Big Education CEO Jinxin: Student numbers start to grow dramatically

On the afternoon of August 26, the chief executive, Jinxin, said this afternoon that the number of students in the second half of the company began to rise sharply, resulting in revenue that could be reflected in the fourth quarter and the first quarter of next year.

School of Education (Nyse:xue) announced the financial results for the second quarter of 2014 this morning. The report showed that the second-quarter net revenue of education was 121 million U.S. dollars, an increase of 5.4% per cent, and a net profit of 15.3 million dollars, down 11% per cent. Stocks tumbled nearly 16% per cent after Tuesday, as the company's outlook for the third quarter and full-year forecasts was weak.

In May this year, education had expected net revenue for fiscal year 2014 to be at least 394 million dollars, at least 13.5% per cent in fiscal year 2013. But in the results released today, the annual performance of education is expected to fall to $347.5 million trillion, flat from the same period last year.

The company's full-year revenue is expected to fall because the number of students in the first two quarters grew more slowly, the chief executive, Jinxin, said this afternoon. The company's statistics show that starting in the third quarter, the number of students began to grow significantly, but due to the start and management problems, the embodiment of revenue may be in the quarter and next year to reflect the first quarter.

Jinxin revealed that in July this year, the enrollment of the major education increased by 20%, while the retention rate of students is also increasing, various operating indicators are beginning to good.

In the second quarter, the net profit drop in education was partly a result of the huge cost of the new tablet sales effort. The results showed that in the second quarter, in order to promote its online education products e learning, the sale of tablets to students and potential customers produced a cost of 11.9 million of dollars.

Jinxin said the company will continue to promote the tablet computer, but compared with the second quarter of this year, the future of the company's subsidies will be normalized, will not produce such high costs.

At present, the major education focuses on the youth education market, and mainly provides one-on-one teaching services. Jinxin revealed that the company will consider the future acquisition, expand the company's business, and will focus on the education of the existing student structure with complementary online or offline companies. (Loliang)