RISE Educcation Official Website

On May 20, RISE Education Cayman Ltd ("RISE" or the "Company") (NASDAQ: REDU), a leading junior English Language Training ("ELT") provider in China, announced its unaudited financial results for the first quarter ended March 31, 2021.

According to the report, revenues were RMB261.5 million(USD39.9 million) for Q1 2021, up 140.0% year-over-year. Revenues consisted of educational programs, franchise revenues, and other revenues. Revenues from education programs for Q1 2021 were RMB229.5 million(accounting for 87.8% of total revenues), up 125.0% year-over-year, primarily due to the alleviation of the COVID-19 and OMO strategy deployment. Franchise revenues for Q1 2021 were RMB31.8 million(accounting for 12.1% of total revenues), up 420.6% year-over-year. 

Cost of revenues rose by 13.8% to RMB162.2 million(USD24.8 million) because the termination of rental concessions, increase of teachers' compensations, and resumption of employers' contributions for social insurance and payroll taxes. Together with the significant year-over-year improvement in revenues, gross profit improved to RMB99.3 million(USD15.2 million)for Q1 2021, compared to a gross loss of RMB33.6 million in the same quarter last year. 

Operating loss was narrowed to RMB34.8(USD5.3 million) for Q1 2021, dropping 73.5% year-over-year, although operating expense walked up 37.0% to RMB134.0 million. 

As for the bottom line, net loss attributable to RISE was RMB24.6 million(USD25.5 million) for Q1 2021, down 75.3% year-over-year. 

RISE Education Earning Presentation Q1 2021

Net cash flow from operating activities turned positive this quarter, reaching RMB77.2 million(USD77.8 million), compared with the operating cash outflow of RMB82.4 million and RMB108.5 million in Q1 2020 and Q4 2020, respectively. As of March 31, 2021, cash, cash equivalents, and restricted cash totaled RMB692.9 million, an increment of RMB53.7 million for December 31, 2020. 

RISE Education Earning Presentation Q1 2021

Mr. Warren Wang, Chief Financial Officer of RISE pointed out that "only one of our self-owned learning centers in Beijing re-opened in March after the temporary closing of all our learning centers in Beijing since late January as a result of the resurgence of COVID-19." However, the total number of new students enrolled for Rise regular courses in Q1 2021 surged by 287.9% to 5,846, compared with 1,507 for Q1 2020. New students enrolled for other Rise courses (including Rise Up, Can-Talk, other Rise online courses, STEAM, courses provided by The Edge learning centers and light courses) were 44,262 in Q1 2021, compared with 32,551 for Q1 2020, up 36.0%. 

As of March 31, 2021, the Company has 525 learning centers: 95 self-owned and 430 franchised learning centers. 

Regarding the 2021 business outlook, RISE is upgrading into a multiform aptitude training platform with more diversified product offerings and further optimize its OMO strategy. "In addition to our core ELT courses and other existing courses, we have also launched two new brands to complete our aptitude training ecosystem – Hiyeah, a brand focusing on children's social-emotional development and related family education support, and WhySTEAM, another brand focusing on STEAM-oriented aptitude development for children. We expect to launch certain Hiyeah and WhySTEAM offline learning centers in the second quarter of this year." Mr. Wang stated.

For the full year of 2021, RISE projects their revenues to be between RMB1,420 million to RMB1,730 million.