Readboy Education Holding Company (2385) H2 2023 earnings summary

Executive summary

• FY23 was a challenging transition year: revenue declined 40.6% YoY to RMB359.4m and net loss was RMB72.5m, versus net profit of RMB4.9m in FY22.

• Gross margin improved to 25.7% from 22.2%, supported by higher-margin product launches and greater self-operated online sales mix; the annual loss persisted despite cost controls.

Financial highlights

• Revenue fell 40.6% to RMB359.4m; gross profit decreased 31.1% to RMB92.4m as lower sales were partly offset by margin expansion.

• Reported net loss was RMB72.5m, compared with net profit of RMB4.9m in FY22; loss before tax was RMB61.3m versus profit before tax of RMB10.7m.

• Adjusted net loss, excluding fair-value changes and FY22 listing expenses, was RMB53.4m; FY22 adjusted net profit was RMB6.3m.

• Other income and gains decreased 36.0% to RMB44.2m; selling and distribution expenses fell 16.2% to RMB80.8m and administrative expenses fell 27.8% to RMB39.3m.

• Basic and diluted EPS were both a loss of RMB20.88 cents; FY22 basic EPS was RMB1.66 cents and diluted EPS RMB0.49 cents.

Outlook and guidance

• 2024 priorities include advancing smart education device R&D, digital education resources and digital/smart classroom solutions, with a focus on stable business growth rather than quantified financial targets.

• Plans include deeper penetration in third- and fourth-tier cities and rural areas, extending offline distribution and strengthening online channels for broader coverage.

• Digital transformation, AI and big-data use, customer service, operating efficiency and collaboration with education authorities, schools and industry partners are key priorities.