Before the landing of "double reduction"$Scholar Education Group (01769.HK)$Development has advanced by leaps and bounds all the way, constantly opening up and expanding territory in South China, and has been praised as "K12 South China Tiger" by the market.

But now the scenery of thinking music education has disappeared, the stock price has plummeted to the bottom, and now we can only rely on the quality education business to support the backbone.

Like many teaching and training enterprises, thinking music education is also actively looking for a way out, unwilling to "gnaw on the old foundation" in the field of education. Surprisingly, the second growth curve that we want to cultivate this time coincides with that of many teaching and training enterprises.

New Oriental Education & Technology Group's sidekick?

On December 13, the share price of Sixue Education, which has long fallen into an immortal stock, suddenly exploded, alarming the education sector of Hong Kong stocks.

On December 13th, the share price of Sianle Education was as excited as chicken blood, soaring all the way to close at HK $1.820, up 100.00%, staging an one-day doubling of the share price.

The catalyst that led to the rise of the share price of Sikole education has something to do with its cross-border transformation.

Since the outbreak of the epidemic, live streaming has been popular with many enterprises, and it has become a new track for enterprises to expand their business scale or transform themselves to cultivate new businesses.

A number of K12 training institutions have been in the field of cross-border e-commerce live broadcasting since the double reduction policy was launched, because of the increasingly fierce market competition in old industries such as quality education, adult education and intelligent hardware education, and institutions are unwilling to "hang themselves from the same tree". At the same time, the threshold of e-commerce live broadcast is not high, and those knowledgeable and logical teachers have the ability to compete with traditional live streaming.

Led by Yu Minhong$Koolearn Technology (01797.HK)$Earlier to enter the live broadcast with goods, its "Oriental selection" strong counterattack to become a dark horse in the field of live broadcast with goods, making many colleagues jealous. So$Gaotu Techedu (GOTU.US)$Gaotu Techedu Inc. 's "good things",$TAL Education (TAL.US)$The "excellent products of scientists" and$Doushen(Beijing) Education &Technology Inc. (300010.SZ)$Platforms such as the "bean god selection" were also online one after another, following New Oriental Education & Technology Group in an attempt to eat a piece of meat.

With the hindsight of thinking music education, the transition to the direction of live streaming appears to be long overdue, but it does not affect its popularity in the secondary market.

"Wen Xiansheng, the first talent of Sikao Music, will meet with you on December 12," the official Wechat account said on December 11. Thinking about Le Chairman and controlling shareholder Chen Qiyuan said: "In the days to come, we will look for high-quality local brands for the families of Sixue and every family we serve, so that we can eat happily, feel at ease and relax with the most favorable prices.」

Compared with the path of "Oriental selection" to take goods such as agricultural products, "Wen Xiansheng" is not in the real sense, but to recommend group-buying goods and services to netizens in the form of visiting stores, including eating, drinking, playing, and having fun. it involves local dishes, coffee shops, amusement parks, desserts, hotels, and so on. At present, there are 87 items recommended by Wen Xiansheng.

However, Wen Xiansheng got off to a lonely start, and the account actually launched its first live broadcast on November 19, but so far it has fewer than 4000 fans and its ability to circle fans has yet to be strengthened.

The earlier "Oriental selection", "Gaotu Techedu Inc. good thing" and "expert Yupin" which entered the Douyin platform currently have 2869.4W, 1.9W and 6.5W fans, respectively.

At present, there are more and more live rooms with the flavor of "literati", which means that educational institutions are also facing greater competitive challenges in selling life products and educational products on short video platforms.Thinking music education this time in the live broadcast with goods in the field of another way, the intention of differential play is also very obvious.It is worth noting that at a time when the control of the epidemic in many parts of the country has been greatly relaxed, the local life market is moving towards recovery, and the official announcement of "Wen Xiansheng" has obviously stepped on a good time for the market to pick up.

但Whether thinking music education can make use of the family connections accumulated over the years to strengthen and expand the "Wenxiansheng" account or more accounts with goods in the future is still open to question.Because not every educational institution can become a replica of "Oriental selection", and not all the people at the helm of every educational institution bring their own flow like Yu Minhong. To become a dark horse of Internet celebrities, not everyone can encounter accidental factors.

On the other hand, there are a large number of online celebrity accounts involved in local life services on social platforms, and the number of fans on many accounts is much higher than that of Wen Xiansheng. At present, the live broadcast and video display of "Wen Xiansheng" are not very new, and they are mainly based on the highlights of the product. Therefore, how to increase powder is a problem in front of Wen Xiansheng.

Quality education business holds up the banner

After the double reduction policy was introduced in July last year, thinking Music Education spun off the K12 business and closed some learning centers, so its vitality was greatly damaged.

In 2021, although revenue rose 11% year-on-year to 832 million yuan, it generated a net loss of 26.611 million yuan, the first loss since the company disclosed its financial data in 2017.

With a broken arm and losing weight, what you need to do to think about music education is to "keep fit".Last autumn, thinking Music Education launched non-disciplinary literacy courses, including subject literacy, music learning Sinology, logical thinking training, and so on.

After focusing on quality education, the business of quality education plays an important role in the development of thinking music education, and is growing rapidly. In 2021, the company's business income from non-academic quality courses increased sharply by 1912.7% to 196 million yuan compared with the same period last year; the number of enrolled students was 57207, an increase of 1338.1% over the same period last year; and the number of tutorial hours was 2.3143 million, an increase of 1825.1% over the same period last year.

In the first half of 2022, the company's revenue from literacy courses increased by 70.5 per cent year-on-year to 179 million yuan, and tutoring hours increased to 2.0688 million from 263000 in the same period last year.

However, due to the decrease in the total number of learning centers, the total number of students enrolled in tutoring courses and the number of tutoring hours, the company's revenue dropped 63% to 191 million yuan compared with the same period last year, with a net loss of 32.03 million yuan, and a net profit of 42.75 million yuan in the same period last year.

Despite the rapid development of quality education business, thinking music education can not make up for the awkward situation after the loss of K12 business. In the first half of this year, the company's revenue was less than 200 million yuan, while in the first half of 2020 and 2021, the company's revenue was 326 million yuan and 517 million yuan respectively.

In order to boost the transformation of the company, Chen Qiyuan increased his stake in the company three times in January this year, accumulating a total of 1 million shares.

In addition, on the same day that Wen Xiansheng met with netizens in the live room of the Douyin platform, Shinle Education issued an announcement saying: on December 12, 2022, through Tiansheng International Co., Ltd., the company's chairman, Chen Qiyuan, increased his holdings of a total of 3.1 million shares of the company at an average price of about HK $0.9871 per share in the open market with his own capital, for a total consideration of about HK $3.06 million. Immediately following the increase, Chen Qiyuan held a total of 218 million shares, equivalent to approximately 39.26% of the total issued share capital of the Company as at the date of this announcement.

The announcement also said that, as Chen Qiyuan told, its support for the company's sustainable development (especially the new live e-commerce business) does not rule out the possibility of further increasing its stake in the company at the right time in accordance with applicable laws and regulations.