=Menu

China Online Education Group (NYSE: COE) announces unaudited financial results

China Online Education Group (COE) , a stock from Education & Training Services Industry, has a value of $11.45 per share, noted a price change of 0.70% in recent trade close.

Important factors to focus when evaluating a stock’s present and future value are the 52 week price high and low levels. Shares of China Online Education Group (COE) are trading -48.80% downward from the 52-week high mark and 5.62% above from the fifty two-week low mark.

China Online Education Group (NYSE: COE), a leading online education platform in China, with core expertise in English education, declared its unaudited financial results for the third quarter ended September 30, 2017.

Mr. Jack Jiajia Huang, Founder, Director and Chief Executive Officer of 51Talk, said that During the third quarter of 2017, the company decided to focus attention going forward on our K-12 one-on-one mass-market product offering, which has a better margin proposition and the company believe is better suited to reach the large market potential. Furthermore he added “Our premium American Academy one-on-one program, which has a lower margin profile, will be positioned as a complementary product in our K-12 offerings. We believe this focus on the mass-market product offering will provide us a clearer path to profitability for our one-on-one business.”

THIRD QUARTER 2017 Financial Results

Net Revenues

Net revenues for the third quarter of 2017 were RMB236.1 million (US$35.5 million), a 95.1% raise from RMB121.0 million for the same quarter last year. The raise was primarily attributed to an raise in the number of active students and, to a lesser extent, an raise in the average revenue per active student. The number of active students in the third quarter of 2017 was 176.6 thousand, a 74.5% raise from 101.2 thousand for the same quarter last year.

Cost of Revenues

Cost of revenues for the third quarter of 2017 was RMB90.2 million (US$13.6 million), a 118.0% raise from RMB41.4 million for the same quarter last year. The raise was primarily driven by an raise in total service fees paid to teachers, Because of the delivery of an raised number of paid lessons as well as the raised cost per lesson with the expansion of western teachers.

Gross Profit and Gross Margin

Gross profit for the third quarter of 2017 was RMB145.9 million (US$21.9 million), an 83.3% raise from RMB79.6 million for the same quarter last year.

Gross margin for the third quarter of 2017 was 61.8%, compared with 65.8% for the same quarter last year. The decrease was mainly attributable to the expansion of the American Academy program, which has a lower gross profit margin.

Operating Expenses

Total operating expenses for the third quarter of 2017 were RMB285.7 million (US$42.9 million), a 40.3% raise from RMB203.6 million for the same quarter last year. The raise was mainly the result of raises in sales and marketing, product development, and general and administrative expenses.

Sales and marketing expenses for the third quarter of 2017 were RMB167.1 million (US$25.1 million), a 38.5% raise from RMB120.7 million for the same quarter last year. The raise was mainly Because of higher expenses related to an raise in the number of sales and marketing personnel, as well as raised marketing and branding promotional expenses. Not Including share-based compensation expenses, non-GAAP sales and marketing expenses for the third quarter of 2017 were RMB165.8 million (US$24.9 million), a 38.8% raise from RMB119.5 million for the same quarter last year.

Loss from Operations

Loss from operations for the third quarter of 2017 was RMB139.8 million (US$21.0 million), compared with RMB124.0 million for the same quarter last year.

Non-GAAP loss from operations for the third quarter of 2017 was RMB131.4 million (US$19.8 million), compared with RMB113.8 million for the same quarter last year.

Net Loss

Net loss for the third quarter of 2017 was RMB141.8 million (US$21.3 million), compared with RMB123.5 million for the same quarter last year.

Non-GAAP net loss for the third quarter of 2017 was RMB133.5 million (US$20.1 million), compared with RMB113.3 millionfor the same quarter last year.

Basic and diluted net loss per American depositary share (“ADS”) attributable to ordinary shareholders for the third quarter of 2017 was RMB7.05 (US$1.05), compared with basic and diluted net loss per ADS attributable to ordinary shareholders of RMB6.17 for the same quarter last year. Each ADS represents 15 Class A ordinary shares.

Non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders for the third quarter of 2017 was RMB6.60 (US$1.05), compared with non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders of RMB5.66 for the same quarter last year.

Balance Sheet

As of September 30, 2017, the Company had total cash, cash equivalents, time deposits and short-term investments of RMB656.6 million (US$98.7 million), compared with RMB647.0 million as of December 31, 2016.

The Company had deferred revenues (current and non-current) of RMB1,089.1 million (US$163.7 million) as of September 30, 2017, compared with RMB687.1 million as of December 31, 2016.

Albert Frak has been writing on business investment topics and personal finance for more than 17 years. He holds a bachelor degree from University of Virginia and an MBA degree from Ohio State University. He started out as a way to establish himself as a serious writer in a relatively business field quickly. To this day, Albert still has literally hundreds of journals that he wrote in as a young man. Writing has always been a way for him to express himself and share business ideas. The biggest complaint Albert wife has that he spends too much time watching business news on television.

View all contributions by

0 comments… add one

Leave a Comment