The following is a summary of the First High-School Education Group Co., Ltd. (FHSEY) H1 2024 Earnings Call Transcript:
Financial Performance:
FHSEY reported a total revenue of $151 million in H1 2024, a decrease of 6.7% from $161.9 million in H1 2023.
Gross profit decreased by 17.3% to $52.3 million, resulting in a gross margin of 34.6%.
Operating income declined by 92.4% to RMB3 million, while net income from continuing operations decreased by 88.9% to RMB4.2 million.
Business Progress:
FHSEY saw an increase in student enrollment by 8.2%, reaching a total of 35,151 students.
The company is upgrading HR and IT capabilities to improve management functions and support the growing number of students and geographic diversity of school locations.
Opportunities:
FHSEY's revenue from customers increased, driven by higher student enrollment at existing schools.
Risks:
No revenue generated from government cooperative agreements, pointing to a risk in dependency on these for revenue generation.
Increased staffing and use of professional services significantly elevated the general and administrative expenses.
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