Eagle education main business income growth slows down, facing debt repayment risk

category:Finance
 Eagle education main business income growth slows down, facing debt repayment risk


Art class income growth slows down

According to the data disclosed in the companys prospectus, in 2019, Eagle education realized an income of 287 million yuan, a year-on-year increase of 22.95%, and the attributable net profit was 78.2 million yuan, with a year-on-year increase of 30.72%. The growth rate of revenue and net profit of the company in 2019 is lower than that in 2018. By the end of the third quarter of 2020, Eagle education has achieved an income of 144 million yuan, with a net profit of 13.15 million yuan. The company said that due to the impact of the new crown epidemic, the company could not normally carry out training business in the first half of 2020, and its operating income and net profit decreased significantly compared with the same period in 2019.

In terms of business, the revenue of Eagle education mainly comes from art classes and culture classes. During the reporting period, the vast majority of the companys revenue came from art classes. During the reporting period, the average revenue of art classes accounted for more than 95%, while that of culture classes accounted for less than 5%.

Art class includes long-term class and short-term class. The long-term class is mainly aimed at the art examination training for the current or previous art students, while the short-term class is mainly for the trainees who receive short-term interest training in winter and summer vacation, weekends or other short-term time. In 2019, the income of art class is 267 million yuan, with a year-on-year growth of 19.29%, which is lower than the growth rate of 31.59% in 2018.

As the major fine arts colleges and art majors are selected according to the candidates scores of art major courses and college entrance examination culture courses, in order to improve the students scores of cultural courses, the company has specially opened cultural courses for art candidates. In 2019, the income of culture class of Eagle education is 14.88 million yuan, with a year-on-year increase of 125.17%, which is also lower than the growth rate of 168.44% in 2018.

Facing the risk of solvency decline

As for the increase of gross profit rate of long-term fine arts classes, the company explained that according to the market situation of art and arts examination, the company took into account such factors as price rise, teachers salary level and amortization cost, etc., and greatly increased the charging standard of long-term class. As a result, the income of long-term class increased rapidly, and the increase of income per unit class hour was greater than that of cost of unit class hour The company explained that the increase of short-term gross profit rate of fine arts was mainly due to the expansion of enrollment scale and the decrease of labor cost per unit class hour, which basically offset the impact of the increase in depreciation and amortization costs. The above is the operation of the company. In the prospectus, the company also revealed the risk of a decline in solvency. At the end of each reporting period, the companys current ratio was 0.77 times, 0.48 times, 0.18 times and 0.19 times, the quick ratio was 0.77 times, 0.48 times, 0.17 times and 0.19 times respectively, and the asset liability ratio (Consolidation) of the company was 43.72%, 47.73%, 52.69% and 58.64%, respectively. During the reporting period, the companys current ratio and quick ratio are relatively low, and there is a certain liquidity risk. If the companys operating performance does not meet the expectation or even decline in the future, resulting in the decrease of operating cash inflow, it may have an adverse impact on the companys solvency. Source: editor in charge of economic report in the 21st century: Zhong Qiming_ NF5619

As for the increase of gross profit rate of long-term fine arts classes, the company explained that according to the market situation of art and arts examination, the company took into account such factors as price rise, teachers salary level and amortization cost, etc., and greatly increased the charging standard of long-term class. As a result, the income of long-term class increased rapidly, and the increase of income per unit class hour was greater than that of cost of unit class hour The company explained that the increase of short-term gross profit rate of fine arts was mainly due to the expansion of enrollment scale and the decrease of labor cost per unit class hour, which basically offset the impact of the increase in depreciation and amortization costs.

At the end of each reporting period, the companys current ratio was 0.77 times, 0.48 times, 0.18 times and 0.19 times, the quick ratio was 0.77 times, 0.48 times, 0.17 times and 0.19 times respectively, and the asset liability ratio (Consolidation) of the company was 43.72%, 47.73%, 52.69% and 58.64%, respectively. During the reporting period, the companys current ratio and quick ratio are relatively low, and there is a certain liquidity risk. If the companys operating performance does not meet the expectation or even decline in the future, resulting in the decrease of operating cash inflow, it may have an adverse impact on the companys solvency.