Chalk Technology Updates Prospectus: Gross Profit Margin 47.5% in the First Half of 2022

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Title: Chalk Technology Updates Prospectus: 47.5% gross profit margin in the first half of 2022

On September 2, 2022, the vocational education platform Chalk Technology once again submitted an updated prospectus to the Hong Kong Stock Exchange to advance the listing process of the Hong Kong Stock Exchange.

According to the prospectus, Chalk Technology is a leading non-academic education and training service provider in China. It is committed to popularizing high-quality non-academic education and training services through technology and innovation. Its core revenue comes from online training, offline training, teaching materials and tutoring materials. Sales of three major sectors. Citi, CICC (Hong Kong), and Bank of America Securities are the joint sponsors, and well-known investment institutions such as Tencent, IDG, Jingwei, and Hillhouse are among the shareholders. The purpose of this fund-raising is to enrich the course content, expand the group of students, and strengthen the content and technology development capabilities.

According to the Frost & Sullivan Report, non-academic vocational education and training in China includes vocational examination training and vocational technical training. The market size of vocational examination training is expected to reach RMB 110.2 billion in terms of revenue in 2026. The penetration rate of vocational examination training services in China is expected to be It will increase from 25.6% in 2021 to 28.9% in 2026. Among them, in 2021, Chalk Technology will rank second in China’s vocational exam training industry with a market share of 4.3%.

Financial data shows that Chalk Technology will achieve total revenue of 1.16 billion yuan, 2.132 billion yuan, and 3.429 billion yuan in 2019, 2020, and 2021, respectively. From the perspective of net profit, the adjusted net profit of Chalk Technology in 2019 was 175 million yuan, and the net losses in 2020 and 2021 were 363 million yuan and 822 million yuan. As of June 30, 2022, the adjusted net profit was 95.6 million yuan. Yuan.

The following is the relevant data of Chalk Technology:

financial data:

Revenue: In 2019, 2020, 2021 and as of June 30, 2021 and 2022, the total revenue was 1.16 billion yuan, 2.132 billion yuan, 3.429 billion yuan, 1.885 billion yuan and 1.451 billion yuan respectively. The compound annual growth rate of operating income from 2019 to 2021 is 71.9%, and the revenue in 2021 will increase by 61% year-on-year.

Gross profit: In 2019, 2020, 2021 and the six months ended June 30, 2021 and 2022, the gross profit was RMB 536 million, RMB 489 million, RMB 840 million, RMB 323 million and RMB 689 million, respectively. Gross profit margins for the same period were 46.2%, 23.0%, 24.5%, 17.1% and 47.5%, respectively.

Net profit/net loss: The company recorded a net profit of RMB 154 million in 2019, and recorded a net loss of RMB 484 million and 2.04 billion in 2020 and 2021, for the six months ended June 30, 2021 and 2022 Net losses were recorded at approximately RMB 945 million and RMB 391 million, respectively. Recorded an adjusted net profit of 175 million yuan in 2019, and recorded adjusted net losses of 363 million yuan, 822 million yuan and 540 million yuan in 2020, 2021 and as of June 30, 2021, as of June 30, 2022. As of the end of the day, an adjusted net profit of 95.6 million yuan was recorded.

Revenue structure: mainly for online and offline training service fees, followed by sales of teaching materials and tutorial materials (third-party booksellers). Revenue from the top five customers (third-party booksellers) accounted for 1.1%, 1.2%, 1.6% and 2.8% of the company’s total revenue in 2019, 2020, 2021 and the six months ended June 30, 2022, respectively.

Operational data: The total number of payers increased from 6 million in 2019 to 9.6 million in 2020, further increased to 9.8 million in 2021, and 4.1 million as of June 30, 2022. The number of people paying for regular-priced courses increased from 1.4 million in 2019 to 1.8 million in 2020, and further increased to 2.6 million in 2021, and 1.2 million as of June 30, 2022.

Risk factors:

If the company cannot continue to attract students and increase their purchase and consumption of products, it may be adversely affected.

Loss of market share due to failure to develop and apply advanced technology to support and optimize online products and services.

Due to the fierce market competition, the number of students has decreased, which has led to a decrease in the company’s market share.

The company may continue to record net losses, net current liabilities, total losses and net cash used in operating activities in the future, resulting in liquidity risk.

The uncertain new crown epidemic may continue to have a negative impact on the company’s business and operations.

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