Bright Scholar Education Holdings Ltd (BEDU) 2024 Q3 法說會逐字稿

Hello, ladies and gentlemen, thank you for standing by for Bright Scholar's third quarter of fiscal 2024 earnings conference call. (Operator Instructions) Today's conference call is being recorded. I will now turn the call over to your host for Piacente Financial Communications, Andrea Guo, IR Counsel for the company. Please go ahead, Andrea.

大家好，女士們、先生們，感謝你們出席博實樂2024財年第三季財報電話會議。（操作員指示）今天的電話會議正在錄音。現在我將把電話轉交給 Piacente Financial Communications 的主持人、該公司的 IR 法律顧問 AndreaGuo。請繼續，安德里亞。

Thank you very much. Hello, everyone, and welcome to Bright Scholar earnings conference call for the third quarter of 2024 fiscal year. The company's financial and operational results were released earlier today and are available online by visiting the IR section of our website ir.brightscholar.com. Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995.

非常感謝。大家好，歡迎參加博實樂2024財年第三季財報電話會議。該公司的財務和營運業績於今天早些時候發布，可透過造訪我們網站 ir.brightscholar.com 的 IR 部分在線查看。請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。

Forward-looking statements involve inherent risk and uncertainties. As such, the company's results may materially differ from today's fields. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the US SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

前瞻性陳述涉及固有風險和不確定性。因此，該公司的業績可能與當今的領域有重大差異。有關這些以及其他風險和不確定性的更多資訊包含在該公司向美國證券交易委員會提交的招股說明書和其他公開文件中。除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。

Additionally, but product earnings press release and this conference call include discussions of unaudited GAAP and non-GAAP financial measures. First quarter earnings press release contains a reconciliation of the unaudited non-GAAP measures. Please also know that all numbers are in RMB. Participants on today's call will include our Chief Executive Officer, Mr. Robert Niu, who will provide a company overview and update on our strategic initiatives with highlights from the quarter; our Chief Financial Officer, Ms. Cindy Zhang, will then provide details on the company's financial results for the period. We'll then open the call for questions.

此外，產品收益新聞稿和本次電話會議還包括對未經審計的 GAAP 和非 GAAP 財務指標的討論。第一季財報新聞稿包含未經審計的非公認會計準則指標的調節表。另請注意，所有數字均以人民幣為單位。今天電話會議的參與者將包括我們的執行長牛羅伯特先生，他將提供公司概況和我們策略舉措的最新情況以及本季度的亮點；隨後，我們的財務長 Cindy 張女士將詳細介紹公司本季的財務表現。然後我們將開始提問。

I will now turn the call over to Bright Scholar Chief Executive Officer, Mr. Robert Niu. Please go ahead, sir.

我現在將電話轉給博實樂執行長牛志剛先生。請繼續，先生。

Hello, everyone, and thank you for joining us on today's call. We are pleased to announce that Bright Scholar achieved solid quarterly results, amid uncertain and evolving external environment in the third fiscal quarter. Our strategic execution was unwavering propelling our dedicated initiatives that fueled our global business. We also made headway in optimizing our organizational structure, which improved our operating efficiency and drove another quarter of positive adjusted net income.

大家好，感謝您參加今天的電話會議。我們很高興地宣布，博實樂第三財季在外部環境不確定且不斷變化的情況下取得了穩健的季度業績。我們的策略執行堅定不移地推動我們的專門計劃，推動了我們的全球業務。我們在優化組織結構方面也取得了進展，這提高了我們的營運效率，並帶動調整後淨利再成長一個季度的正值。

Our total revenues grew 6% quarter-over-quarter, led by on-going growth in our dominant overseas schools business. This growth is testament to our business resilience and vitality. In addition, our further enhanced utilization of our facility and teaching resources with utilization rate of our overseas schools increasing to 62% for the quarter, leveraging our established global network of schools and ecosystems. We believe we can accelerate our overseas revenue growth and create a sustainable value for both customers and shareholders over the long term.

在我們占主導地位的海外學校業務持續成長的帶動下，我們的總收入環比增長 6%。這種成長證明了我們的業務彈性和活力。此外，我們進一步提高了設施和教學資源的使用率，並利用我們已建立的全球學校網路和生態系統，海外學校的使用率在本季度提高到62%。我們相信，我們能夠加速海外收入成長，並為客戶和股東創造長期可持續的價值。

Now I'd like to share some details from the quarter of each of our business segments. First, overseas schools sustained a solid growth momentum and remain our strongest segment. Revenue was up 19.4% year over year in the third fiscal quarter, extending the double digit over year-over-year growth streak. This segment has achieved for the past five consecutive quarters. This business is our growth engine and primary revenue source accounting for nearly 48% of our total revenue for the period.

現在我想分享我們每個業務部門的季度細節。首先，海外學校保持穩健成長勢頭，仍是我們最強勁的板塊。第三財季營收年增19.4%，延續了兩位數的年成長動能。該細分市場在過去連續五個季度都取得了成功。該業務是我們的成長引擎和主要收入來源，占我們期內總收入的近48%。

Furthermore, our overseas schools, student enrollments grew by 8% year over year this quarter. Year to date over 900 students have accepted offers from our September intake. Our students have demonstrated exceptional performance across different facets of school life, particularly showcasing impressive academic achievements. This year, three in every five of our CATS Global Schools students have received an offer from the prestigious Russell Group University, globally recognized for its commitment to world-class research and academic excellence.

此外，我們的海外學校本季的學生入學人數年增了8%。今年迄今為止，已有超過 900 名學生接受了 9 月入學的錄取通知。我們的學生在學校生活的各個方面都表現出了出色的表現，特別是展示了令人印象深刻的學術成就。今年，在我們的 CATS 全球學校中，五分之三的學生收到了著名的羅素集團大學的錄取通知書，該大學因其對世界一流研究和卓越學術的承諾而受到全球認可。

The Russell group compromised 24 member universities, including Oxford and Cambridge. Furthermore, 24 of our cats global school students received offers from renowned G5 Universities of Oxford, Cambridge, Imperial College London, the London School of Economics, and University College London. We remain steadfast in our commitment to facilitating our students' education educational, expect excellency and creating opportunities for their academic success as well as well-rounded development.

羅素集團損害了包括牛津大學和劍橋大學在內的 24 所成員大學。此外，我們貓國際學校的24名學生也收到了牛津、劍橋、倫敦帝國學院、倫敦政治經濟學院和倫敦大學學院等著名G5大學的錄取通知。我們堅定不移地致力於促進學生的教育，期望他們取得優異的成績，並為他們的學業成功和全面發展創造機會。

Overall, we are pleased with advancements we made with our overseas schools business in the third fiscal quarter. Our dedication to delivering a top-tier education to our students and you equipping them for success in the global market is driving this business growth and supporting accelerated year over year enrollment.

整體而言，我們對第三財季海外學校業務的進展感到滿意。我們致力於為學生提供一流的教育，並幫助他們在全球市場取得成功，這推動了我們的業務成長，並支持逐年加速入學。

Moving on to our complementary education services. Revenue from this segment decreased 18% year over year in the fiscal third quarter, we strategically reduced lower return and on the utilized programs in alignment with our internal expectations. We also divest our non-core career counseling business and international contests training business in June and May. Our divestment strategy is geared towards focusing our resources on our high-growth core overseas school business and streamlining our management efficiency.

繼續我們的補充教育服務。第三財季該部門的營收年減 18%，我們策略性地降低了較低的回報率，並根據我們的內部預期減少了已利用專案的回報。我們還在六月和五月剝離了非核心的職業諮詢業務和國際競賽培訓業務。我們的撤資策略旨在將資源集中在高成長的核心海外學校業務上，並提高管理效率。

By reallocating resources we aim to drive innovation and enhance service delivery in our overseas school business. As we move forward, we will continue to cultivate the international school market, aligning our efforts with our long-term vision and adapting to the dynamic environment. With our goal of leaner and more efficient operations in the third fiscal quarter, we continue to optimize our optimization of structure and enhance corporate governance.

透過重新分配資源，我們的目標是推動海外學校業務的創新並加強服務提供。未來，我們將繼續深耕國際學校市場，將我們的努力與我們的長期願景結合起來，適應不斷變化的環境。我們以第三財季營運更加精簡、有效率為目標，持續優化結構，提升公司治理。

We conduct a wide array of health checks to identify issues in our overseas schools business and again a deeper understanding of these overseas operations. We dispatched a management team from our headquarters to directly oversee the overseas business -- school business, establishing clear management responsibilities and reporting mechanisms.

我們進行廣泛的健康檢查，以發現海外學校業務中的問題，並再次更深入地了解這些海外業務。我們從總部派出管理團隊直接負責海外業務——學校業務，建立了明確的管理職責和報告機制。

In addition, we also implemented advanced IT systems to enhance collaboration between our different departments and internal control teams. The gradual integration of our headquarters and overseas management teams not only help us reduce management costs, but more importantly, allows this group -- allows the group strategy to be executed more efficiently at the local level.

此外，我們也實施了先進的IT系統，以加強不同部門和內部控制團隊之間的協作。我們總部和海外管理團隊的逐步整合，不僅幫助我們降低了管理成本，更重要的是，讓這個集團——讓集團的策略在當地更有效率地執行。

Under this model, the optimizations productivity has increased significantly. Our senior team can response to market dynamics with more agility, paving the way for sustainable growth and innovation. In summary, the third fiscal quarter has demonstrated that our business remains resilient and is steadily improving in the face of dynamic market. We are operating with increasing efficiency and will continue to report our operations along with our goals. Our priority remains on expanding our steady overseas school business, while seeking opportunities to divest noncore assets related to complementary education services and the domestic kindergarten and K12 operations.

在此模型下，優化效率顯著提高。我們的高階團隊可以更敏捷地應對市場動態，為永續成長和創新鋪路。總而言之，第三財季表明我們的業務保持彈性，並在充滿活力的市場中穩步改善。我們的營運效率不斷提高，並將繼續報告我們的營運狀況和目標。我們的首要任務仍然是擴大穩定的海外學校業務，同時尋求機會剝離與補充教育服務以及國內幼兒園和K12業務相關的非核心資產。

Moving forward, we will continue to advance our high growth, high return business, gearing up to seize extensive growth opportunities that will strengthen our market share (technical difficulty) leading global education service provider.

展望未來，我們將繼續推動我們的高成長、高回報業務，準備抓住廣泛的成長機會，從而增強我們作為全球領先教育服務提供者的市場份額（技術難度）。

With that, I will turn the call over to our CFO, Ms. Cindy Zhang, who will discuss our key financial results. Please go ahead, Cindy.

接下來，我將把電話轉給我們的財務長 Cindy 張女士，她將討論我們的主要財務表現。請繼續，辛迪。

Thank you. Now I would like to discuss our financial results for the third quarter of fiscal 2024. Please note, all amounts are in RMB unless otherwise stated. We are pleased to report healthy financial results in the third fiscal quarter. Our total revenues grew by 6.2% quarter over quarter, driven by gains in our overseas goods business. Ongoing optimization in our cost structure and improved operating efficiency drove our gross margin up by [317 basis points] year over year and 560 basis points quarter over quarter, and we achieved profitability for the third consecutive quarter on a non-GAAP basis.

謝謝。現在我想討論一下我們 2024 財年第三季的財務表現。請注意，除非另有說明，所有金額均以人民幣為單位。我們很高興在第三財季報告健康的財務表現。在海外商品業務成長的推動下，我們的總收入較上季成長 6.2%。成本結構的持續優化和營運效率的提高推動我們的毛利率同比增長[317個基點]，環比增長560個基點，並且我們在非公認會計準則基礎上連續第三個季度實現盈利。

Looking at our financial results for the third fiscal quarter in more detail. We achieved total revenue of RMB554 billion in the third physical quarter. By segment, the largest proportion of our business overseas schools recorded revenue of RMB264.9 million, contributing 47.8% of total revenue and growing by 19.4% year over year, and 6.7% quarter over quarter.

更詳細地了解我們第三財季的財務表現。第三季我們實現總收入人民幣 5,540 億元。以業務分部來看，佔比最大的海外學校業務收入為人民幣2.649億元，佔總營收的47.8%，年增19.4%，較上季成長6.7%。

Complementary Education Services and domestic kindergartens and K12 operation services revenues were RMB169.5 million and RMB119.6 million, respectively. Both decreased year over year as we continue to advance our portfolio and optimize cost through divestment of these noncore education businesses. Cost of revenues was RMB351.2 million or 63.4% of total revenue in the third fiscal quarter. This compares with 67.1% for the same quarter last fiscal year, making the third consecutive quarter of improved year-over-year cost as a percentage of total revenues. This improvement was mainly attributable to our cost-saving measures and efficiency enhancements at our headquarters.

補充教育服務以及國內幼兒園和K12營運服務收入分別為人民幣169.5百萬元和人民幣119.6百萬元。隨著我們繼續推進我們的投資組合併透過剝離這些非核心教育業務來優化成本，兩者均逐年下降。第三財季營收成本為人民幣3.512億元，佔總營收的63.4%。相較之下，上一財年同一季度的成本佔總收入的比例為 67.1%，連續第三個季度實現年比改善。這項改善主要歸功於我們總部的成本節約措施和效率提升。

Our gross profit increased by 5% year over year and 25.4% quarter over quarter for RMB202.7 million. The increase was mainly attributable to revenue growth in our overseas schools, with the segment's gross profit increasing 40.1% year over year. Gross margin increased to 36.6% from 32.9% for the same quarter last fiscal year and [31%] for the previous quarter as testament to our robust cost management system and enhanced utilization of facilities and teaching resources.

我們的毛利年增 5%，季增 25.4%，達到 2.027 億元。成長主要得益於海外學校收入成長，該板塊毛利年增40.1%。毛利率從上一財年同季的 32.9% 和上一季的 [31%] 增至 36.6%，證明了我們強大的成本管理體係以及設施和教學資源利用率的提高。

Notably, our overseas business gross margin reached 33%, the highest level we have seen in the past three years. Adjusted gross profit was RMB205.9 million, representing a 4.7% increase year over year and a 24.9% increase quarter over quarter. SG&A expenses were RMB147 million compared with RMB142 million for the same quarter last fiscal year. The slightly increase was mainly attributable to a rise in overseas personnel related expenses. Adjusted EBITDA was RMB76.6 million compared with RMB96 million for the same quarter last fiscal year in the previous quarter.

值得注意的是，我們的海外業務毛利率達到33%，為過去三年來的最高水準。調整後毛利為人民幣2.059億元，較去年同期成長4.7%，較上季成長24.9%。SG&A 費用為人民幣 1.47 億元，而上一財年同期為 1.42 億元。小幅成長主要是因為海外人員相關費用增加。調整後 EBITDA 為人民幣 7,660 萬元，而上一財年同期為 9,600 萬元。

Now turning to profitability, due to a RMB133 million impairment loss on goodwill, we recorded a net loss of RMB90.3 million in the third fiscal quarter. Excluding this one-time impact, net income was RMB42.7 million compared with a net loss of RMB37.7 million for the same quarter last fiscal year. Adjusted net income was RMB48.5 million compared with an adjusted net loss of RMB34.9 million for the same quarter last fiscal year.

現在轉向獲利，由於商譽減損損失人民幣1.33億元，我們在第三財季錄得淨虧損人民幣9,030萬元。剔除此一次性影響，淨利為人民幣4,270萬元，而上一財年同一季度淨虧損為人民幣3,770萬元。調整後淨利為人民幣 4,850 萬元，而上一財年同一季度調整後淨虧損為 3,490 萬元。

As for our balance sheet, our cash position rebounded this quarter. As of May 31, 2024, we had cash and cash equivalents and restricted cash of RMB537.2 million compared with RMB496.9 million as of February 29, 2024.

至於我們的資產負債表，我們的現金狀況本季有所反彈。截至2024年5月31日，我們的現金及現金等價物及限制性現金為人民幣5.372億元，截至2024年2月29日為人民幣4.969億元。

Moving forward, we will continue to prudently manage our costs and strategically reshape our portfolio to maximize returns while strengthening our financial position through margin improvement fortifying our balance sheet and increasing cash flow. Our strong cash position will continue to support us in mitigating the market dynamics. We are confident in maintaining a healthy balance sheet while achieving organic growth and creating sustainable value for our customers and shareholders in the long term.

展望未來，我們將繼續審慎管理我們的成本，並策略性地重塑我們的投資組合，以實現回報最大化，同時透過改善利潤率、強化我們的資產負債表和增加現金流來加強我們的財務狀況。我們強大的現金狀況將繼續支持我們緩解市場動態。我們有信心保持健康的資產負債表，同時實現有機成長，並為我們的客戶和股東長期創造可持續的價值。

Okay. This concludes all our repaired remarks today. We will now open the call to questions. Operator, please go ahead.

好的。我們今天所有修正的言論到此結束。我們現在開始提問。接線員，請繼續。

(Operator Instructions) Since there are no questions in the queue, I would like to turn call back over to Andrea Guo for closing remarks.

（操作員說明） 由於佇列中沒有問題，我想將電話轉回給 AndreaGuo 以進行結束語。

Thank you once again for joining us today. If you have any further questions, please feel free to contact Brighter Scholar's Investor Relations through the contact information provided on our website.

再次感謝您今天加入我們。如果您還有任何疑問，請隨時透過我們網站上提供的聯絡方式聯絡博實樂投資者關係部。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。