Readboy Education Holding Company (2385) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 31.1% YoY to RMB165.1m, led by personal student tablets; net loss widened to RMB45.2m from RMB37.9m.

• Digital and smart classroom deployments reached 80 schools and 156 classrooms, serving over 43,500 students and 5,567 teachers; repetitive practice fell 33% and learning efficiency rose at least 26%.

• Registered users exceeded 9.3m; average daily active users were 730,000 and average monthly active users exceeded 1.36m.

Financial highlights

• Revenue increased 31.1% to RMB165.1m; cost of sales rose 68.1% to RMB130.0m and gross profit fell 27.8% to RMB35.1m.

• Net loss widened to RMB45.2m from RMB37.9m; adjusted net loss excluding non-cash fair-value losses was RMB34.2m versus RMB17.7m.

• Selling and distribution expenses fell 24.8% to RMB27.7m; administrative expenses rose 41.4% to RMB22.3m and R&D expenses rose 4.0% to RMB26.5m.

• Other income and gains fell 42.8% to RMB18.6m, including a RMB10.3m YoY reduction in net foreign-exchange gains.

• Net cash used in operating activities was RMB22.6m versus RMB119.3m; cash and cash equivalents were RMB275.2m at 30 June 2024.

Outlook and guidance

• H2 plans include expanding digital and smart classroom solutions into more schools and regions, deepening local partnerships, and broadening online and offline distribution.

• Planned investment in AI and big data aims to improve product functionality and user experience; continued product and digital-resource development is planned.

• Personalized AI learning rooms are planned to connect in-school and out-of-school services, alongside broader education-data use and Douyin short-video OMO group-buying campaigns.

• A new accessory product is expected during the H2 peak season, with management expecting sales to increase following its launch.