Tarena International, Inc. (NASDAQ: TEDU), a Chinese vocational and K-12 education service provider, announced recently its unaudited financial results for the third quarter ended September 30, 2020. According to the report, the net revenues of Q3 decreased by 5.8% year-over-year to RMB620.8 million (US$88.8 million), from RMB659.2 million in the same period of 2019. And the net revenues for nine months ended September 30, 2020 decreased by 19.1% year-over-year to RMB1,247.6 million (US$178.5 million), from RMB1,541.8 million in the same period of 2019.
The major business of Tarena International consists of adult IT training and Tongcheng Tongmei which offers programming education to K-12 students. During the reporting period, the latter achieved significant growth, which represented 46.6% of the total net revenues, increased by 146.0% year-over-year to RMB289.6 million (US$41.4 million), from RMB117.7 million in the same period of 2019. And as of September 30th, the total number of learning centers in K-12 education increased to 236 as of September 30, 2020, from 209 as of September 30, 2019.
Previously, Tarena International mentioned in the earnings call on August 12th that the company has reached more than 100 million cash revenues and incurred revenues in July, and 132 of the 232 K-12 learning centers can achieve a profit of class consumption. “And we have - and kid center profitability is one of the most important parts of our group profitability.”
Meanwhile, the company shrank the adult business that the total number of learning centers in adult education decreased to 106 as of September 30, 2020, from 134 as of September 30, 2019. And total student enrollments in the adult education business, defined as the total number of courses enrolled in by students during that period, including multiple courses enrolled in by the same student, in the third quarter of 2020 decreased by 29.4% year-over-year to 38,400.
Tarena International claims that the decrease of net revenues is mainly due to the declining revenue of the adult business and COVID-19 pandemic. After taking into consideration the seasonal fluctuation factor and likely continued impact of the coronavirus, total net revenues for the fourth quarter of 2020 are expected to be in the range of RMB540 million and RMB570 million.