Hailiang Education Group Inc. (Nasdaq: HLG) 1Q2021 Investor Presentation November 2020 01 01 Company Overview
CONTENTS 0202 Financial Updates
0303 Bussiness Updates
0204 Investment Highlights
1 Company Overview
2 Company Overview
One of the Largest Primary & Secondary School Education Service Provider in China
. 25 years of educational experience, . 13 affiliated schools with 26,869 started from 1995 students(1) . 42 affiliated and managed schools . Founded by Hailiang Group, which is with 72,846 students(1) one of the Fortune 500 company of the . The school network has expanded to world 7 provinces in China
. 2,441 Teachers(1) • China's first private education group for primary, middle and high school . 39 Hailiang educational staff are listed in the United States graduated from Peking University and Tsinghua University(1)
(1) As of September 30, 2020 3 Company Overview – Development History
FY2012 FY2010 FY2016 High-quality, distinctive, FY2002 Acquired Tianma Zhuji Hailiang Education FY2016 FY1996 international Hailiang Experimental School Park was launched and Hailiang Education FY2017 The first school of Hailiang transformation and Experimental High commenced operation listed on NASDAQ Hailiang Group acquired Education Group School upgrading Hubei Xiantao No.1 Middle Hailiang Foreign Language was launched and School School was launched and started operating started operating
FY2018 FY2019 FY2020 FY2021
• Cooperated with Pate’s . Stated management of 4 managed schools: Xinchang . Established International . Managed 2 public schools in Grammar School in United Nanrui Experimental School, Jinhua Hailiang Foreign Headquarters in Singapore Suqian Kingdom Language School, Feicheng Hailiang Foreign Language . Managed 1 public school: . 3 affiliated schools opened: School and Xiantao No.1 Middle School Sihong Second Experimental Lanzhou Hailiang . Managed 5 public schools in Hangzhou: Chunhui School Experimental School, Hailiang Primary School, Xixing Middle School, Wenyan Middle Overseas Chinese School and School, Wenyan Primary School and Wenyan No. 2 . Zhejiang Ningbo Ninghai Wuhu Hailiang Experimental Primary School Public School is under School . Acquired Jiangsu Zhenjiang Jianghe High School of Art construction . Established a friendship school relationship with Morita . Acquired Jinhua Hailiang School from California of United States Foreign Language School . Cooperated with Hikvision to create a smart campus
4 Company Overview – School Network Deployed in 7 Provinces in China with 42 Affiliated Schools and Managed Schools Number of schools
42 36 37
24 29 27 28 16 8 13 8 8 9 9 Covered area FY2017 FY2018 FY2019 FY2020 1Q2021 Not covered area Number of Students Schools Total Number Affiliated Managed Schools under of Students Schools 72,846 Construction (1Q2021) 66,344 9 61,109 Zhejiang 10 (Hailiang Investment 2 33,354 54,684 sponsored 1 school) 45,977 Jiangsu 1 3 - 7,563 42,628 38,290 32,574 1 Shangdong - - (Hailiang Investment 684 20,950 sponsored 1 school)
Anhui 1 - - 409 26,869 20,950 22,110 22,819 23,716 Jiangxi - 15 - 22,375
1 FY2017 FY2018 FY2019 FY2020 1Q2021 Hubei - (Hailiang Investment - 7,893 sponsored 1 school) Affiliated Schools Managed Schools
Gansu 1 - - 568 5 Company Overview – Development Model
. Hailiang Education entered into a strategic cooperation agreement with its parent company Hailiang Group in November 2017; according to the agreement, Hailiang Group will
fully entrust Hailiang Education to operate and manage private/public primary and secondary schools that are built, merged and managed by Hailiang Group.
. Since fiscal year 2018, Hailiang Education has expanded and developed rapidly through the asset-light operation management model, partnering with Hailiang Group (based on
the 2017 Strategic agreement), local governments and other third parties. The diversification of the school-running mode is expected to control costs more effectively, create new
profit growth points, and facilitate the rapid market expansion and improve the influence of Hailiang education’s brand.
. Education training and online education business will follow the two-step strategic plan of "online first + online and offline combined model, deep cultivation and far-reaching
expansion", and expand overseas markets with a business model that targets both corporate and individual customers. With advanced technology, creating a business ecology
of "education + technology", inspire and empower the future of children studying in Hailiang Education.
Asset-Light Expansion Mode School Expansion in Recent Years(1)
Hailiang Third-party 42 Government 37 Group companies 36
24 29 Private schools Public Schools Land and buildings 27 28
16 8 . Managed School . Lease School 3 3 13 8 8 9 9 3 3 FY15 FY16 FY17 FY18 FY19 FY20 FY21
Affiliated Schools Managed Schools
(1) The data of fiscal year 2021 is as of September 30, 2020. 6 Company Overview – Shareholder/Company Structure
Brilliant One Fame Best Gain Success Group Jet Victory Public shareholding Development Limited International Limited Limited International Limited
Actual Control by Mr. Feng 87.28% 12.72%
Hailiang Education Group Inc. 100% Hailiang International Education (NASDAQ:HLG) Group Pte. Ltd.
100% 100% Hailiang Education International Hailiang Education (HK) Limited Studying Service Limited 100% Pate’s – Hailiang International College Company Limited Off-shore On-shore 100% Ningbo Hailiang Education Logistics Zhejiang Hailiang Education Management Co., Ltd Consulting and Service Co., Ltd.
Zhuji Nianxin Lake Hotel Co., Ltd. Zhejiang Beize Group Hailiang Feng Co., Ltd. Ningbo Hailiang Sports Development 99.9% 0.1% Co., Ltd.
Ningbo Haoliang Information Consulting Hailiang Education Management Co., Ltd Group Co., Ltd. Hangzhou Hailiang international Studying Service Co., Ltd VIE agreement Hangzhou Hailiang Study Trip Co., Ltd. Equity control 7 Company Overview – Management Company Senior Management
. Serves as the chairman and chief executive officer of Hailiang Education Group Inc. since 2020 . Serves as a director and principal general of Hailiang Inc. since 2017. . Rceived a doctorate degree in Energy and Resource Engineering from Peking University. . With the accumulation of 17 years of experience being the principal of Hangzhou No.2 High School with high reputation and rich . Served as the 38th chairman of the postgraduate student’s experience in education. association . PhD candidate from East China Normal University and adjunct Dr. Junwei Chen. Owns multiple patents and has published several academic papers in Mr. Cuiwei Ye professor of many prestigious universities. international journals
. Serves as the vice president of Hailiang . Serves as s the vice president of . Serves as the vice president of Hailiang Management since 2018 Hailiang Management since 2019 Management since 2019 . Worked in Hailiang Inc. since 1995 in . Awarded with several honorary titles, such . Joined Hailiang Group since 1998， various functions. Served as the principal as National Outstanding Private teacher, served as the principal of various schools of the Elementary School of Tianma Shaoxing City’s Famous Principle, First for many years, and has won the Experimental School, the principal of Prize of Zhejiang High School Geography honorary titles of "National First Prize of Hailiang Elementary School, vice principal Course since joining Hailiang Education. Mathematics Course", "Famous Principle of Hailiang Inc. and the president of . Received a bachelor degree in geography of Zhejiang Province" and other honorary Hailiang Preschool education group. Mr. Ping Huang Ms. Lei Peng education from Xinjiang Normal University Mr.. Zhougang titles . Received a bachelor’s degree from in 1992, and worked with Grain Zhu . Received a bachelor degree in music Central Broadcast and Television Corporation Futures Trading Department University in 2006 and won various honor in Zhuji from 1993 to 2000 education from Zhejiang Normal awards in the PRC education section University, and is currently pursuing a including Outstanding Teacher of master degree in mathematics at East Zhejiang’s Private Education China Jiao Tong University
. Serves as our vice president since 2020 . Serves as our chief financial officer since . Serves as our secretary since 2017 and is responsible for investor relations, 2017 . With extensive experience in corporate mergers and acquisitions, and capital . Received a Bachelor of Science degree in governance, information management, IT markets Accounting and Finance Emphasis (dual governance and SOX compliance degrees) from California State . Received his bachelor's degree in . Prior to joining Hailiang, served as the University,Long Beach and is a member of accounting and master's degree in chief technology officer of Suntech Power AICPA, a licensed Certified Public business administration from Tsinghua (a company listed on NYSE Exchange) University Accountant, in the State of California as Mr. Peng Fan Mr. Jianguo Yuwell as a Certified Internal Auditor with Mr. Litao Qiu and the vice president of Zhejiang Chint . Served in Aesthetic Medical、Cashbus、 Institute of Internal Auditors,with rich Solar Technology Co., Ltd. Dali Foods Group Company Limited and auditing experiences especially expert in Deutsche Bank as key positions prior to GAAS、GAAP and IFRS joining Hailiang . Served in PricewaterhouseCoopers LLP.and Warner Bros as senior auditor and senior internal auditor prior to joining Hailiang 8 Financial Updates
9 Financial Updates – Financial Overview
Excluding earnings per FY2019 FY2020 TTM 1Q2020 1Q2021 1QYoY share (in million of RMB )
Revenue 1,499.0 1,482.6 1,551.2 229.9 298.5 29.8% Cost of revenue -1,026.9 -983.2 -1,003.9 -233.3 -254.0 8.9% Gross profit 472.1 499.4 547.4 -3.5 44.5 NM Gross margin 31.5% 33.6% 35.3% -1.5% 14.9% NM Net profit 315.8 366.6 411.3 -19.4 25.3 NM
Net profit attributable to the 293.4 370.8 413.0 -15.3 26.9 NM Company’s shareholders
Earnings per share 0.71 0.90 1.0 -0.04 0.07 NM
Net profit margin attributable to 21.1% 24.7% 26.6% -6.7% 9.0% NM the Company’s shareholders
ROE （attributable to the 17.8% 18.3% 20.4% -0.8% 1.3% NM Company’s shareholders ）
10 Financial Updates – Steady Revenue Growth with Diversified Business Streams Revenue from primary, middle and high school Revenue from Training Services Educational Services （in million of RMB） （in million of RMB） 1Q2020 – 1Q2021 YoY 1Q2020 – 1Q2021 YoY 120.0% Basic：33.9% International：41.1% Total：36.1% International 1,378.0 1,308.2 Program 1,217.0 Basic Program 473.4 449.0 411.3 144.2
859.3 904.7 805.7 263.1 64.5 193.3 53.7 83.7 59.3 9.0 19.8 134.0 179.4 FY2019 FY2020 TTM 1Q2020 1Q2021 FY2019 FY2020 TTM 1Q2020 1Q2021
Revenue from Management Services Revenue from Study Trip Services （in million of RMB） （in million of RMB）* 1Q2020 – 1Q2021 YoY 164.4%
55.7 81.5 48.3 40.9 56.4 37.0 11.9 21.2 4.5 1.8 FY2019 FY2020 TTM 1Q2020 1Q2021 FY2019 FY2020 TTM 1Q2020 1Q2021
* The decline in study trip income in FY2020 and 1Q2021 is mainly due to the restriction on travels because of COVID-19 . 11 Financial Updates – The Reason of primary, middle and high school Educational Services Income Continues to Grow
Number of Student Enrolled in primary, middle and Average Tuition for primary, middle and high school high school Educational Services (Affiliated Schools) Educational Services (After annual adjustment) **
1QFY2020 – 1QFY2021 YoY 1Q2020 – 1QF2021 YoY Basic：11.6% International：7.6% Total：10.8% Basic：7.1%，International：16.5%，Total：9.7% 108,226 26,869 24,245 23,716 92,398 92,895 22,819 5,262 90,339
4,859 4,890 4,553
50,457 45,567 47,096 44,109 21,607 18,266 18,857 19,355
FY2019 FY2020 1Q2020* 1Q2021 FY2019 FY2020 1Q2020 1Q2021
Basic Educational Program International Program Average Tuition for Basic Educational Program Average Tuition for International Program
Fiscal Year FY2019 FY2020 1Q2020 1Q2021 Total Average Tuition 53,333 55,162 56,333 61,770 （Yuan/Year）
* 1Q2020 student enrollment is as of September 30, 2020. ** When calculating the annualized average tuition fee for the FY2021, the income deferred due to the epidemic in the previous fiscal year has been excluded, which amounts to approximately 36.35 million in RMB. 12 Financial Updates – the Administrative and Selling Expenses Remain Low in the Industry
Administrative/Selling Expenses as Percentage of Revenue
7.2%
5.2% 4.8% 5.0%
3.1% 2.6%
1.8% 1.7%
FY2019 FY2020 1Q2020 1Q2021
Selling expenses Administrative expenses
13 Financial Updates – Profitability is Increasing Year by Year, and the Debt Ratio Remains Healthy
Gross Profit（in million of RMB） Gross Profit Margin
YoY 5.7% NM
547.4 472.1 499.4
31.5% 33.7%
14.9% -1.5% -3.5 44.5
FY2019 FY2020 TTM 1Q2020 1Q2021 FY2019 FY2020 1Q2020 1Q2021
Net profit attributable to the Company’s Net profit margin attributable to the Company’s shareholders （in million of RMB） shareholders
YoY 26.4% NM
413.0 370.8 25.0% 293.4 19.6%
9.0% -6.7% -15.3 26.9 FY2019 FY2020 1Q2020 1Q2021 FY2019 FY2020 TTM 1Q2020 1Q2021
14 Financial Updates – Profitability is Increasing Year by Year, and the Debt Ratio Remains Healthy (Continued)
EBITDA （in million of RMB ） EBITDA Margin
YoY 18.9% 180.4%
687.0 633.6 42.7% 533.1 35.6% 27.8%
12.9% 83.0 29.6
FY2019 FY2020 TTM 1Q2020 1Q2021 FY2019 FY2020 1Q2020 1Q2021
ROE（attributable to the Company’s shareholders ） Debt Ratio(1)
46.6% 20.4%
32.5% 27.0% 18.3% 17.8%
FY2019 FY2020 1Q2021 FY2019 FY2020 1Q2021
(1) Changes in debt ratio is mainly affected by fluctuations in the tuition fees collected in advance. 15 Financial Updates – Adjusted Operating Cash Flow and Net Cash
Adjusted Operating Cash Flow（in Million of RMB ） (1) Net Cash（in Million of RMB ） (2)
554.5 2,375.9
503.6
1,649.4
1,419.6
35.0 -1.9
FY2019 FY2020 1Q2020 1Q2021 FY2019 FY2020 1Q2021
(1)Adjusted operating cash flow = Net cash generated from operating activities – Increase in contract liabilities. From 30 June 2020 to 30 September 2020, about RMB 100 million of contract liabilities have been collected. (2)Net cash = cash - liabilitiy with interest. Cash refers to deposits, restricted currency funds and cash. The decrease in net cash in FY2020 was due to the rent prepaid for Zhuji Education Park. 16 Business Updates
17 Business Updates – 4 New Affiliated Schools in the New School Year 4 New Affiliated Schools for the 2020-2021 School Year Overview
Lanzhou Hailiang Experimental School Wuhu Hailiang Experimental School
Hailiang Overseas Chinese School Jinhua Hailiang Foreign Language School Number of Fiscal Year Capacity Area Section Educational Program Students(1) Opened/Acquired
Lanzhou Hailiang Basic educational 2,200 568 FY2021 77,256 Primary and middle school Experimental School program
Hailiang Overseas Chinese Basic educational 1,705 828 FY2021 18,648 Primaryand middle school School program
Wuhu Hailiang Experimental Basic educational 1,680 409 FY2021 231,624 Middle school and high School School program
Jinhua Hailiang Foreign Basic educational 900 739 FY2021 53,280 Primary and middle school Language School(2) program (1) As of September 30, 2020. 18 (2) The school started the first school year in 2018. Business Update – New School Year Enrollment Affiliated Schools’ Student Enrollment of New School 1Q2021 Student Breakdown in Affiliated Schools Year Compared to the End of the Previous School Year
5,262
26,869
21,607 23,716
FY2020 1Q2021
Basic educational program International program Overview of the Utilization Rate of Affiliated Schools Balance of Tuition Received in Advance (number of students/school size) (RMB million)
85.3%
94.8% 4,646 1,314
1,221.4 26,869 23,716 1,064.5
FY2020 1QFY2021 1Q2020 1Q2021 Enrollment Remaining Capacity 19 Affiliated Schools (1) FY2020 is as of June 30, 2020; 1Q2021 is as of September 30, 2020 Business Update – Hailiang Mingyou
Mingyou Centers Location Enrollment of Hailiang Mingyou(1)
Zhoushan 32,855 28,424
Hangzhou 10,415 (1) Shaoxing Ningbo (2/2 to be built) 22,440 24,418
Jinhua 1Q2021 YTD FY2021 Taizh Quzhou Offline Online ou Revenue from Hailiang Mingyou (in million of RMB) Lishui
Wenzhou (1 to be built)
19.8 . There are now 3 campuses . It is expected to land on 5 more centers in fiscal year 2021 (including 9.0 2 centers outside Zhejiang Province) . It is expected that Mingyou onsite centers will be opened in places where Hailiang Education School is available in the future 1Q2020 1Q2021 Revenue (1) YTD FY2021 data is from fiscal year 2021 until November 15, 2020 (cumulative) 20 Business Updates – Revitalizing Education through Technology
Hailiang Star Classroom(1)
• Completed the deployment of the Star Classroom platform construction • Started Star Classroom landing operation project Star Classroom • Star Classroom officially launched in Hailiang Experimental High School, Tianma Experimental The future approach of Efficient and convenient School and Hailiang Foreign Language School, lesson preparation and and provided daily operation tracking and problem teaching system running schools is not support handling empirical but standardized Hailiang Cloud Exercise(1)
• Completed platform recognition algorithm and optimization of test paper function • Completed the entry of multiple teaching supplementary books and high school knowledge Cloud Exercise trees construction Electronic distribution,• Nearly 100 teachers contributed their wisdom, correction and analysis summarized nearly 2000 knowledge points and platform for teaching more than 6000 test method changes materials
Student Growth File(1)
• Complete the development and launch of data visualization functions • Complete model construction and development testing of student portraits • Achieve 100% coverage of the primary and junior high school sections of Hailiang Foreign Language School
(1) As of the released date of 1Q21 Earnings 21 Business Updates – Invigorating Education with Talents
Campus Recruiting(1) Full Life Cycle Talent Training(2)
• At present, the school recruitment team has visited 16 • Changchun Normal University • Jilin Normal University universities, such as Peking University, Tsinghua University, Renmin University of China, Zhejiang University, etc. • At present, the school recruitment team has received 1,883 resumes, 46 of which are doctoral students, 1,100 from master students, and 737 from undergraduates • 561 candidates interviewed • Approximately 240 intention offers have been issued, of which 62 intentional freshmen are from Peking University and Tsinghua University • Anhui Normal University • Shanxi Normal University Progress • On August 25, 2020, Hailiang Education signed a contract with Changchun Normal University to establish Hailiang College • On October 14, 2020, Hailiang Education signed a contract with Anhui Normal University to jointly build Hailiang Innovation Class • On November 11, 2020, Hailiang Education signed a contract with Jilin Normal University to jointly build Hailiang Innovation Class • On November 17, 2020, Hailiang Education signed a contract with Shanxi Normal University to jointly build Hailiang Class
(1) As of November 15, 2020 22 (2) As of the released date of 1Q21 Earnings Business Update – 25th Anniversary Celebration & Education Promotion Plan
25th Anniversary Celebration Education Promotion Plan
• The 25th Anniversary • In the new era when China is building a Celebration of Hailiang moderately prosperous society in an all- Education was held on round way, basic education in many September 12, 2020 Beijing counties in the central and western underdeveloped regions still has a problem time at the Hailiang Education of lagging development. Park • Hailiang Education will rely on the strong • Dr. Junwei Chen, Chairman and strength of Hailiang Group, the advantages CEO of Hailiang Education, of Hailiang‘s education system, and the gave a 25th anniversary theme strong scientific and technological strength report at the celebration of Hailiang Education Research Institute to • Hailiang Education’s Two implement the "Education Revitalization Public Welfare Action". Through the Strategic Projects were officially establishment of Hailiang schools, the announced: the strategic project overall education level of an area is for the promotion of education improved, so that high-quality educational by talents and the strategic resources can cover more areas and project for the promotion of benefit more teachers and students. education through science and • As of November 2020, Hailiang Education technology, as well as the Three has visited 10 provinces in China. Major Actions in the new era: the promotion of public welfare actions for education in underdeveloped areas, the construction of outstanding education highlands, " Belt and Road Initiative " education construction action.
(1) As of the released date of 1Q21 Earnings 23 Investment Highlights
24 Investment Highlights – Distinguished
High School Entrance 2019-2020 School Year Examination • The top 10 high school entrance examinations are all Hailiang students in Zhuji City Basic Educational Program 2019-2020 School Year • Students from Hailiang Education taken the 2nd to 4th places in the university College Entrance entrance examination in Zhuji City Examination • 2 students from the second year of high school were admitted by the "Innovation Pilot Class" of the University of Science and Technology of China in advance • 113 students were admitted to the “Dual First Class” Universities • 3 students from art education received the highest score in Zhejiang Province Business Competition 5 students won the International Gold Medal of the ASDAN Simulation Business Competition
Over 20 students won the Provincial First Prize of the National Competition(1) Subject Competition Mathematics/Physics/Biology/Chemistry League
• Won the National Championship of the National U15 Sports Competition Basketball Final • Won the National Second Prize of the “Luohe Cup” National Youth U-series 7-a-side Rugby Championship A-level 2019-2020 School Year 100% of A-level graduates were admitted to the top 100 universities in the world
2019-2020 School Year International Program VCE 75% of the VCE students were admitted to the top 100 universities in the world
HSK 2019-2020 School Year 100% of HSK students were admitted by excellent domestic and foreign universities
(1) As of the released date of 1Q21 Earnings 25 Investment highlights – Specialized
Specialized School Positioning Objectives Specialized Programs Competitiveness
Technology Middle School High-level development of subject Everyone has talents to becomes a Competition Course Subject competition with bonus points (Such as Hailiang Senior High competition talent One main body with two wings and School) three channels
Humanities Middle School Liberal Arts Humanistic temperament with gentle Liberal Arts Class (additional reading, Comprehensive development, broad (Such as Hailiang Experimental Building up humanistic highland qualities etiquette, prestigious research courses) vision School) Physical and mental literacy, Tend to enter a university in the competition development humanities
Art Middle School High-level development of art Every teacher and student have Music, art and media Professional art education (Such as Hailiang High School of education personal sentiments, talents and Art admission channels Artl) dreams
Physical Education Middle Physical education as a school- Promote healthy body and mind, Basketball, tennis, fencing, shooting, Professional physical education School based curriculum to enter the discover personal potential, and make rugbyand swimming, etc. Sports college entrance channels (Plan to open in the future) school compulsory course the best use of talents
International School Bilingual & international education Chinese literacy, understand world A-level, VCE, SAT&AP, IB PYP&DP Diversified education system adapts to (Such as Hailiang Foreign dual system rules, and have a vision for the future the different needs of students Language School)
Overseas Chinese/Foreign Serving the education needs of Outstanding thinking, diverse Overseas Chinese Class (Additional Multiple growth channels Children School children of overseas Chinese and personalities, Chinese Course) Exclusive channel for overseas (Such as Hailiang Overseas foreign children Comprehensive quality, second HSK class Chinese/foreigners Chinese School) foreign language
Specialized Services
Minor . Hotel-style student apartments, hospitals, Chinese and Subject Study Trip Physical language Competition Camp Training Western restaurants Cources Specialized . International standard swimming pool, shooting hall Programs . Meals are provided by Mingkanghui, the supplier of the G20 summit, and scientifically prepared by professional Students nutritionists Exchange Innovation After-Class Art Program Program Program Training . Safely transport students through special high-speed trains and 100 school buses 26 Investment highlights – Internationalized
• Hailiang Education established a wholly-owned subsidiary in Singapore on April 29, 2020, Hailiang International Education Group Pte. Ltd., as the international education headquarters. Hailiang International Education will take Singapore as its foothold, steadily promote diversified businesses, and gradually form a collaborative business model for the International Education Headquarters and China Education Headquarters to achieve the goal of deploying the global education market strategically.
• Hailiang Education had students from 23 countries by June 30 2020 , including the United States, Canada, the United Kingdom, Japan and South Korea in addition to mainland China, Hong Kong and Macau. Besides, foreign teachers in the teaching staff come from 22 countries.
• Hailiang Education International Student Institute was established in January 2020, which is expect to establish cooperative relations with more countries along the Belt and Road, recruit international students to study in China, enter Chinese universities, and learn Chinese culture in the future.
• Hailiang Foreign Language School officially became the American ACT internal authorized examination center in March 2020 and officially became the American AP accredited school and is included in the list of American AP course of high schools.
• In May 2020, led by the People's Government of Wencheng County, Zhejiang Province, Hailiang Education and Italian overseas Chinese enterprises jointly created the "Hailiang Overseas Chinese School", which landed in Wenzhou Wencheng in September of the same year.
Hailiang Education has established extensive cooperative relations with more than 200 international education institutions and colleges globally, and strives to provide students with more opportunities to enter well-known universities in China and abroad for further studies.
27 Investment Highlights – Intelligent Smart Campus Smart Class
Internet of Things, Cloud and Big Data
iClass Star Classroom Cloud Exercise Home-School Tuition Logistics iPad teaching Efficient and Electronic distribution, Communication Management Management enhances classroom convenient lesson correction and analysis . Parents Service Platfor . Student Management . Logistics Analysis interaction preparation and platform for teaching System . Student Transportation System teaching system materials System . Course Registration System . Asset Management System Star Teacher Training . Live Broadcast of . Online Registration System . Logistics Order Classroom . …… Prestigious teachers team Grabbing develops courseware and . …… . …… …… …… teaching standards, leading young teachers to grow rapidly
Improve management efficiency Improve the teaching quality of new teachers Reduce energy costs Improve students’ learning efficiency Enhance campus safety Reduce teachers' repetitive work and protect intellectual property rights
Build up Excellent School Cultivate Distinguished Teachers Make Outstanding Students
. Hailiang Education has 25 years of . Evaluate the professional level of teachers accurately based on big . Assess the strengths and weaknesses of students experience in running schools, can refine data, teacher professional portraits and talent competency model ; accurately through precise measurement and various management standards . Big data, teacher professional portraits and talent competency evaluation; . Combine with intelligent management tools models to accurately evaluate the professional level of teachers; . Based on comprehensive growth data and career to reduce the difficulty of operating school . Relying on the "Star Teacher Training" curriculum and tracking planning, provide precise teaching and quality and increase cost efficiency system, accelerate new teachers maturity and become famous courses to allow students enter more ideal schools teachers; and improve their skills more comprehensively;
Education Student School Informatization Subject and Logistics Hailiang Education Enrollment School Collection Concept Growth Construction Intelligence Curriculum Management ……
28 Investment Highlights – Elite
Hailiang Education(1) Abundant Teaching Staff Rapid Expansion with High Quality 12 12 14 167 Full Life Cycle Talent Training Olympiad Advanced Senior Distinguished Senior Teachers Teachers Teachers competition training coaches 561 39 Staff graduates from Staff graduates from Peking University Dual first-class Professional Studying and Tsinghua University Universities students Assessment Tracking for Senior 1 for Senior 2 High School (2) Educational Staff Team Application Counseeling for Senior 3 Stable Faculty FY2018 FY2019 FY2020 Teacher Retention Rate 91.5% 93.3% 88.8%
75 296 Career Full-time Foreign Teachers Teachers with Master Degree or Development above Full Life Cycle Talent Training University Future Plan New “Xin,Da,Y Teacher a”Teacher Training Training Sophomors Camp Freshman Hailiang Education By FY2025 , expect to have 120 senior teachers/distinguished Culture Theory teachers/gold coaches, 250 students from Tsinghua and Cadre Army Famous Junior Senior Peking University, 150 Ph.D. students, and 1,000 students from Teacher Special Internship global prestigious schools. The undergraduate rate will up to Development Cultivation 100%, mainly for masters and doctors. Employment
(1) The data is for Hailiang Education employees as of September 30, 2020 (excluding managed schools) (2) The data is the team of teachers in affiliated schools as of September 30, 2020 29 Investment Highlights – Diversified
Business Diversification Income Diversification
(in Million of RMB) 3% Educational Services 4% 4% 10% 28% 30% 31% 27% Basic Educational International Program Program( including Art program)
. Government-mandated . UK A-level 65% courses . US AP 54% 58% 58% . Elective courses . Australia VCE . Art courses . IB PYP . Competition training project . …… . …… FY2018 FY2019 FY2020 TTM FY2021 Accommodation Transportation After School Service Other Incomes 6.2 15.4 16.0 16.0
Study Trip 13.8 81.5 56.4 37.0 Dining Teaching materials Educational 36.4 144.2 53.7 64.5 Training
Management 19.0 40.9 48.3 55.7 Service Supplementary Educational Services International 329.8 411.3 449.0 473.4 Program Basic Program 764.2 805.7 859.3 904.7 Educational Training Online Education All income segments of Hailiang Education maintain a high growth rate steadly, and income diversification is gradually consolidated. primary, middle and high school education services are accounted for the highest Overseas Study Consulting Study Trip proportion of income, benefited from the gradual increase in the number of students and average income, the overall financial situation was robust 30 and solid. Development Strategy
Attract and retain outstanding students, school management, and teachers to deliver quality education and high academic performance, as a result, strengthening our market presence as a leading primary, middle and high school educational service provider in China;
Expedite the expansion of our affiliated and managed school network with asset-light model through strategic partnerships with various parties, including but not limited to, Hailiang Group, local governments and third-parties, to establish a virtual platform to fuel our revenue growth;
Further explore international expansion strategies, including increasing enrolment of our international program, recruiting international students, and build/invest/acquire private schools in Belt and Road countries and developed countries with strategic synergies;
Diversify business model, and increase the proportion of ancillary education services, especially committed to establish Hailiang Mingyou‘s high-end K-12 educational training brand, and expand through standardized and localized products and teaching methods, as well as strategies for collaborative development with our schools, to realize the expansion of online education’ training users and onsite education training centers, and;
Continue to invest in the application and development of education technology to improve our education quality, maximize academic performance, optimize management efficiency, support our school network expansion, and diversify our education service offerings.
31 Appendix
32 Appendix1.1 – Company’s Schools Number of Fiscal Year Affiliated School School Location School Capacity(2) Students(1) FY2021 Opened/Acquired Hailiang Foreign Language Zhuji city of Zhejiang Province (3) School(3) 3,252 3,374 FY1996 Hailiang Experimental High Zhuji city of Zhejiang Province School(3) 4,425 4,450 FY2002 Tianma Experimental School(3) Zhuji city of Zhejiang Province 4,496 4,599 FY2010 Hailiang Primary School Zhuji city of Zhejiang Province 2,838 2,856(3) FY2017 Hailiang Junior Middle School Zhuji city of Zhejiang Province 3,318 3,350(3) FY2017 Hailiang Senior Middle School Zhuji city of Zhejiang Province 1,526 1,642(3) FY2017 Hailiang High School of Art Zhuji city of Zhejiang Province 1,677 1,700 FY2018 Hailiang Foreign Language High Zhuji city of Zhejiang Province 2,010 2,139(3) FY2019 Zhenjiang Jianghe High School Zhenjiang city of Jiangsu of Art Province 783 920 FY2019 Lanzhou Hailiang Experimental Lanzhou city of Gansu Province School 568 2,200 FY2021 Hailiang Overseas Chinese Wenzhou city of Zhejiang School Province 828 1,705 FY2021 Wuhu Hailiang Experimental Wuhu city of Anhui Province School 409 1,680 FY2021 Jinhua Hailiang Foreign Jinhua city of Zhejiang Province Language School 739 900 FY2021
Ninghai Public School Ningbo city of Zhejiang Province - 4,500 FY2022(under construction) Hangzhou city of Zhejiang Xianghu Public School Province - 1,152 FY2022(under construction) Total 26,869 37,167
(1) As of 2020.9.30. (2) School physical capacity. 33 (3) The capacity of schools in the Education Park may be adjusted according to actual business conditions. Appendix1.2 – Company’s Schools Number of Students(1) School Managed schools School Location Fiscal Year Started FY2021 Capacity(2)
Xiantao No.1 Middle School(3) Xiantao city of Hubei Province 7,893 8,000 FY2018
Xinchang Nanrui Experimental Shaoxing city of Zhejiang School(3) Province 2,758 2,900 FY2018 Feicheng Hailiang Foreign Feicheng city of Shandong Language School(3) Province 684 800 FY2019 15 Baishu Schools Jiangxi Province 22,375 29,341 FY2018 Hangzhou Chunhui Primary Hangzhou city of Zhejiang School Province 780 1,600 FY2019 Xiaoshan District Wenyan Hangzhou city of Zhejiang Primary School Province 2,598 3,000 FY2019 Xiaoshan District Wenyan No.2 Hangzhou city of Zhejiang Primary School Province 334 400 FY2019 Xiaoshan District Wenyan Hangzhou city of Zhejiang Middle School Province 900 1,920 FY2019 Hailiang Kindergarten Zhuji city of Zhejiang Province 293 400 FY2019 Zhuji Hailiang Jinshan Zhuji city of Zhejiang Province Kindergarten 234 249 FY2019 Tianma Kindergarten Zhuji city of Zhejiang Province 348 350 FY2019 Sihong Second Experimental Suqian city of Jiangsu Province School 5,000 5,500 FY2020 Xiamen Road School Suqian city of Jiangsu Province 1,165 4,600 FY2021
Fumin Avenue School Suqian city of Jiangsu Province 615 3,200 FY2021
(1) As of September 30, 2020. (2) School physical capacity. (3) Schools sponsored by our affiliate Hailiang Education Investment Group Co., Ltd. 34 Appendix2 – Income Statement Fiscal year ended on June 30 For The Quarter Ended on September 30 (In thousands of RMB, except for EPS) 2019 2020 2019 2020 Revenue 1,499,025 1,482,599 229,881 298,527 Cost of revenue (1,026,903) (983,175) (233,337) (253,998) Gross profit/(loss) 472,122 499,424 (3,456) 44,529 Other income, net 25,100 72,776 15,235 18,235 Selling expenses (25,003) (26,899) (5,990) (9,375) Administrative expenses (72,661) (77,536) (16,555) (14,764) Operating profit/(loss) 399,558 467,765 (10,766) 38,625 Finance income 24,935 25,120 8,086 7,597 Finance costs — (4,363) (3,693) (289) Profit/(loss) before tax 424,493 488,522 (6,373) 45,933 Income tax expenses (108,713) (121,924) (13,007) (20,643) Net profit/(loss) for the period 315,780 366,598 (19,380) 25,290 Net Profit/(loss) attributable to ：
Net profit/(loss) attributable to the Company’s shareholders 293,421 370,832 (15,303) 26,894
Net profit/(loss) attributable to non-controlling interests 22,359 (4,234) (4,077) (1,604)
Basic and diluted earnings/(loss) per share 0.71 0.90 (0.04) 0.07
Other comprehensive income/(loss), net of nil income tax 3,310 2,326 2,360 (2,813) Total comprehensive income/(loss) 319,090 368,924 (17,020) 22,477
Total comprehensive income/(loss) attributable to: Total comprehensive income/(loss) attributable to the 296,731 373,158 (12,943) 24,081 Company’s shareholders Total comprehensive income/(loss) attributable to non- 22,359 (4,234) (4,077) (1,604) controlling interests 35 Appendix3 – Balance Sheet As of June 30 As of September 30 (In thousands of RMB) 2019 2020 2020 Property and equipment, net 620,623 652,726 667,200 Intangible assets and goodwill, net 99,525 97,806 97,420 Right-of-use assets — 517,609 515,077 Contract costs 9,899 10,924 19,109 Prepayments to third party suppliers 94 75 207 Deferred tax assets — 568 2,562 Non-current assets 730,141 1,279,708 1,301,575 Other receivables due from related parties 91,674 76,646 70,173 Other current assets 31,706 37,259 56,197 Term deposits held at a related party finance entity 1,387,094 921,601 1,698,834 Restricted bank deposits 1,613 324 324 Cash and cash equivalents 260,684 515,297 676,744 Current assets 1,772,771 1,551,127 2,502,272 Total assets 2,502,912 2,830,835 3,803,847 Share capital 268 268 268 Share premium 134,583 134,583 134,583 Contributed capital 251,034 252,034 218,034 Reserves 360,914 396,053 393,240 Retained earnings 905,009 1,247,762 1,274,656 Total Hailiang Education Group Inc. shareholders' equity 1,651,808 2,030,700 2,020,781 Non-controlling interests 37,439 10,797 9,193 Total equity 1,689,247 2,041,497 2,029,974 Contract liabilities 2,579 3,159 2,988 Deferred tax liabilities 4,691 4,607 5,045 Lease liabilities — 18,749 22,717 Non-current liabilities 7,270 26,515 30,750 Trade and other payables due to third parties 218,122 270,207 285,411 Other payables due to related parties 134,745 148,363 129,713 Contract liabilities 398,951 293,643 1,286,695 Income tax payable 54,577 48,857 38,473 Lease liabilities — 1,753 2,831 Current liabilities 806,395 762,823 1,743,123 Total liabilities 813,665 789,338 1,773,873 Total liabilities and equity 2,502,912 2,830,835 3,803,847
36 Disclaimer
This presentation has been prepared by Hailiang Education Group Inc. (Nasdaq: HLG) (“Hailiang Education” or the “Company”) solely to facilitate the understanding of the Company’s business model and growth strategy. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisers or representatives will be liable (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation.
This presentation contains forward-looking statements and management may make additional forward-looking statements in response to your questions. Such written and oral disclosures are made pursuant to the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to its future performance, consolidated results of operations and financial condition. These statements can be identified by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from expectations implied by these forward-looking statements as a result of various factors and assumptions. Although we believe our expectations expressed in such forward looking statements are reasonable, we cannot assure you that they will be realized, and therefore we refer you to a more detailed discussion of the risks and uncertainties contained in the Company’s annual report on Form 20-F as well as other documents filed with the Securities & Exchange Commission. In addition, these forward looking statements are made as of the current date, and the Company does not undertake to update forward-looking statements to reflect future events or circumstances, unless otherwise required by law.
37 Contact
Hailiang Education Group Inc. Ascent Investor Relations LLC
Marcus Zihao Su Tina Xiao Email: [email protected] Email: [email protected] Tel: +86 571 5812-1974 Tel: +1-917-609-0333 Address: 1508 Binsheng RD, Binjiang Address: 733 3rd Avenue 16th Floor, District, Hangzhou City, Zhejiang, China New York, NY 10017, USA
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