BEIJING, May 18, 2021 / PRNewswire / – 51Talk (China Online Education Group, NYSE: COE), from China leading online education platform, was in the spotlight these days when it announced it had made its 6th consecutive quarterly profit, following the release of its unaudited financial results for the first quarter 2021 on May 17, 2021.
Founded in 2011, 51Talk recorded non-GAAP net income of 16.8 million RMB and GAAP net income 8 million RMB respectively.
The 10-year-old company’s first quarter net income continued to grow momentum and increased 23.3% year-over-year to over 600 million RMB. The gross margin stood at 73.4%, compared to 71.7% in the fourth quarter of 2020.
“We are delighted to report another strong quarter as first quarter net sales reached 600.4 million RMB, a 23.3% year-over-year increase which once again exceeded the peak of our forecasts, ”said Jack Huang Jiajia, founder, CEO of 51Talk.
Huang also said that the net income from its mass market K-12 one-on-one offering increased by 36% compared to the same period last year, and that the growing number of active students on the platform was the main reason to increase it.
The number of active students reached 393,000, an increase of 37% compared to the same period in 2020.
Acquisitions and cooperation for future growth
On the occasion of the celebration of its 10e anniversary, 51Talk also announced its “strategic upgrade” at its 2021 strategy meeting in March. Instead of relying heavily on one-on-one English lessons, 51Talk has made great strides in expanding its business. From March to May, 51Talk revealed three important moves to the public.
In March, 51Talk announced the acquisition of GKid, a ShanghaiAI-powered online English language education platform that offers innovative AI-powered online English lessons via interactive animations and picture books for children aged 3 to 8, in order to to further improve its AI capabilities.
In the same month, 51Talk cooperated with one of the largest publishers of children’s magazines in United States– Strong points. 51Talk said it will incorporate Highlights stories into its Classic English Junior courses for in-depth learning on a variety of topics and levels.
In April, the company announced that it had reached an agreement to acquire a 100% stake in Koala Reading in exchange for common stock to help develop the professional assessment of reading skills for its consumers.
Huang said the recent acquisitions will help 51Talk to seize its long-term growth opportunities.
“We are leveraging his expertise in Chinese reading assessments and plan to further develop an English reading skills assessment system that enables us to improve our product offerings,” said the 36-year-old CEO.
In addition, the acquisition of Koala Reading has also expanded our program product line and added Chinese-related courses, which is in line with our long-term strategy to further enrich the program product portfolio, “he said. added Huang.
financial director of 51Talk, Xu Min, echoed Huang’s statement. “We will also continue to create different tools and systems to explore new engines of growth, but our core business will not change over the next three to five years,” he said. noted.
According to Capital Watch, the company plans to further expand its user base in 2021 through promotions, diverse offerings and enhanced features, progressing towards its goal of becoming from China Largest online learning ecosystem focused on the English language.
Dominant market share shows the industry situation where everyone is a winner
from China top research institutes, the Chinese Academy of Sciences and the Ipsos group on March 25, co-published a report on from China K-12 online education research showing that 51Talk tops the market share list nationwide by owning 54% of the English-language online education sector.
In recent years, expanding lower levels has been seen as a strategic priority for Speak up. The The report showed that among the third and fourth largest cities, 51Talk is the dominant platform in the market, holding a 60% market share. For students from lower-tier cities of China, their educational resources are not as favorable as their counterparts in big cities like Beijing, Shanghai and Canton.
51Talk has invested in lower-level research and development (R&D) to make its platform more usable by students who may not have access to PCs or laptops.
However, lower level expansion is not incompatible with higher level recognition. Data from the report shows that in the first and second-tier cities, the company also ranks first, with 42%, followed by LAIX and Jiliguala at 15% and 14%, respectively.
The report also found that 51Talk ranked as the # 1 most popular online English learning platform in the world. China. Of those surveyed, 54% said they frequently use 51Talk and 31% said they would like to try the platform in the near future.
“Market share is an important factor in revealing a brand’s position both in the industry and to consumers. We have long been operating in the industry for ten years and will continue to expand our loyal student base by leveraging our expertise and constantly advancing our technology, ”said Xu.
Quality-oriented education highlighted in the future
These last months, from China the government has spared no effort to curb sprawling extracurricular training companies to reduce the excessive academic burden on students.
The government has taken various measures to regulate extracurricular training institutions. These include prohibiting middle and primary schools from taking students’ out-of-school qualifications into consideration when registering for school, prohibiting tutoring companies from exam-based teaching methods, ” teach advanced subjects outside the national curriculum or hire public school teachers.
However, the country has also encouraged schools and institutions to focus more on quality education.
Compared to traditional examination-based education, the term refers to the model of education that aims to improve the quality of educated people and attach importance to ideological and moral qualities, skills training, personality development and physical and mental health education. .
51Talk has always positioned itself as an advocate for quality-oriented education and aligned itself with national policy and denied the excesses of from China educational rat race. Therefore, the company believes that future growth will not be overshadowed by regulatory risks.
“We have taken a stand against exam-based education and believe that studying English should be learned with the right attitude,” Huang said.
“More and more Chinese families are realizing that English is an effective tool for getting to know the world well. At 51Talk, we won’t tell you the secrets to getting higher marks on exams, but we will help children understand English as an art of living and knowing the world in a better and complete way, ”added Huang.
from China the online tutoring industry has grown rapidly in the past year due to the COVID-19 pandemic, reaching 257 billion yuan in 2020, up 35.5% over one year, according to Shanghai– Market advice based on iResearch. The report estimated that the industry would reach 490 billion yuan by 2024.
SOURCE Online Education Group in China