Xueda Education (SZ:000526) recently released its 2023 annual performance forecast, and the net profit attributable to shareholders of listed companies is expected to be 13—1.6.5 billion yuan, an increase of 1093 over the same period last year88%—1415.30%。
This will be the highest net profit attributable to Xueda Education in recent years, exceeding the level before the "double reduction", thanks to the "continuous and active optimization of business layout" stated in Xueda Education's announcement on January 26.
At present, Xueda's education business involves personalized education, vocational education, cultural reading, medical, education and health integration, etc. Traditional personalized education is the main revenue and profit**, and other new businesses have moved from start-up to scale-up.
Since 2023, the business environment of the compliant K12 education and training business (including non-academic training and high school training, etc.) has improved significantly, the market demand has increased, and the leading companies have grown rapidly.
The full-time training business for college entrance examination repeaters, art candidates and other groups is the earliest transformation direction of Xueda's education layout after the double reduction, and it is expected to become the second growth curve after a certain development cycle.
In the face of uncertainties in the economic situation and market environment, Xueda Education is one of the few companies in the industry that continues to explore new businesses. Since the fourth quarter of 2023, Xueda Education has disclosed the progress of the integration of medical education and health care, which is a subdivision that leading education companies rarely set foot in.
Unit: 100 million yuan Data**: Announcement of listed companies).
The concept of personalization runs through the transformation.
In the past, the label of Xueda education was more one-on-one personalized tutoring. At present, Xueda Education's business is more diversified, we have our own schools, including vocational schools, basic education schools, industrial colleges, industry-education integration bases, in addition to cultural formats, medical formats. Jin Xin, founder and CEO of Xueda Education Group, said at the GET conference held in October 2023.
For more than 20 years, one-on-one personalized tutoring has experienced a rapid progress from a return to rationality. Xueda Education is a representative of one-to-one personalized tutoring, but later the offline small class classes represented by Xueersi occupied more market share in teaching and training. In 2016, Xueda Education was delisted from the U.S. stock market and returned to A-shares, with an annual revenue of only 25600 million yuan. In fiscal year 2017, Good Future's revenue exceeded $1 billion.
A person in the education and training industry told the 21st Century Business Herald, "If the entire K12 market is covered, one-to-one economy and scale are not as good as small classes, but at this specific stage of further education, one-to-one has strong demand and high profit margins." ”
So far, the compliance of high school training business has become increasingly clear, and it has become the basic business of many leading education companies. New Oriental's performance report for the second quarter of fiscal year 2024 released on January 24 shows that 8Of the $69.6 billion in revenue, new education businesses and other retained traditional businesses accounted for about 44% of the total.
Xueda Education's personalized education business focuses on high school training, and as of the end of the third quarter of 2023, there are nearly 240 personalized learning centers across the country. In addition, it provides full-time learning services for college entrance examination repeaters and art candidates, and has nearly 30 full-time bases across the country.
Since 2021, a large number of education and training institutions have withdrawn from the market, and the competitors of the institutions that have persisted have greatly decreased. The above-mentioned people in the education and training industry said.
Of course, there are also passive factors in the diversification of Xueda Education's personalized education business. In 2021, Xueda Education was used.
In three or four months, the more than 600 learning centers and more than 15,000 employees nationwide before the "double reduction" were reduced to more than 200 learning centers and more than 4,000 people. After the shrinkage of the number of teachers, it is inevitable to explore other models with more scale effects in addition to the one-to-one model.
The transformation of leading education companies has a common feature, that is, starting from traditional advantages. For example, Xueersi has launched non-disciplinary training courses such as humanistic creation, logical thinking, and scientific experiments, and has reused a large number of traditional teaching, research, and teacher resources for traditional Chinese, mathematics, science and other subject training. Xueda Education has expanded from one-to-one personalized tutoring to college entrance examination repetition, art examination training, and even the college entrance examination (including vocational education college entrance examination) business of secondary vocational education, all of which are based on traditional training business capabilities.
This kind of personalized education, or the concept of personalized development, guides us through the current transformation of several major directions. Jin Xin said in an interview with ** in December 2023.
On the macro side, the high school training business ushered in a dividend period. Tian Zuyin, director of the Department of Basic Education of the Ministry of Education, pointed out in January 2024 that China's basic education school-age population will see obvious peaks and valleys in the next 10 years. In the long run, high schools will face a shortage of places.
At the same time, in recent years, the number of students enrolled in higher vocational (junior college) colleges has exceeded that of undergraduates, indicating that the competition for undergraduates, especially in prestigious schools, is still fierce, and the training demand around the college entrance examination will increase.
The development cycle of vocational education.
Vocational education, cultural reading, and the integration of medical education, health and wellness are new businesses launched by Xueda Education in the past two years, and to carry out new businesses in the period when the economy is still recovering, it is necessary to take into account the long-term nature of the business and the short-term return speed, so as to avoid excessive cash consumption and endangering the company's fundamentals.
A striking example is that many leading education listed companies have cash reserves equal to their annual revenue on their accounts.
On the one hand, this reflects the company's awareness of risk prevention, and on the other hand, it also reflects the company's cautious investment. The founder of an education company once told the 21st Century Business Herald that he was happy to enter the live streaming business on the tuyere, "but the plan is to spend 300 million yuan to close the company before it improves." At that time, the company had 10 times as much cash on its books.
It is very rare for Xueda Education to invest in new businesses and make a lot of profits at the same time. This strategy reflects the business philosophy and style of the founders and management team. On New Year's Day 2022, the first Juxiang Bookstore in Shenzhen opened, which is the time when cash is the most valuable, and Xueda Education needs to invest 10 million yuan in store decoration. "At that time, some partners in the team said that they still want to do it? I said yes, even if you die, it is not because of these 10 million people. Jin Xin said.
In the vocational education sector, Xueda has 4 secondary vocational schools across the country through acquisition and trusteeship. According to the announcement, the purchase price of a single school is only tens of millions of yuan.
In addition, it also adopts a more asset-light cooperative school-running model to cooperate with a number of secondary vocational schools and technical schools, and Xueda Education relies on the existing majors or newly applied majors of vocational schools to set up general college entrance examinations or vocational and general education courses for fresh junior high school graduates.
According to official information, the enrollment scale of these classes is generally around several hundred, mainly in first- and second-tier cities. In recent years, under the influence of the strong willingness to go on to higher education and the diversion of general occupations, the motivation of secondary vocational students to participate in the college entrance examination has increased significantly, and various localities are also increasing the proportion of secondary vocational students in the form of vocational education college entrance examinations.
However, the path to higher education similar to that of ordinary high school students is not the only or even the main path for secondary vocational students, and it is the trend of the development of secondary and higher vocational schools in the future to focus on technical skills for further study.
This requires that when Xueda Education lays out the field of vocational education, it needs to strengthen its ability in technical skills education in addition to its own training genes.
The country needs a large number of high-quality technical and skilled personnel, which are the top innovators in the field of vocational education, who are very sensitive to technical practice and willing to delve into it. Jin Xin said.
In recent years, the policy of deepening the integration of industry and education has been favorable. The 2024 National Education Work Conference pointed out that it is necessary to enhance the adaptability and attractiveness of vocational education, and promote the construction of municipal industry-education consortiums and industry-education integration communities to make breakthroughs as soon as possible.
In May 2023, Xueda Education and Unisplendour Group jointly opened the major of microelectronics technology and device manufacturing, which is related to integrated circuits and has a high threshold, and landed in the Datongcai Secondary Vocational and Technical School acquired by Xueda Education.
We also cooperate with higher vocational colleges and undergraduate colleges to build majors and training rooms, build a new generation of information technology industry colleges, and cooperate with local ** vocational education parks and industry-education integration bases, and also sign a lot of contracts in 2023. Jin Xin said.
The integration of industry and education is a broad market, between vocational colleges and industrial companies, a third-party platform that understands both education and industry and market is needed.
In this regard, Xueda Education is a latecomer, and the integration of industry and education products has not yet been standardized, and the market needs to be developed.
Jin Xin publicly stated in 2022 that vocational education will not grow explosively like K12 education. Whether it is further education or employment, it takes a certain cycle, and it is probably not until the second or third year of the second year that obvious economies of scale can be seen.
According to this rhythm, Xueda Education's secondary vocational education business may contribute large-scale revenue, and there is synergy with personalized education sectors such as full-time business, which is conducive to enhancing the second growth curve of Xueda Education.
Cross-border business progress.
The integration of cultural reading and medical education and health care is a more cross-border transformation.
Xueda Education has opened nearly 10 bookstores across the country, and many bookstores are in preparation.
A Juxiang bookstore in Beijing, courtesy of the interviewee).
The private brick-and-mortar bookstore industry is struggling to make a profit, not only is it difficult for book sales to survive alone, but in recent years, whether cultural creativity and coffee can save bookstores has also been tested. Jin Xin also admitted not long ago, "The business model of Juxiang Bookstore is still running." ”
Education companies have the advantage of business synergy when they enter the book industry. For example, New Oriental has opened Dayu Bookstore in many places across the country, thus opening up the book industry chain of publishing, distribution and sales, and closely integrating it with the college student examination and study abroad business.
Xueda Education opened a bookstore not only to sell books, but also to explore culture and reading services.
Jin Xin once told the 21st Century Business Herald that on the one hand, the opening of the bookstore is to respond to the requirements of national reading and personalized lifelong development, and on the other hand, after the bookstore gathers the best precipitation, there is the possibility of exploring the business model.
Juxiang Bookstore is worth paying attention to its membership system and parent-child reading scene, which has the potential to improve the user structure of Xueda Education.
The integration of medical education and health care business provides assessment, diagnosis and treatment and first-class services for adolescents with autism, attention deficit, learning difficulties and other young people.
In August 2023, Xueda Education opened its first self-operated ** hospital in Xuchang, Henan Province, and has cooperated with dozens of hospitals and ** institutions.
An industry insider told the 21st Century Business Herald that this is a cross-border field, screening and diagnosis are carried out in hospitals, and intervention is scattered in various subjects such as medical care and educational institutions.
Even in first-tier cities like Beijing, which are mainly small and medium-sized institutions, there is a shortage of teachers who have obtained the BCBA (International Society for Applied Behavior Analysis Certified Behavior Analyst) certification, which is recognized as an authority in the industry, and many practitioners are special education or early education graduates, with insufficient work experience and high mobility. He said.
The entry of large-scale capital into this industry may be conducive to the exchange of achievements and experiences in different fields of medical care and education, and is also conducive to meeting the needs of target groups in non-first- and second-tier cities. The industry insider said.
The transformation of Xueda Education is a microcosm of the education industry, that is, from the core advantages to the extension of related fields, Xueda Education's strategy is to extend the "personalized" approach from general education to vocational education, special education, and reading, and run out of the second growth curve.