 million in nine months 2023. The increase was primarily due to RMB14.4 million increase in sales expenses related to increased number of sales personnel to drive sales growth as well as RMB10.5 million increase in general and administrative expenses related to increased professional fees and business expansion-related investments.

2024年前九個月的總營業費用為人民幣1.377億元，較2023年前九個月的人民幣1.129億元增加22%。成長的主要原因是，為推動銷售成長，增加銷售人員數量導致銷售費用增加 1,440 萬元人民幣，以及與專業費用和業務擴張相關投資增加相關的一般及管理費用增加 1,050 萬元人民幣。

As a result, loss from operations in nine months 2024 was RMB60 million compared to RMB50.6 million in nine months 2023. Net loss attributable to ACG in nine months 2024 was RMB49.4 million compared to RMB42.2 million.

因此，2024 年九個月的營業虧損為人民幣 6,000 萬元，而 2023 年九個月的營業虧損為人民幣 5,060 萬元。2024年九個月歸屬於ACG的淨虧損為人民幣4,940萬元，而去年同期為人民幣4,220萬元。

Moving to the balance sheet highlights. As of September 30, 2024, we had RMB39.4 million in cash and cash equivalents; total assets of RMB459.4 million; total liabilities of RMB393.2 million; and total shareholders' equity of RMB66.2 million.

轉向資產負債表重點。截至2024年9月30日，我們擁有現金及現金等價物人民幣3,940萬元；總資產4.594億元；總負債3.932億元；股東權益合計6,620萬元。

Moving on to year-to-date enrollment trends. For nine months 2024, total student enrollment increased by 20% as compared to nine months 2023, supported by strong student interest growth in both ACG portfolio training and all other programs.

繼續討論年初至今的入學趨勢。2024 年前九個月，與 2023 年前九個月相比，學生總入學人數增加了 20%，這得益於學生對 ACG 投資組合培訓和所有其他課程的興趣強勁增長。

Portfolio training student enrollment for nine months 2024 increased by 20.7% to 2,220, and all other program student enrollment for nine months 2024 increased by 19.1% to 1,523.

2024年前九個月投資組合培訓學生入學人數成長20.7%，達到2,220人，2024年前九個月所有其他課程學生入學人數成長19.1%，達到1,523人。

Credit hours delivered for portfolio training services is historically higher due to seasonal reasons and students early start their portfolio creation work in the second half of the year for enrollment in the following fall semester.

由於季節原因，作品集培訓服務的學分歷來較高，學生們早在下半年就開始了作品集創作工作，以便在下一個秋季學期入學。

For nine months 2024, credit hours delivered significantly increased by 28.5%, whereby time-based programs credit hour increased by 29% and progress-based programs credit hour increased by 28.3%.

2024 年 9 個月內，所提供的學分顯著增加了 28.5%，其中基於時間的課程學分增加了 29%，基於進度的課程學分增加了 28.3%。

We remain committed to offering high-quality services across our business line and to students who seek guidance and support in their pursuit of study and career.

我們始終致力於在我們的業務線上為尋求學習和職業指導和支持的學生提供高品質的服務。

With that, let's move into guidance to full year 2024. We believe we are on track to achieve our full-year 2024 revenue guidance for RMB233 million to RM255 million, representing a year-over-year increase of 5% to 15% for full year 2023.

有了這些，讓我們進入 2024 年全年指導。我們相信，我們預計將實現 2024 年全年收入預期，即 2.33 億元至 2.55 億令吉，相當於 2023 年全年同比增長 5% 至 15%。

Our belief is based on the strong enrollment trend we are seeing and our ability to expand current services and offering.

我們的信念是基於我們所看到的強勁的招生趨勢以及我們擴展現有服務和產品的能力。

For the remainder of 2024, portfolio training services will continue to serve as the primary growth driver for our business as well as important student acquisition channel for our other business.

在 2024 年的剩餘時間裡，投資組合培訓服務將繼續作為我們業務的主要成長動力以及我們其他業務的重要學生獲取管道。

I'd like to turn it over to Jun who will expand upon our long-term growth strategy. Jun, please go ahead.

我想把這個機會交給 Jun，他將詳細說明我們的長期成長策略。Jun，請繼續。

(spoken in foreign language)

（用外語說）

(interpreted) Thank you, Sima. Our growth strategy surrounds four main pillars: Organic growth; strengthening and expanding geographic footprint; launch of new services; and potential M&A opportunities.

（翻譯）謝謝你，司馬。我們的成長策略圍繞著四大支柱：有機成長；加強和擴大地理覆蓋範圍；推出新服務；以及潛在的併購機會。

Starting with organic growth. As Sima mentioned, we have been encouraging students to enroll in our portfolio training services to join the project-based track, which offers more flexible and customizable programs based on student needs.

從有機成長開始。正如司瑪所提到的，我們一直鼓勵學生參加我們的投資組合培訓服務，加入基於專案的課程，該課程根據學生的需求提供更靈活和可自訂的課程。

The overall strong enrollment trend that we're seeing in today's market is also exciting. We see more students from portfolio training services showing interest in our value-added offerings, such as research-based learning and overseas study counseling services, resulting in increased student enrollments and hence, increased revenue contribution.

我們在當今市場上看到的整體強勁的入學趨勢也令人興奮。我們發現越來越多來自組合培訓服務的學生對我們的增值產品（如基於研究的學習和海外學習諮詢服務）感興趣，從而增加了學生入學人數，並因此增加了收入貢獻。

The engagement of our teaching staff in sales and product design process has also helped us improve program quality and boost sales.

我們的教學人員參與銷售和產品設計過程也幫助我們提高了課程品質並提高了銷售額。

We have expanded training center coverage in existing cities and concentrated regional resources on larger centers.

我們擴大了現有城市的培訓中心覆蓋範圍，並將區域資源集中在較大的中心。

For example, we expanded our Shanghai and Beijing centers to serve more students during 2024. We recently opened the ACG London Center, extending ACG services to our students who have been admitted to UK colleges and are just embarking on their overseas life. At the London Center, we provide academic assistance, student and an online networking events as well as to create support in addition to helping students settle down on their first few months of studying abroad.

例如，我們擴大了上海和北京的中心，以便在 2024 年為更多的學生提供服務。我們最近開設了ACG倫敦中心，為那些已經被英國大學錄取並剛開始海外生活的學生提供ACG服務。在倫敦中心，我們提供學術援助、學生和線上交流活動以及支持，並幫助學生在出國留學的頭幾個月安頓下來。

Innovation and introduction of new research-based learning programs have been crucial to growing that line of business. To that end, we actively invest and explore new trends in art from computer-based arts majors such as visual art, user interaction, gaming design and AI-generated content to new art themes and career options such as art therapists, green architecture, urban design and so on.

創新和引入新的基於研究的學習計劃對於該業務的成長至關重要。為此，我們積極投資和探索藝術的新趨勢，從視覺藝術、用戶互動、遊戲設計和人工智慧生成內容等基於電腦的藝術專業到藝術治療師、綠色建築、城市設計等新的藝術主題和職業選擇。

We continue to extend our global reach through growing our domestic and international network of institutional partnership. In third quarter 2024, we signed a new institutional partnership with Leeds Conservatoire, a prestigious music conservatory in the UK whereby Leeds Conservatoire lecturers will work with ACG in providing application insights and portfolio preparation tips to ACG students.

我們透過擴大國內和國際機構合作夥伴網絡不斷拓展我們的全球影響力。2024 年第三季度，我們與英國著名音樂學院利茲音樂學院簽署了新的機構合作夥伴關係，利茲音樂學院的講師將與 ACG 合作，為 ACG 學生提供申請見解和作品集準備技巧。

In addition, we also recently initiated a strategic cooperation with Oasis Star Educational Technology to jointly promote the integration of art and artificial intelligence. Utilizing Oasis Star's AI technologies and cloud platform, we expect to introduce AI support in upgrading our existing offerings and service delivery model, fueling our long-term growth via better products and services to our students.

此外，我們近期也與綠洲星教育科技達成策略合作，共同推動藝術與人工智慧的融合。利用Oasis Star的AI技術和雲端平台，我們希望引入AI支援來升級我們現有的產品和服務交付模式，透過為學生提供更好的產品和服務來推動我們的長期成長。

This October, we again hosted the United Nations Sustainable Development Goals Arts Boot Camp, marking the third session of this series since we initially introduced it this May.

今年10月，我們再次舉辦了聯合國永續發展目標藝術訓練營，這是我們自今年5月首次推出該系列活動以來的第三屆。

We also hosted our Shanghai Fashion Week program in October, bringing students to forefront of fashion week for students interested in future study and career in fashion design and brand management.

我們還在十月舉辦了上海時裝週項目，讓有志於未來從事時裝設計和品牌管理學習和職業的學生走近時裝週的前沿。

During October, ACG toured 10 cities in China as part of our awesome art education exhibition, inviting professors from institutions such as Rhode Island School of Design to give them speeches and share application tips and ACG alumni to share study experience and career advice.

十月份，ACG作為我們精彩的藝術教育展的一部分在中國10個城市巡迴展出，邀請了羅德島設計學院等機構的教授進行演講並分享申請技巧，以及ACG校友分享學習經驗和職業建議。

We remain focused on growing our student registration, expanding demographics from students who want to pursue overseas study opportunities, to working professionals who look to expand their career opportunities, and to the general public who are willing to explore multiple topics of art.

我們將繼續致力於增加學生註冊人數，擴大學生群體，從想要尋求海外留學機會的學生，到尋求拓展職業機會的專業人士，再到願意探索多種藝術主題的普通民眾。

ACG's mission remains to act as a trusted partner for our students regardless of where they are in their academic or career path. We're well equipped to do so, and we'll continue to invest in our infrastructure and the teaching team to always make high-quality offerings available to our students.

ACG 的使命仍然是成為我們學生值得信賴的合作夥伴，無論他們處於學術或職業道路的哪個階段。我們有能力做到這一點，並將繼續投資於我們的基礎設施和教學團隊，始終為我們的學生提供高品質的服務。

With that, operator, let's open it up for questions.

接線員，現在我們可以開始提問了。

(Operator Instructions) There are no questions at this time. I would like to turn it back over to Kevin for closing remarks.

（操作員指示）目前沒有問題。我想將發言權交還給凱文，請他作最後發言。

Directly to us or our Investor Relations firm, the Equity Group. We are always available to speak to investors, and I look forward to speaking with you all during our next earnings call. Thank you.

直接向我們或我們的投資者關係公司 Equity Group 提出。我們隨時願意與投資者交談，我期待在下次財報電話會議期間與大家交談。謝謝。

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

謝謝。今天的會議到此結束。現在您可以斷開您的線路了，感謝您的參與。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本記錄中標記（翻譯）的部分是由現場通話中的翻譯人員說的。翻譯由贊助此活動的公司提供。