The stock price fell from $149 to now $29, the market value fell from $38 billion to $7.3 billion, evaporating more than $30 billion, equivalent to about more than 200 billion yuan! It should not be overstated to say that Heilongjiang has learned the darkest hour.
On June 6, 2019, with who landed on the New York Stock Exchange, the issue price of $10.5, Chen Xiangdong is the largest shareholder, holding more than 50% of the shares. Top K12 first stock halo, superimposed on the outbreak of the 2020 epidemic online education, with who learned although it had been shorting agencies several times, still stormed, the stock price had risen to more than $ 149.
Once soared more than 13 times, the market value touched up to $ 38 billion, leaving the old education company New Oriental behind. If we talk about performance, with who learns and New Oriental is still far from the same.
New Oriental’s total revenue for fiscal year 2020 (12 months ended May 31) was 25.5 billion yuan, up about 16 percent, and net income was 2.948 billion yuan, up about 74 percent. FollowWithLearn’s full-year 2020 revenue is just under $7.1 billion, less than 1/3 of New Oriental’s, and a loss of about $1.4 billion. Just in 2018-2019, with who learns with the profit of 20 million yuan and 227 million yuan respectively.
Using losses for the market, this method of play many startups are doing, not with who learns one. With who learns last year revenue growth rate of 237%, of which, K-12 online course net revenue of 6.237 billion yuan, an increase of 266%. The growth was accompanied by paying users. The number of paid course registrants for Followers was 5.87 million, up 168% year-over-year. Of these, 5.43 million people were enrolled in online K-12 paid courses, up 177% year-over-year.
In order to achieve these high growth rates, spending money is necessary. since 2019, the company has maintained triple-digit revenue growth for eight consecutive quarters at a very high cost. In the fourth quarter of last year, for example, Heilongjiang’s total revenue was 2.211 billion yuan, up 136% from 935 million yuan in the fourth quarter of 2019. Selling expenses were about $1.8 billion, R&D expenses were $275 million, and administrative expenses were about $218 million, for a cumulative total of $2.29 billion for the three expenses; up 301% from $571 million in the previous year.
In other words, the three expenses jumped three times, while revenue only increased 1.36 times. About 2.3 billion yuan of operating expenses were “exchanged” for 2.2 billion yuan of revenue. In fact, the total operating expenses in the fourth quarter of last year was 2.907 billion yuan. The efficiency of such a money-burning circle market also makes investors question.
For the whole year of 2020, the revenue of Who Learn is 7.1 billion yuan, but the total operating expenses are 8.88 billion yuan, and the operating profit is -1.755 billion yuan, compared with the operating profit of 216 million yuan in 2019, which is a high growth of revenue, but consumes a lot of cash. Whether students brought in through marketing can maintain a high repurchase rate in the future is an important factor in success or failure.
On the recent stock price plunge, Chen Xiangdong said in an internal letter issued on March 29, there are concerns about the possible upcoming government policy for primary and secondary school subject education, but also about the possible current Sino-US relationship concerns, the most important impact factor is a U.S. hedge fund using leverage burst, which led to its holdings with who learns stock was forced to close out by the investment bank, which in turn had a significant negative impact on the stock price of who learns with.
The author thinks that the era of losing money to earn money may be coming to an end, as whoever learns has not gotten back a dollar of income for a dollar of expenses. The online education is a big red sea, many companies in the capital to promote, through the burning money to grab the market, perhaps also to go to the inflection point.
On March 31, Chen Xiangdong personally announced a $50 million share buyback, which did not stop the decline. A combination of factors, with who learns as of the U.S. stock market close on Monday, the stock price suffered a rare and very embarrassing history of “12 consecutive negative”.
The stock price fell from $149 to $29, the market value fell from $38 billion to $7.3 billion, evaporating more than $30 billion, equivalent to more than 200 billion yuan! It would not be an overstatement to say that Heilongjiang has learned its darkest hour.
The good thing is that by the end of last year, with who learns cash and cash equivalents, short-term investments and long-term investments totaled 8.217 billion yuan, no short-term capital concerns, but the stock price fell further, “military” unstable outside, refinancing will also become difficult.
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