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Mustard Duiwen A few days ago, Zhonggong Education (002607.SZ) released its 2022 semi-annual financial report. The total operating income of Zhonggong was 2.227 billion yuan, a year-on-year decrease of 54.15%; the net profit loss was 891 million yuan, compared with a net loss of 97.1625 million yuan in the same period last year, an increase of 816.95% year-on-year.

Key Financial Data

During the reporting period, the net operating cash flow of Zhonggong was 1.033 billion yuan, a year-on-year increase of 210%, and the basic earnings per share was -0.14 yuan.

In terms of cost, during the reporting period, the operating cost of Zhonggong Education was 1.61 billion yuan, a year-on-year decrease of 40.04%. Among them, sales expenses were 702 million yuan, compared with 976 million yuan in the same period last year, a year-on-year decrease of 28.10%; administrative expenses were 472 million yuan, compared with 608 million yuan in the same period last year, a year-on-year decrease of 22.34%; research and development expenses were 328 million yuan, compared with 543 million last year. Yuan fell sharply by 39.66%.

Regarding the reasons for the changes in performance, Zhonggong said that due to the impact of the epidemic, the reduction of face-to-face classes and the postponement of the provincial entrance examination led to a decrease in operating income compared with the same period last year. In addition, due to the impact of the epidemic in many provinces and cities, market promotion has been reduced, and at the same time, marketing personnel , management personnel, and R&D personnel have decreased, and labor expenditures have been reduced accordingly.

Business Overview

In terms of different industries, Zhonggong Education’s education and training revenue was 2.216 billion yuan, a year-on-year decrease of 54.09%; other revenue was 10.0531 million yuan, a year-on-year decrease of 63.4%.

In terms of products, the revenue of recruitment and training for civil servants was 718 million yuan, accounting for 32.24% of the total revenue, a year-on-year decrease of 68.99%; the recruitment and training revenue of public institutions was 435 million yuan, accounting for 19.55% of the total revenue, a year-on-year decrease of 29.64%. %; the revenue of teacher recruitment and teacher qualification training was 387 million yuan, accounting for 17.38% of the total revenue, a year-on-year decrease of 27.67%. The comprehensive training revenue was 677 million yuan, accounting for 30.38% of the total revenue, down 50.26% year-on-year; other revenue was 10.0531 million yuan, accounting for 0.45% of the total revenue, down 63.4% year-on-year.

As a multi-category vocational education institution, the recruitment and training of civil servants is still the focus of revenue, and it is also the product with the largest decline.

Zhonggong stated in its financial report that since 2022, the company’s external operating environment will face more severe challenges compared to 2021. Since the peak enrollment period, due to the nationwide epidemic prevention and control, the company’s directly-operated branches have suspended classes in stages. At the same time, the joint written examination for civil servants was postponed, and interviews for the national examination, teachers’ and public institution examinations were also postponed, and the company’s enrollment and teaching were greatly disrupted.

As of the close on August 30, 2022, Zhonggong Education (002607) closed at 4.57 yuan, up 2.24%, with a turnover of 153 million yuan.

Source: Mustard Pile

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