Sizzling Stock Update: Four Seasons Education (Cayman) Inc.’s (NYSE: FEDU)

      

On Friday, Four Seasons Education (Cayman) Inc.’s (NYSE: FEDU) witnessed a gain of 2.36 percent in recent trading period with closing price of $ 3.90. The company’s last traded volume of 0.02 million shares was up it’s an average volume of 0.02 million shares.

Four Seasons Education (Cayman) Inc. (FEDU) recently reported its unaudited financial results for the first quarter fiscal 2019, ended May 31, 2018.

First Quarter Fiscal 2019 Financial and Operational Highlights:

  • Revenue raised by 25.6% to 4M(US$13.5M) from RMB68.7M in the same period of last year.
  • Gross profit raised by 2.7% to 2M(US$7.5M) from RMB46.9M in the same period of last year. Gross margin was 55.8%, contrast with 68.2% in the same period of last year.
  • Operating income reduced by 21.2% to 1M(US$2.4M) from RMB19.2M in the same period of last year.
  • Adjusted operating income(1)(non-GAAP) reduced by 11.3% to 1M(US$3.3M) from RMB23.8M in the same period of last year. Adjusted operating margin (non-GAAP) was 24.5% contrast with 34.6% in the same period of last year.
  • Net income reduced by 38.7% to 0M(US$1.2M) from RMB13.0Min the same period of last year.
  • Adjusted net income(2)(non-GAAP) raised by 4.9% to 4M (US$2.9M) from RMB17.6M in the same period of last year. Adjusted net margin(3) (non-GAAP) was 21.3%, contrast with 25.5% in the same period of last year.
  • Basic and diluted net income per American Depositary Share (“ADS”) attributable to ordinary shareholders was 16(US$0.02) and RMB0.15 (US$0.02), respectively, contrast with RMB0.35 and RMB0.32, respectively, for the same period of last year. Each two ADSs represent one ordinary share.
  • Adjusted basic and diluted net income per ADS attributable to ordinary shareholders (non-GAAP) was 38(US$0.06) and RMB0.35 (US$0.05), respectively, contrast with RMB0.51 and RMB0.47, respectively, for the same period of last year.
  • Number of learning centers reached 49 as of May 31, 2018, contrast to 32 as of May 31, 2017.
  • Total student enrollment(4)reached 45,113, up 3.0% from 43,779 during the same period of last year.

First Quarter Fiscal 2019 Financial Results

  • Revenue raised by 25.6% to 4M (US$13.5M) for the first quarter of fiscal year 2019 from RMB68.7M in the same period of last year, primarily Because of tuition raises in standard programs, raised revenue contribution from the Ivy Program and the small-class for standard programs, development of kindergarten and middle school and non-math programs as well as the expansion of physical learning center network, including the contribution from newly purchased business as revealed in the fourth quarter of fiscal year 2018.
  • Cost of revenue raised by 74.8% to 2M (US$6.0M) for the first quarter of fiscal year 2019 from RMB21.8M in the same period of last year, primarily attributable to costs associated with the raise in faculty staff count as well as learning centers’ rental, utilities and maintenance and depreciation costs.
  • Gross profit raised by 2.7% to 2M (US$7.5M) for the first quarter of fiscal year 2019 from RMB46.9M in the same period of last year. Gross margin was 55.8% for the first quarter of fiscal year 2019, contrast with 68.2% in the same period of last year. The decrease in gross margin was primarily Because of the expansion of new centers and faculty team, which incurred certain upfront costs, as well as the discounts granted to students to promote our middle school and non-math programs.
  • General and administrative expenses raised by 22.3% to 0M(US$3.9mmm) for the first quarter of fiscal year 2019 from RMB20.4M in the same period of last year, primarily attributable to raised staff cost of RMB3.3M and raised share-based compensation expenses of RMB1.3M, as well as an raise in rental costs associated with the relocation of the Company’s headquarters.
  • Sales and marketing expenses raised by 11.1% to 1M (US$1.3M) for the first quarter of fiscal year 2019 from RMB7.3M in the same period of last year.
  • Operating income reduced by 21.2% to 1M (US$2.4M) for the first quarter of fiscal year 2019 from RMB19.2M in the same period of last year. Adjusted operating income, which excludes share-based compensation expenses, reduced by 11.3% to RMB21.1M (US$3.2M) for the first quarter of fiscal year 2019 from RMB23.8M in the same period of last year.
  • Net interest income raised by 277.8% to 8M (US$0.4M) for the first quarter of fiscal year 2019 from RMB0.7M in the same period of last year, primarily Because of raised cash and cash equivalent, and efficient cash management.
  • Income tax expenses raised by 17.9% to 1M (US$1.3M) for the first quarter of fiscal year 2019 from RMB6.9M in the same period of last year.
  • Other expense, net reached 2M (US$0.3M) for the first quarter of fiscal year 2019 from RMB0.08M in the same period of last year, primarily Because of an RMB4.5M (US$0.7M) fair value change of a 2-year Pimco fund-line note with 100% minimum redemption level at maturity that the Company intends to hold to maturity. Other expense was partially offset by an RMB2.0M (US$0.31mmm) other income received from depositary program.
  • Net income reached 0M(US$1.2M) during the first quarter of fiscal year 2019, down 38.7% from RMB13.0M in the same period of last year. Adjusted net income, which excludes share-based compensation expenses and fair value change of the Company’s long-term investment, raised by 4.9%% to RMB18.4M (US$2.9M) from RMB17.6M in the same period of last year. Adjusted net margin was 21.3%, contrast with 25.5% in the same period of last year.

The stock as of last trading session moved 22.64 percent up from its 52 week low and was -63.65 percent behind its 52 week high. The stock’s price switched up 0.71 percent 20-Days Simple Moving Average dropped -8.39 percent from 50-Days Simple Moving Average and fell -37.57 percent from 200 Days Simple Moving Average. The company offers after-school education services for kindergarten, elementary, and middle school students. As of February 28, 2018, the company operated 31 learning centers in Shanghai and 7 in other cities. Four Seasons Education (Cayman) Inc. was founded in 2007 and is based in Shanghai, the People’s Republic of China.