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Sunlands Technology Group (NYSE:STG), an online adult education company, released its unaudited financial results for the second quarter of 2021 on Aug. 18. In the second quarter of 2021, Suntech recorded its first profit since listing, with a net profit of 22.08 million yuan, compared with a net loss of 126 million yuan in the second quarter of 2020.
In response, Liu Tongbo, CEO of Suntech, said: "We are satisfied with the results in the second quarter." In recent years, the company has continuously optimized its product structure through strategic adjustment, pursuing a balance between costs and benefits while seeking growth. Thanks to our continuous efforts, we have achieved a record net profit of RMB 22.08 million, which fully demonstrates the effectiveness of our strategy. "
Specifically, in recent years, Sunlands Technology Group's postgraduate training business has won more recognition and good brand reputation in the market, and vocational skills upgrading business such as vocational qualifications has ushered in favorable policies this year to promote better income growth. At the same time, through refined operation strategies and various cost control measures, Sunlands Technology Group has also achieved a reduction in sales expenses, management expenses and other costs.
Optimize the product structure to help students improve their competitiveness in the workplace
In recent years, with the continuous development of China's economy and society, the scale of highly educated talents is growing, the competitive pressure of workplace people is gradually increasing, and people's demand for vocational skills and academic qualifications is also increasing. Sunlands Technology Group saw this trend and carried out strategic layout earlier, constantly enriching the types of curriculum products and optimizing the structure of curriculum products to meet the diversified needs of students. According to the financial report, Suntech achieved a net income of 630 million yuan in the second quarter of 2021, an increase of 22.8% over the same period last year.
Liu Tongbo said: "the increasing competition in the job market and the increasing diversification of our courses have contributed to the continued growth of our vocational skills and postgraduate training courses. At the same time, Suntech institutions also actively respond to the call of the country's new career development, explore the mode of industry-education integration, develop vocational skills training courses such as new occupations, and help workers improve their employability. "
In recent years, the state has vigorously encouraged vocational education and life-long education and issued policies such as the Vocational Education Law of the people's Republic of China (revised draft). According to Frost Sullivan's forecast, China's vocational education market will maintain a growth rate of 6.7% from 2017 to 2022, and the industry will continue to expand, with a forecast of more than 1 trillion yuan in 2022, of which the market size of non-academic vocational education will exceed 400 billion.
"looking to the future, we will continue to actively develop a wider variety of high-quality courses to meet the needs of students and help them achieve professional success. Suntech has gained a firm foothold in the field of adult education, and we are confident that we will continue to lead the development of the market and consolidate our market share in postgraduate training and vocational skills courses, so as to lay the foundation for stronger performance in the future. " Liu Tongbo said.
Achieve sustainable growth and improve students' learning experience
At the same time of income growth, Sunlands Technology Group attaches great importance to cost control in order to achieve sustainable growth. This can be seen from this financial report: Sunlands Technology Group's administrative expenses and sales expenses were effectively controlled in the second quarter of 2021, down 8.0% and 7.9% respectively from the same period last year. As a result, Suntech recorded a gross profit of 532 million yuan, up 28.9 per cent from a year earlier, while gross profit margin rose nearly 4 percentage points year-on-year to 84.5 per cent.
"We are pleased to see steady growth in the second quarter." Lu Lu, chief financial officer and chief strategy officer of Suntech, said: "in the current quarter, we have taken a number of measures to reduce costs and improve operational efficiency within a reasonable range. While continuing our efforts to provide students with a better learning experience, we have also expanded the category of courses. "
Suntech institutions, which entered the adult education track as early as 2003, after 18 years of accumulation and efforts, have formed their own first-mover advantages in teaching and research, teacher system construction, Internet operation and so on. rely on strong curriculum research and development and the strength of the teaching team to develop diversified courses and provide online course experience anytime and anywhere for on-the-job students.
Because of this, the number of students in Suntech has been growing at a high speed. According to the financial report, Suntech added 86602 students in the second quarter of 2021, an increase of 4.8 per cent over the same period last year. It is worth noting that the satisfaction of students in this quarter is as high as 98.73%.
As a forerunner of online education, Sunlands Technology Group completed the online transformation as early as 2014, has been committed to AI technology research and development and investment for many years, and infiltrated AI technology into the whole learning chain of "teaching, training, testing and evaluation" to provide students with personalized learning programs, so as to improve students' learning efficiency and test pass rate.
Lu Lu said: "in the future, we will continue to adhere to a cost-effective promotion strategy and continue to optimize operational efficiency. We believe that with our first-mover advantage in adult vocational education, well-developed courses and efficient management measures, Sunlands Technology Group can achieve further growth and continue to improve profitability. "