Affected by the epidemic, online education companies in the capital market have been extremely lively since 2020. According to Tianyan Check data, as of October 2020, there are 82,000 new online education companies. The total amount of financing has reached 10.65 billion in the past year. The three online education companies good future, ape tutoring, and homework help. Dollar.
On January 22, Beijing time, , the big brother of the domestic online education industry, New Oriental Online announced the 2021 fiscal year interim results report. Judging from the core indicators of the financial report, although revenue has achieved a year-on-year growth of nearly 20%, the net loss has increased by more than 600% year-on-year. It is not difficult to see that in the online education sector, New Oriental Online still failed to find the optimal solution.
The U.S. stock-listed company that announced its earnings not long ago, Good Future, also recorded a loss of US$43 million in the fiscal quarter ending November 30, 2020, compared with a profit of US$20 million in the same period last year. As a fast-growing track, online education continues to be favored by capital, but from the perspective of the industry, the "burning money" war is still going on.
On one side is the constant influx of capital, and on the other side is the continuous money-burning circle. The development of online education so far is also in an embarrassing situation for players. How New Oriental Online expands its share in this highly potential market in the future is still a major focus of the market.
's net loss expanded by more than 600% year-on-year, and revenue growth still depends on high investment
From the latest financial report data, New Oriental Online 's total revenue reached 676.8 million yuan in the first half of fiscal 2021 An increase of 19.2%, the total number of paying students reached 2.14 million, a year-on-year increase of 62.5%. From these perspectives, it is indeed worthy of recognition.
In the first half of fiscal year 2021, New Oriental Online can achieve growth in these indicators, on the one hand, thanks to its "customer-centric" market strategy and implementation of differentiated courses; on the other hand, K-12 courses and 东方优博_ The accelerated expansion of span2span courses has also become a driving force for its long-term growth.
However, even so, from the perspective of investment and loss of New Oriental , it is not difficult to find that these upward growth indicators are still a means of spending money.
financial report shows that in the first half of fiscal 2021, New Oriental Online 's total revenue cost was 523.6 million yuan, a year-on-year increase of 109.0% from the 250.5 million yuan in the same period last year. New Oriental Online said that this is due to the increase in the cost of teaching staff and course researchers, especially in the K12 education division, the company has invested a lot of resources to improve the quality of courses and services.
At the same time, sales expenses also increased by 76.7% year-on-year to 515.3 million yuan. These high expenses directly led to the net loss of New Oriental Online from 71.282 million yuan in the same period last year to 674 million yuan, an increase of 670.6% year-on-year. With the increasing cost of customer acquisition, New Oriental Online will continue to face high cost growth in the future.
In addition, according to the financial report, New Oriental Online 's gross profit is not impressive. Looking back at the relevant financial reports, the gross profit volume has reported a downward trend for three and a half years.
In fact, since its listing on the Hong Kong Stock Exchange in March 2019, New Oriental Online 's losses have continued to expand.In the fiercely competitive market environment, the homogeneity of online education has become more and more serious, and this kind of continuous money burning will still become the main market strategy in the short term.
K12's business performance is quite eye-catching, and it is still not easy to compete with many "unicorns"
As can be seen from the financial report, New Oriental Online K-12 Education Division's total revenue year-on-year An increase of 162.9% to 336.9 million yuan. The number of paying students in this segment increased by 143.4% year-on-year to 1.838 million. Specifically:
· New Oriental Online The number of paying students in the K-12 large class increased by 134.4% year-on-year ; _P5p
· The number of paying students for Oriental Youbo courses increased by 170.3% year-on-year.
And K12 has also become an important strategic direction repeatedly mentioned by New Oriental Online . From previous financial reports, we can also find that New Oriental Online 's gross profit margin declines, and the total revenue cost growth also points to the K12 business.
Due to the expansion of the K12 branch, while donating free courses during the epidemic, the cost of teaching staff has also increased significantly. It directly affected the trend of New Oriental Online 's gross profit margin. From the above table, we can see that from FY2020 to FY2021, the gross profit margin of New Oriental Online has shown a rapid decline.
From the perspective of overall industry demand, according to the Guotai Junan team’s statistics on consumer service prices in the United States for the past 20 years, education products can significantly outperform inflation in the long run. At the same time, because K12 does not have strong regulatory restrictions, There is also the possibility of price increases in the industry.
And the current industry competition pattern is still very fragmented,The price of regular courses is not increased much, and some are reduced or even given away for free. Therefore, the industry itself is not growing rapidly, and the subsequent market share of each company is the driving force for the company's high growth. To a certain extent, New Oriental Online can take advantage of the resources of the parent company New Oriental Group. However, when facing other K12 giants to compete for the market, the market must be profitable. The surge in marketing expenses has shown that New Oriental Online selection.
In contrast, homework help and ape tutoring are two Internet education giants. At the end of 2020, " ape tutoring " first announced the settlement of 300 million US dollars in financing. Three days later, homework also announced the completion of 1.6 billion US dollars in financing. Looking back on the whole year of 2020, Yuanjiao’s financing has made great strides. The four rounds of financing totaled 3.5 billion US dollars, and the market value reached 170 US dollars. In one fell swoop, it became the education unicorn with the highest financing amount and the highest valuation this year. After two rounds of financing, JobBang was valued at US$9.6 billion, becoming the industry leader second only to Yuandao.
Online education platforms such as GSX and Good Future that raise funds in the secondary market are currently considered strong. In addition, Internet giants have always had an educational complex and have begun "strategic layout" outside the main battlefield.
As early as 15 years ago, Tencent set foot in the education field. On May 22, 2019, the "Tencent Education" brand was officially released, and Alibaba , which has a teacher plot, is not far behind. In 2013, Alibaba launched the education channel " Taobao classmates" to build a platform for live interaction. Seven years later, Taobao released the "100 Million Freshman Program" in a high-profile manner. It plans to help more than 1,000 education and training and knowledge payment institutions acquire more than 100,000 new students in the next three years.And claimed that "we are prepared to fight a big battle."
After entering 2021, another Internet giant ByteDance has also begun to enter the game strongly, digging into the online education market. The track is becoming more and more crowded, facing a large number of competitors, such as the primary market’s Yuandao’s 2020 revenue of 10 billion, and the good future of the secondary market’s total revenue in the third quarter is 1.119 billion US dollars. Their business is crowded out and In terms of market share, although New Oriental Online 's traffic has increased significantly, it has a single-digit revenue volume in the k12 business. If you want to compete with these unicorns, there may be a fierce contest.
Online education is vying for the flow, and the acceleration of the sinking will be the breakthrough of New Oriental Online ?
Those who win students win the world, and the number of students is the key operating data in the track.
In the field of online education, the ranking in the top camp has been basically determined, and the key to who can become the "overlord" lies in the sinking market that has yet to be developed. The sinking is often accompanied by surprises, which has been verified in areas such as consumption, e-commerce, and online car-hailing.
With the increase in the income of third- and fourth-tier urban residents and the increase in education expenditure, the penetration rate of online education in third- and fourth-tier cities continues to increase. According to Aurora Big Data, from 2018 to 2020, the proportion of users in cities below the third tier of the K12 online education industry has increased by 6.1%, while the proportion of users in second-tier cities has declined. Compared with first- and second-tier cities, the sinking market is undoubtedly A super blue ocean.
In the latest financial report, New Oriental Online has a total of 2.14 million paying students, a year-on-year increase of 62.5%. In the K12 education division, the number of paying students reached 1.838 million, a year-on-year increase of 143.4%. Specifically:
· The number of paying students in the K12 class increased by 134.4% year-on-year;
· The number of paying students for Oriental Youbo courses increased by 170.3% year-on-year .
And Dongfang Youbo is the core revenue driver of New Oriental Online ,It meets the needs of high-income people in low-tier cities for high-quality educational resources, and has become the main force for New Oriental to develop the sinking market.
The biggest advantage of Dongfang Youbo lies in the localization of teaching. It provides courses that are more in line with the local teaching progress and student level for students in different regions. The financial report shows that as of November 30, 2020, Oriental Youbo has entered 271 cities in China's 26 provinces, 99 of which are new cities. In these cities, Dongfang Youbo will establish offline service centers, which also reflects that Dongfang Youbo’s small classes are increasing its penetration into lower-tier cities in China.
It is undeniable that accelerating the sinking does help New Oriental Online to open up more markets. However, in the face of many strong opponents such as learning and thinking, ape tutoring, and homework assistance, during the epidemic, free lessons will be launched to seize the sinking The market's play, New Oriental Online's sinking story still has many difficulties.
In the future, for New Oriental Online , how to present high-quality educational products in front of parents, and continue to let them accept them, or questions they need to think about, are also questions that need to be considered on the entire track. At the same time, with the continuous expansion of Oriental Youbo’s offline service center, it also means that more financial and material resources need to be used to maintain operations. In the face of continuously expanding losses, whether investors will give more patience, I am afraid it is also New Oriental Online is an important factor that cannot be ignored.
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