On March 22, Sunlands Technology Group (NYSE: STG), the first adult online education company in China to go public in the United States, released unaudited financial results for the fourth quarter and full year of 2023.
In the fourth quarter of 2023, Shangde Institution's net income was 541.7 million yuan (76.3 million US dollars), a year-on-year decrease of 6.4%. The gross profit was RMB 468 million (USD 65.9 million), a year-on-year decrease of 7.0%.
In the fourth quarter of last year, Shangde's sales and marketing expenses amounted to RMB 305.8 million (USD 43.1 million), a year-on-year increase of 12.2%. This was mainly due to an increase in sales activity expenses, including an increase in sales staff salaries, as well as an increase in brand and marketing activity expenses focused on providing interest courses. General and administrative expenses amounted to 35.5 million RMB (5 million USD), a year-on-year decrease of 36.8%. The main reason for the decrease was the early termination of some office spaces, resulting in a decrease in office and rental expenses.
"The fourth quarter of 2023 ended successfully with a net revenue of RMB 155.2 million and a net profit margin of 28.6%," said Liu Tongbo, CEO of Shangde Institution. "Our revenue reached RMB 5417 million, an increase of 3.3% compared to the previous forecast."
In 2023, the group's net income was RMB 2.1596 billion (USD 304.2 million), a year-on-year decrease of 7.0%; Gross profit decreased by 4.1% from RMB 1.975 billion in 2022 to RMB 1.8941 billion (USD 266.8 million); The net profit was 640.8 million yuan (90.3 million US dollars), which is basically the same as in 2022, with a net profit margin of 29.7%.
As of December 31, 2023, the group has RMB 766.4 million (USD 107.9 million) in cash, cash equivalents, and restricted cash, as well as RMB 142.1 million (USD 2.00 billion) in short-term investments.
Shangde Institution stated, "In the past year, the company has remained focused on achieving sustainable growth, placing great emphasis on improving operational efficiency and optimizing our cost structure. In addition, we have received positive cash inflows from operating activities, providing a solid financial foundation for long-term business growth. Under the guidance of the board of directors, we will conduct strategic stock repurchases with the goal of creating lasting value for our shareholders."
On December 6, 2021, the board of directors of Shangde Institution authorized a stock repurchase plan, under which the group can repurchase up to $15 million of Class A common shares in the form of ADSs within the next 24 months. On December 1, 2023, the board of directors of the group authorized a 24 month extension of its stock repurchase plan. As of March 19, 2024, the company has repurchased a total of 496586 ADSs under its stock repurchase program for approximately $2.5 million.
In the first quarter of 2024, Shangde Institution currently expects net revenue to be between RMB 500 million and RMB 520 million, a year-on-year decrease of 8.3% to 11.8%.
According to the official website, Shangde Institution was founded in Beijing in 2003, focusing on adult vocational and educational exams, skill training, international education, and interest training. The training content includes pre exam training for self-study exams, MBA, teacher qualification certificates, accounting, and other projects. Since June 6, 2014, Suntech has comprehensively transformed from offline training mode to Internet education mode, and established a leading online live broadcast platform for adult education in China. On March 23, 2018, Shangde Institution was listed on the New York Stock Exchange, becoming the first adult online education company in China to go public in the United States. According to the financial report, as of 2023, the number of new students enrolled in the group was 616341, compared to 534280 in 2022.