Events:
Due to the need of business development and brand building, the company signed the Trademark assignment Agreement with GYM CONSULTING,LLC (hereinafter referred to as "GCLLC") through its holding subsidiaries MEGA, Tianjin Meijem Education and Technology Co., Ltd., to purchase the ownership of 21 Asian regional trademarks related to the Meijie brand at US $700000. After the completion of this transaction, the company has the ownership of 21 Asian regional trademarks related to the Megm brand through its holding subsidiary MEGA.
Comments:
1. Acquire the "MY GYM" trademark to consolidate the company's core products and brands. The object of this transaction is the ownership of 21 registered Asian trademarks of the Meijem brand, of which four trademarks belong to GCLLC and go through the registration formalities in China, while the remaining 17 trademarks belong to GCLLC, which entrusts Meijem to register in China. Prior to the acquisition of Tianjin Meijem by listed companies, Meijem and its holding company had 52 registered trademarks. The 21 trademarks acquired this time are mainly the ownership of "MY GYM" trademarks, including cartoon patterns, involving the company's core products and brands, and are important strategic resources of the company.
2. GCLLC is the founder of the Meiji brand, and Liu Junjun indirectly holds 9.56%. GCLLC was founded in October 2014 as a result of the overall transformation of Gym Consulting,Inc, the founder of the Megm brand. GCLLC's 2019 operating income was $6.65 million and net profit was-$1.76 million, with GYM CONSULTING HOLDINGS, Inc and MEGA Education Inc holding 70 per cent and 30 per cent respectively. Chairman Liu Junjun indirectly holds 9.56 per cent of GCLLC through holding MEGA Education Inc and does not have control.
3. Investment suggestion: the company strips off its manufacturing business and focuses on the main business of education. The acquisition of the Asian trademark of "MY GYM" will further consolidate the company's core products and brands. Affected by COVID-19 's epidemic situation, most early education institutions withdrew from the market under pressure, and the industry accelerated the reshuffle. The company's Q3 early education revenue recovered 90%. With the promotion of the vaccine, the local epidemic probability is expected to decrease, and the early education market will be repaired step by step. After the epidemic, relying on the front-line brand of early education + the platform of listed companies, the company is expected to obtain vacant properties and excellent teachers, while parents will be more cautious in choosing the brand of early education with pre-charging model, and the concentration of the industry is expected to accelerate to the head. Investors are advised to pay attention.
4. Risk factors: the impact of the epidemic on offline resumption of work; the intensification of competition in the early education industry; policy risk; the company's opening is not as expected.