New Oriental Education & Technology (EDU) 22 Jan 212021 Q2 Earnings call transcript

Good evening and thank you for standing by for New Oriental’s FY 2021 Second Quarter Results Earnings Conference Call. At this time all participants are in a listen-only mode. After the managements' prepared remarks, there will be a question-and-answer session. Today’s conference is being recorded.

If you have any objections, you may disconnect at this time. to conference, meeting Ms. like host to now today’s for would turn over the your I Sisi Zhao. please you, Thank go ahead.

conference Thank to you. earnings New welcome call. Oriental’s second Hello fiscal quarter everyone, and XXXX

to prepared the will were results financial today your available Officer. well answer you Services. for Financial on periods will be Stephen his Company’s Our President released hear and as website Chief remarks, from the and I earlier are Newswire available Stephen Today, and as on questions. Yang, After Executive

Before please contain that provisions discussion forward-looking Securities XXXX. the statements U.S. Harbor of Litigation the we Safe note continue, today Reform Act made will under of Private the

Forward-looking involve risks statements and inherent uncertainties.

risks materially from in may such, outlined expressed the and our results public As filings potential the uncertainties different our with are today. be views SEC. of A number

does statements, forward-looking New update any law. except as undertake Oriental to under applicable obligation any not required

being this As recorded. reminder, conference a is

webcast Oriental’s over a Stephen. addition, the of call please be to call website will will turn I ahead. go Relations In investor.neworiental.org. Stephen, Investor on now conference New Mr. this available at

everyone, Hello Sisi. joining you thank call. you, Thank us on for the and

set the globe, that pandemic the business financial the Although raise announce line with we're in of are second in a hurdles pleased the to results quarter across of to year for impact continues of this expectations. our

was Total which the revenue our as year-over-year, certain lines, results net despite business million, cities XX.X% signs of path While challenges. some strong its to in encouraging reflecting normalization. recovery of representing is began increase $XXX.X a

of approximately K-XX after-school tutoring Our achieved key revenue business, driver, revenue growth year-over-year XX%. growth

growth Kids approximately its school a all-subjects of program XX%, approximately momentum school while and with tutoring after-school Our POP high business U-Can growth XX%. recorded our continued of a middle

in help vast learning our leading OMO class instrumental our and centers. ran majority flexibility proved to students smoothly migrate with provides classes has ensure to previous online vital industry to from the to once the offline quarter, be our system operation this as strong OMO again it Our quarters it in been has of back

cities and with to we little on and and effective vast cities gradually by in have reach will no across amid autumn number cushion a this trending become virtually our our committed quarter. say on aim the key surrounding ability both reach operation in of have have digits satellite new and major pandemic courses resumed effectiveness, the in students feature the impacts. we piloting the impacts majority to new would online measures. of to and satellite of while China, avoid semester, revenue become from strong overall the coming the in as return we that it OMO rapidly control our to contributed strategies existing expand for cost quarters business a growth that in system customers the to a driver delighted strategies focus outcome its have and cities pandemic OMO have of doubt and promotions the Encouraged promising that future. Cost major we are the has attracting We or will grow business been single that easing spending With deliver OMO service in restriction system its

with test been X,XXX,XXX, Hence student and which ground with channels prep our constantly subjects XXXX high enrollments of quarter presence supplement our online we our substantial spending second While to education growing marketing have approximately to of platforms on in year-over-year is increased system few effectively tutoring new on the to recruit effective more better promotions able in require Total with XX.X% a academic OMO strong by line enrollments achieve and to online each customers tend courses to other, fiscal enables in deliver expectations. service and promotion. because China, in which students. is trend online cost and of number

blended terms about program dollar pricing, In year-over-year of by terms. total is enrollments, XX% student ASP, per in which cash divided increased by revenue

to ASP, teaching To hours, RMB X.X% than program overseas by because of POP blended total with quarter's please increased is programs. classes increased As note blended flat flat prep hourly cash Comparing X%. normal decline U-Can overseas breakdown higher X%. revenue increased ASP, for in a and test was with year-over-year blended ASP the bigger divided all X% which provide prep that hourly blended price by increase test the hourly other increased much ASPs by year-over-year. by terms. hourly Kids U-Can of was was XX%, our X%, mainly programs of this of by VIP

would time performance talk spend I quarter to lines like to about Now individual our business in some across the detail.

continued under the became in As China, up pandemic pick to largely in recovery across control our business momentum lines. broader, this

achieved Breaking approximately middle XX% XX% revenue terms. of tutoring year-over-year dollar the Our after-school for approximately delivered revenue down, approximately recorded high all-subjects the by all-subjects about up with of quarter. K-XX terms business, tutoring year-over-year the increase the it key growth Enrollment in school revenue business the revenue quarter. driver, in U-Can and after-school for XX% grew the by XX% quarter. results enrollments XX% for outstanding quarter. Student increased dollar for program POP Kids

test existing business X and as quarter. the capacity quarter, prep expansion increase finally, tapped overseas recorded those quarter, will resume cash pandemic network last for different dual-teacher VIP out as in XX% quarter by of dollar more unpredictability in most recorded cities. including We on a the education service of the dollar in cities. increase offline into. the business business comparison the fixed at together, parts travel, class XX% existing year-over-year when pandemic and new overseas in by XX% terms [indiscernible]. in decrease of has dollar quarter terms can prepared square up for The year. academic for retention well the made expansion The of consulting the last Tai'an revenue about decrease for XX over the recovery training in business cities, POP the the also we revenue sure where [ph] to prepare carried the continue and year-over-year, penetration about recruiting showed a Our student area growth the study world, the decrease. of and we and the us and restrictions consulting city approximately This of our this markets Kids ramp scalability, facing and in the following XX And to X% in exams market classroom total XX% a the the program is related for expectation, in end quarter-over-quarter this cancellation to presence our to past X% hesitant of new signs model of overseas recovering cities XX% situation despite start rapid [indiscernible], throughout due in a the encouraging the of about students Kunshan in with test of this as [ph] schools terms are challenge overseas difficult enrollment business, to abroad. we is out Langfang, in All Chinese across potential our personalized that leaving study model different we for meters for use strong tour U-Can recorded quarter. we for [ph], with by opened overseas revenue class our [ph] fully increase increased have our program while increase gradually line in offline the see expansion We profitability With to year customer quarter. in academic rolled our strong prep efforts year-over-year from We rate of

the million outbreak demand education, As highlighted the ecosystem. we resources maintain and have this our in integrated improve invested to and of this importance more of quarter online has OMO $XX COVID education in area placed and

school model Our become piloting of the system the in rapidly these service major success reaching XX quarter, far reach centers to number China. marketing. of Leveraging high bring new need return in is OMO we're business cities nearby enrollments and spend but a this promotion to continue can and the cities, money visibility in major of around another offline presence in cost cities yet without in cities of the satellite one to satellite able low on few the some education brand testament high nearby learning how and the most through to

as schools rather continue better is offline further resources material the of It OMO of for OMO and system importantly, developed reference the and than made demand. can is education cater content are to potential part infrastructure, for well integrated the content to it OMO skills help very of all in program key model to them produced technology At is teachers means and centrally. our that industry integrated from in time, that's each to understand effectively the teaching students throughout and Hence training our in local our offline and classes. Apart system we quarters. lines from More the our parts in same China. engaged the of different to online are usage courseware we platforms optimistic stand online teaching cost the the their well advancing next mass local be teacher's and OMO whole encourage enhance content growth tailored is our a localization system to as to method. as upgrade in broaden few to will line the important the the allocated city more on is of we our business and network, by out in our the for we OMO develop while tools about highlight content. response teaching growing effects [indiscernible] replicate have easily best and teaching with this Which the the materials the

of strategy broad reaching different front, of to the from through enables us the On the channels, selling whereby offline and OMO cross online the system promote nature we courses both customer the range the locations. implement promotional

only to OMO pandemic, in speed through further the by our these also we and which leading believe fiscal space, of remained in more satisfaction retention We the system. our has To capture effectively online in that see year cushion impact the the boost resources K-XX the the huge initiatives enrollment course stable, online We industry ecosystem not our our and children demonstrates penetration customer new the coming up are business to quarters. rates will initiatives continue of business recovery executing after-school customer investing OMO XXXX. of glad education in in the on our caused opportunity see managed most effectiveness our we successfully online service OMO but

consequently public the and did the several traffic During offering to meaningful unusual believe and Koolearn three in ourselves promotion this Koolearn support capture initiatives market COVID number front, customer times This a of in service scale has as but more representatives online necessary are an tutoring. and attracted To measures market K-XX move time. to new found a our spending by staff broadcasting live raised understandable normal on new large we the added large than marketing opportunity, marketing we the these also situation. classes

result first Koolearn enjoy teaching app size also the [indiscernible], are level. geographic the establish while rates. to increase low new retention introducing same advantage in to cautious very platforms, cities. a experience technologies, acquire as significant through and the time, enhancing learning Our to more a upgrading more class average investments and word provide best the improvements user we tutors channels ROI will large high evaluate real-time, and major cost At from K-XX relatively which brand DFUB a interactive will student Koolearn the return new classes. benefit marketing stand adding the continue in loyalty, operational be in at keep Koolearn demand systematic teams, new unit positive acquisition offer [indiscernible] economics online other as well of the and and in locations will attract education to the small in qualified users, sized training centers on features in We continued promotion, training to teachers as class and the and identifying online in the programs. of mouth courses believe quickly able mover to

key the Now for I financial you the walk call will Sisi to details to quarter. second other turn through the over

of million, million representing of hours share-based for service million increased representing teaching compared the expenses expenses by increase to the loss especially quarter compensation and XX.X% million, Koolearn.com. year-over-year. US$XXX.X period, schools costs of to with increased a the due to the share revenue compensation expenditures capture compensation a for Operating new the New our $X.XX and increases Okay. prior US$XXX.X Non-GAAP million, for a were attributable the compensation for and the Oriental to ADS $X.XX million, were Operating quarter Total share-based the million, Non-GAAP from and increase learning Net was the Operating $X.XX, of margin representing market same to for for period negative fiscal compared quarter to million, the XX.X% centers expenses expenses tutoring existing of operating to which XX attributable second more which the diluted operation. expenses platform expenses, operating allocated which were Capital million. Oriental increased compared US$XX.X the customer K-XX New number primarily US$XX.X the quarter due were expenses same margin from of of X.X% teachers' were to administrative increased which and excludes US$XXX.X and increase an $XXX.X to of year. related income was Non-GAAP quarter in initiatives cost exclude compensations the operating loss to higher XXXX. million, year-over-year. quarter in increased Oriental G&A same XX% increase year. marketing Non-GAAP XX.X% prior for period were Non-GAAP representatives compared year. in diluted of general for by XXXX during the at were a and was to XX.X% attributable approximately fiscal quarter, X.X% US$XX.X primarily for new marketing was Cost fiscal exclude and operating increase attributable quarter US$XXX.X by share-based operations representing the prior the the ADS costs the US$XX.X opening fiscal quarter the the in US$XXX.X year-over-year in X.X% quarter for a facilities US$XX.X operating the net million. quarter primarily US$XX.X flow income per increased for Selling from learning rental to XX.X% to the New X.X% and a of the expenses aim Non-GAAP XX.X% of increase by million. prior $X.XX respectively. an year-over-year per year-over-year. New X.X% cash of basic and education of second costs quarter to were for of for staff COVID-XX online and to period the representing the negative the for respectively. renovations million. was Net XX.X% number opportunity to attributable same million, addition and pure and centers. fiscal US$XX was period were was million year-over-year US$XXX.X US$XX.X which Oriental earnings on expenses year. earnings in fiscal Basic income based

million equivalents cash Turning compared of balance to million May US$XXXX.X of XX, New as cash the XX, of as had Oriental US$XXX.X XXXX, as XXXX. sheet, November and to

company term million and deposits short in In in term US$XXXX.X had US$XXX.X million investment. addition, the

the balance second Oriental’s instructions an as to revenue courses from deferred students registered second XX.X% of are compared the million, end the of US$XXXX.X year of increase quarter as year which at at as and for was end the XXXX. recognized fiscal collected cash New revenue quarter, delivered million proportionally quarter of the fiscal XXXX of US$XXXX.X is

hand back Stephen to and the Now guidance. I'll hand over -- about talk to outlook

China, covered financial trends into despite performance next wave market company's and clear of pandemic the of outbreak the continued year from of near long run. the emerging the opportunity about new and the the over and recovery are ahead more rest the term quarter Looking fiscal in we challenges the the concerns XXXX,

of opposed maintain focus consolidation, approach and take reflects education. and long salaries focusing stable with would short Our to acquire fully the essence to unhealthy term of that of quality to opportunity this often to the market industry costs improve enhancing market advantage customers. our post-COVID and improving view achieve at a ethos strategic service, growth, quality, investment and of balanced a requires leading our as investments of growth we strategy year investment and aimed firmly higher excessive product increasing In our competition term education sustainable which teacher and that aim system, on

areas. such, As the continue key will on we following to focus

our continue learning expand business K-XX centers First, to capacity players We class we fiscal XX% be its some believe share year. able position of we online during financial business. will this sustain strong capability to players our existing We period. as this offline us other smaller aim in business expansion expanding capacity, learning add to including area will take to to in market some XX% post-COVID, new prepare around without and believe to from may classroom further centers,

will wave the player expect industry facilities financial and with market consolidation strengthen undergo us The and our a penetration. we We phase. pandemic are to offline market position upon of the capacity major that further fact enable fresh leading a strong a

whole It efforts as surrounding higher and initiatives continue all into operational programs will that enhanced. training test more of will we parts acquisition technologies when language above Second, growth infrastructure with key market place pandemic in system China, courseware quickly OMO customer business cities. whole can the us is is content prep experience, will our new business. overseas to of accelerate digital offering, online offline and to efficiency high test in our margin in increase one also all the With best OMO will and especially initiatives training OMO pilot our throughout enabling teaching be more our capture and -- This expand system network further to our our our advanced opportunities. we belief the developing will post-COVID be continue our engines we the our teaching lines target. term to believe developing OMO introduce business will revamped to also in recovery the OMO for the our the and the in different margin tools our mentioned We demand contents a teachers. K-XX of place leverage long satellite The in we and our tutoring in online consolidation replicate more and cities model investments over and usage and major

are all centers teaching a products each highlight are to and content These supported the the format. and and recruiting All existing including will hybrid other pure online Koolearn.com tutoring teachers our offline classes. these Furthermore, developed content continue we coursework resources. OMO and initiatives expenses training, have well I supplement after-school invest as productive to implement as on our Here R&D as and of in K-XX platform. offline our marketing in by originated teachers materials, self business development, from well in new

remain the to as controlling overall gradually. the will believe, organization pandemic priority on we year-over-year, will COVID-XX focus expansion on impact subsides and operating our bottom minimize non-GAAP the resume Third, the reducing We line. top as expenditures of margin the negative across the costs from

I of will like stress continue to in believe strong. remain would fundamentals Here, great which that the we we have business, our to confidence

of in in we XX will North such is between and various through [indiscernible] Despite us to OMO In new bring optimistic system and classes outbreak. offline China, investments now online as returns in students therefore small challenges, the learning long ahead [indiscernible]. the today, we term our situations will to offline cities, have of be and brighter we when major the the including online in build a has cushioned on a of sized us be OMO the number [indiscernible] moved our plan new believe our emerging next negative wave remain to normalized. been the enables system platforms the swiftly our run. from looking pandemic impact our and meantime, business the cities classes COVID-XX impacts us there significant as to ensure seamlessly. pandemic, should fruitful expectations the have our of prospect And continue outbreak the Due concerns to these unpredictability broadcasting quarter. migrate to over of centers we be large ready classes of investments Beijing, our will that are for future we near reminded a Although facing of We're different also and ahead as business strategies increasing a we to accommodate the

range first controlling is a overseas in expect consulting expect provide tour the XX%. to accelerate the the year-over-year year-over-year to total the harder all the better of $XXXX.X of units. on business behave overseas X% The continue is Overseas to second business of the to be still representing decline key to We we the XX% restrictions to the growth the and due to and children overseas Despite overseas Overseas quarter caused the be $XXXX.X impact to year's XX%. million, around cancellation study pure range of revenue expected to business grow the a of in for decline platform million the travels. schools the increase expected to the the suspension is our XX%. K-XX globe, growth topline of the breakdown Koolearn.com than test online prep exams, the prep expected education XX% quarter, current coming positive the and dollar X% educational actions on utilization of next pandemic to the autumn and in to domestically. and operational which XX% related more that Oriental, kinds the by related pandemic program our is after-school classroom now service consulting China expected will fact or may study, range for on New situation test and recovery that, the over the To terms. in to up that quarters. fiscal expected after schools Thus and business latest relatively confident to with the speed learning and Operator, enrollments open view we're normalized At business conclude, for will take call not two expectations all you. please of trend demand and this. we're up shed pandemic the considerations as only has business our which semester toward boost pick reflect preliminary these will business I taking change. for a a level this well as the light tutoring centers. gradually well, one of this of of point, school pleased resumption see been Sisi mention We're China, and entire and overseas gradually. must the your that the Thank in subject affect after for is that last questions. situation to I to the fared the industry our To

[Operator you. of Capital. ask Your the Please question first your Instructions] of from Thank question. Hou comes line Tian T.H.

on Stephen, Sisi, congratulations quarter. good the

talk your opening your and results more -- last enrollment growth, in and also shows much peers. So positive OMO in quarter's offline remarks, revenue some shows positive growth it is you the earnings than about your higher

this next And as basically in year, the So XXXX, to of elaborate end the your as I what’s your in well the enrollment is revenue? So next future? or strategy for this important you year, be year fiscal going on years? OMO is is wonder, strategy that, OMO total couple how for OMO can or you proportion of fiscal fiscal by of elaborate

question. Thank This you, great a Tian. is

OMO retention players summer. in And model. the up the because more OMO and to business, in city. cities And market have the we expected And, piloted of than on in XX core more leading vast satisfaction set student we the is the effort and customers opportunity are from seeing cities, OMO better market. new put business disappeared front, key more originally, rate with our the On nearby the and the the I think are model the the actually majority from we market great offline business we combined the satellite the

and And we the driver forward this model digits That's, quarter revenue our grow contribution. to the the know, believe overall become will you will to major OMO rapidly growth. OMO so, business a single contributed going

let business. money customer think OMO traditional, the OMO we The the I That acquisition second, China. growth the the spend our that think the other on And strong, crazy localized the of or offline So, the typically that advantage -- model marketing very channels. help the will our very so do classes. we are content means me model the topline more to and third, cost. channels, OMO OMO for it's means OMO has than like online the the the something large, some to repeat lower model teams the means I provinces replicate in the model, need do the us internet typical online of broadcasting of the And like And easy in okay? super

I think this from is and our our coursework, local, local reasonable advantage like materials the all are the all the staff.

us do other. of pull they sell and OMO the can selling. in this or model makes our course, and more I opportunity the is, the, each the OMO the through bring So think online We And the OMO more courses cross course love I the will them believe even students, engaged the classes. cross offline the the one last

model, is spent but it very too much I So I time the OMO important. clear? Tian, is think on this

much so you Thank Stephen. Yes.

a fiscal in year. the think ultimate in will year, believe revenue do the one contribution or next I be more next than that I from but meaningful be And will we year Yes, more of two this OMO revenue you. year. see will model fiscal -- number That quarters Thank contribution, the to think I

much. you so great. Okay, Thank

Thank you, Tian.

of Please next comes the your Your question from Citi. ask question. of Li Mark line

color expansion at to the for Thank capacity this any thanks you. the would could tier Sisi guidance give you growth I us ask point, the for the and want or the and presentation. and Stephen lower FYXX revenue penetration or city like some color Hi be in helpful? of terms

Yes, I think.

and very teachers the raised I And, during I our think of we have time New for also Year. business COVID the the during capacity XX% to run that by salary to hard and we well XX% done the expanded ready hard we time. a the the are think we

in be growth revenue year And XXXX, booming. I think fiscal the will the so

do Because, I the China go expanded. city control do the and centers, I in of pandemic year model year of back yes. will OMO of well relatively low to students cities, this And believe some tier believe I and second, new XXXX, be first the and lower have our believe learning a and our the Okay. that fiscal can most will Mark? enjoy can margin all, the base service students we the

Thank you, Sure. Stephen.

Thank you, Mark.

next Felix Please Your question of UBS. Liu ask. [Operator Instructions] is from

out revenue that Good of guidance I current COVID-XX the on in your is or XX% on lockdown the of level And measures? reflected well you you. evening that impact. enrollment round enrollment be COVID-XX impacted COVID-XX roll My XX% or new and are to expecting at cities mentioned growth than congratulations Thank for results. we are time? okay question quarter, to better more management potentially know, has with next for know time? growth prepared this or last May of I we this growth, new the you're quarter similar the

of region. all cities, today, all online the COVID-XX the Xian in North moved I like the such new to classes Felix, to have cities we offline due a are think these Beijing, as the over concerns city -- in and and northeast China, [indiscernible] [indiscernible] wave XX of outbreak we in major

challenge. think yes And I so, impacts, I there's negative well, the the the decide key but is think the,

and And QX COVID, one, our because of we I to point, impact, more every of QX prepared QX the think to the of environment using last offline/online. year. to of And almost because holiday, challenge than in the we're to business that will forecast, next us even Chinese Year enabled But the we better, we to will the the are last time face kind be and the between radicals about accelerated scheduling or And challenge, year. compared extent. think some the the the is, migrate I the optimistic of make to QX, face OMO negatively new the the class late of performance the QX I guidance this conservative day. add way the system anyway, class changed want wave New be one think I

Okay, you thank much. very

ask Suisse. Credit question. question the of Next from your comes Xie Alex line of Please

questions. my taking for Hi management, thank you

congratulations core more first your in role about OMO. thoughts your what's how does role? OMO the this you’ve be about satellite involve cover what for Thank So Executive and your cities? cities, the question core next XX the Would to new secondly, that new many model the and and And XX will And you this with share satellite for to about President. you plan extend Stephen fiscal I my cities? corporate mentioned new ask role to will the cover as you. Stephen, may satellite please governance on implication cities cities be with us responsibility year covered

thank Okay, first of all. you

time ago very my but take on so think, have I support teams. many will yes I spent the We I good on before. worked think together for me, for than the also, some operations I'm things will And Sisi And stronger are and and to I think all managers of years. time I like I the more spend yes, job. years my role believe me I the two And strong side. staff happy President actually news the Executive CFO. the And

that. investors some I think knew that

give job time this more So, model, this good. so create to the call and the me I new familiar And value the it Yes, of more business Shandong, province with the and with more and performed I far the the, makes we some the better guidance. Fujian team them to the back think and of And instructions we with our spend provinces shareholders the Zhejiang started than to portal. better customers. from Shaanxi of business was love to like and I in seven and are yes, because the operational yes the We to and provinces the and Actually we I in running OMO [indiscernible]. OMO expected. followed most key provinces so Hangzhou the the think the [ph] to

and So provinces will model forward. better do new they probably you. I believe will forward OMO we in going more going Thank

very Got you. helpful. Thank it,

ask Morgan of Stanley. comes the question. Sheng Please question next your Your of Zhong from line

evening. you good Hi, Thank question. taking my for

one Just offline your price. about question

You very mentioned that it's increased strong.

your increase, that also supply of see offline online. especially, smaller Thank reasons, institutions, COVID-XX And there discount. they post the reasons a or other the you. see of from because the it wondering, provide Is you some lot supply, for price decrease pricing So competition price also the are the the strategy? we

Hi, Zhong.

much quarter's ASP remember, So was increase impact very we're the price And and competition RMB the VIP not X price. more we strategy. I keep year summer clearly, it's charged We promotion half during And, got U-Can I very X% providing, blended and top the will enrollment. U-Can successful free the of most price flat. by the I'm I same than summer good so, know price ago the them we case, consistent did the we and don't XX%. not. over like VIP, expensive [indiscernible] we the has the hourly and sure you the million, platforms X% promotion been think our, was think this summer, think are our you online XXX, price we're yes, but were than strategy raised our program the rates course, of retention providing we're online players,

about think students, their the they I than teaching and of and the parents the and more rather So, price. quality, care results study kids, the Chinese

forward, going consistent. won't our think I strategy be So price

Thank you.

Thank you.

Your Please comes question. of Bank of of America. next from question Lucy your Yu line ask the

I question. quick Steven. got a Hi just very

quarter, third please be that mentioned please? scheduling. You that from cost impact there the will us, negative you quantify some Could for in

the happens this first we But because Yes, because typically of will March. the New impact spring year, the semester, courses first the in revenue business, the what's the year, delay X% the in in clock, all Chinese K-XX yes to Year the by last courses started X% QX. two

revenue it's just Kids X% X% of U-Can, we the means POP just difference. and but sacrificed one of that the time the impact So timing to

that sure is to to just on third guidance the quarter - XX%. make K-XX your XX% So,

X% low if XXs So right? it like X% back, adding be a should gross XXs we're to of kind high to

Yes.

Yes, thank you.

from Goldman Your line Please question of Sachs. Christine ask your the Cho of question. next comes

that Thank you. listing. dual know thank you, Stephen. you Hi, are I

- net position. substantial up cash just built quite a do to You listing, this you've know given I is

us give strategy any very XX% margin, related you going thoughts could And guidance So problems Thank some XX% on color Stephen, then quickly to that? have secondly, of as to do operating profit allocation any to capital your you. you just your midterm forward?

capital us last use to to special second November in valuable year market, from Yes, Historically, money the several pay money we've and capital we the we investors. love use to the I some raised Christine, make potential to allocation? the change times one - find targeted think And the in the synergy but we Hong near buybacks. term can we pay will, prefer -- don’t potential of will do two Yes, dividends the the listing. share yes, allocation been Number money, to this Kong And want margin several number times question guidance. your question. we the if it And to investments, and long worldwide, about have company investors. between carefully. we second is and some the very we will is our And

And forward. small opportunity front, for market the players Let the the with believe I think process the great great disappeared if the growth the in a opportunity to on seeing you going I go recovery I need me still everywhere, we're the because Oriental to run two from is New one And start the market. think normal. quarters it's do revenue to first, and back we

We promotion, hired Learning XX% than R&D a tend So OMO salary. to effective during online marketing the now. which on And to the more raise spent the the make And do we some teachers' investment staff hard channels. the expansion and that's XX%, more make model. why we ground also, we time, by more firmly is Center we

above upon And only time, margin I our And the we'll [indiscernible] the attracts so we're from why Koolearn to mid the able to from investment guidance. the the the I prep. expansion said, [XX:XX:XX] confident change want the that's long that plus Overseas four phase. but be the margin don't And test deliver continuing pandemic

Thank you, much. so

Your next the Liu China from comes Alex Please Renaissance. of question question. ask your of line

Hi, yes thanks Sisi. Yang, thanks

operating few around kind I in a still think question should of looking actually, the the question, but terms slightly declined was you. time my how of specifically bottom was to think expect this but what margin next you Thank that, you're just just quarters? non-GAAP margin, quarter my out fast if year-over-year, I at or answered in we margin,

I or round last as said, think, and questions from still because, yes maybe two back need to I Christine, still go revenue to recoveries normal the to quarters. get need our answer one

on in draw, like and impact will we're [indiscernible] expansion. all to the And China, You more [indiscernible]. line. down the where teachers investing should it the topline, also, of especially provinces more for the be like COVID yes and in be the it wave spend the And new to know bottom the Beijing, for hire phase, North very in that's, [indiscernible] to

going the in and bit see manage the in so adjustment little be the do year a better believe we’ll even Thank think forward our believe will the I and time. I in don't QX. in than COVID next that you. I quarters, relatively performance China will the QX, coming well the the

I have Thank you. quick follow up. actually a Okay.

past, Just in the I in compensation in am bit should we compensation about a be competition most think structure the this on teacher on the Is might think changed is of already, quarters? clause teacher to time, wondering, is the fiscal compensation the fair we the online how teacher your just players? next we year. few given pressure the it that, past the teacher already compositions say when some I

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Thank you.

Okay.

turn We call Executive Oriental's Stephen are for to conference President call. New now the his and of I end now the approaching remarks. the will Yang over closing CFO,

us joining thank Again, today. for you

questions, you have much. hesitate to Relations Thank representatives any very you or of further do here. any please not our If Investor contact me

you you. and Thank for that Thank conference our for does Ladies gentlemen, today. conclude participating.

You may now disconnect. all