Q3 2019 Earnings Call
Ladies and gentlemen, thank you for standing by welcome to do rise education third quarter.
Earnings call at this time, all participants in the listen only mode. After the speakers presentation. There will be a question answer session desk question during the session you'll need to press star one on your telephone.
Please be advised of todays conference is being recorded.
I like the other conference over to your Speaker today. This maybe thank you. Please go ahead.
Oh, Thank you operator, Hello, everyone welcome to <unk>. So the cases, a third quarter 2000, <unk> earnings conference call today, but you will hear from me mr. exceeding the old who will give an overview of the comedy that's got a d. and it isn't it the amendments or both.
Yes, definitely know who will go to our financial results in more detail.
So lets proceed I like to remind you that today's discussion may contain certain forward looking statements made under the Safe Harbor provisions you asked a private Securities Litigation Reform Act So 1995.
These forward looking statements are subject to risks and uncertainties.
Actual results may differ materially from all that kind of the presentation.
To understand the factors that data could call. So there's not study I'm not sure they differ from those in the forward looking statements. Please refer to.
Well I'm trying to.
Oh the list I think you see on April 19, she's not the 19th.
We do not assume any obligation to update any forward looking statements, except as required under applicable law.
At this point I'd like to turn the call over to Mr. seating. Please go ahead.
Oh.
Got.
Yes.
[noise] Kevin Wilson.
Hi.
Yep.
Thank you everyone for joining us today I noticed you really need stretches the prepared remarks Rahimi English.
I'm delighted to report not least wonder well across all businesses.
They stopped the challenges posed by the regulatory environment in a macroeconomic headwinds.
Well the polymer increased by 19, 18.4% year over year.
Okay, good or 11.1 million.
Adjusted EBITDA increased by 30, 737.1% here, we are sure 88.9 million and adjusted EBITDA margin expanded by 290 basis points to 21.6% from 18.7% for the same Karen I'm Lucky.
Sure.
Before I review overcome woman and likes to remind you that starting from this water.
Operational and financial results include Chicago Operation, which has been consolidate it seems to life or.
Total student enrollments are couldn't help but you want us all the new student and education they seem student.
During this quarter this quarter Sally total student enrollment was up 15% yields here and even stronger he's woman's often used students up 19% year over year, what resonates lots in our self older Learning Center.
Due to the change into eastern flagship schedule, we are going to begin to closing student enrollment in the state is clearly how long have been collecting the two each and every three months since December 2018 separately from the cities, where we continue collecting food fluctuation.
During the summer water total student enrollments wall or regular course is including lifestyle oriented rifle, where one or 14000.
700.
Chris I was 15% year over year off is 6492 students were from state is there that led to Leisha is match it averaged three months.
6000 of several hundred an eight inches students work all cities, where the to work to Asia is crafted.
No 1400, introducing you to work on our newly consolidated Chicago Learning Center.
Did any willingness from other Reits losses during the quarter were 1170 fly.
Regulation mandate history, Maucher lesion payments and the cancellation office, who they probably have had it Edwards up the impact all total student enrollments in Beijing, which is all our fiber market.
But im happy to into fall first.
Well I eat comes to new students.
We are no there are no longer able to offer students, who they classes and as restricting tuition payment history.
Three months these though to see monthly installments kids parents and more flexibility to decide whether they want to continue their child was at the time of payment rollover.
Well. This reason we have begun to SAP related close you all the numbers well the cities, where this regulation like separately.
Second we can no longer renewals theaters the contact so had on their graduation athlete the last year, which has impacted a student ready meal and retention as well as all Burgos student enrollment growth this quarter.
With that I believe that our student enrollments are will restore isn't strong momentum when they complete a suicide cooperation enters a new regulatory environment.
These regulations have a quick 18 <unk> opportunities all who he has all the operation to usual high or do those hand apartment affects function and that drive the growth in car payment meet rollover.
We have already begun to see the cruise how far labor will improve the marketing efficiency and I'm complications. This trend will continue going forward.
Although clearly Ricky Gervais, if it was 69% compared with 71% of doing the things are locked here in the coming quarters, we will continue working hard to improve customer and employee satisfaction optimize our marketing initiative.
Older to drive new student enrollments in a border enhance all by retention rate.
We added a seven stuff on the learning centers with a total all from 78 losses from the consolidation, although she jodrell operation student Walter.
Also added it took you think that franchise early centre in cities, such as China, do glossy xenon and long haul.
Right now I have 87, south older and it's interesting it's cities and a 364, Tony Sanchez in 140 Tuesday.
We will continue to acquire franchise and learning centers when the opportunity arises.
We continue to enhance our curriculum and product offerings.
We are developing new ways to integrated technology into our costs. They are too well, there empower teaching and learning.
We will begin testing and artificial intelligence power to online teacher into our classes in December before deploying needs more widely next tier two said, it's my parents and demand for native English teacher.
At the same time, we are developing story and a burning treatment animation content leeches, the particularly appealing to young kids.
More importantly, the new content is designed to develop a problem solving skills and the two multi lady young children to apply what they have learned to in hospitals.
You saw real world a problem.
We wanted that parents are more actively lobbying their child education to ensure they fully understand what their kids have learned in the classroom and are able to closely tracked the truck their programs.
We also plan on introducing all them into the reality technology to enhance immersive experience out lower cost and help reduce the separation anxiety. Some younger students. They are having increased their interest in attrition Stan.
Extend that opportunities over acted as a learning as opposed to divide them into all the social skills.
Oh I knew them of course is that helping design to specifically engage in the acquired promise not to the students are in the final stages, all the development it and it will be launched soon.
This new demo costs as the beach will incorporate virtual reality in artificial intelligence technologies are designed to do but it was doing is critical thinking and are consistent with the government research into quality or into the occasion as part of the 13th five year plan.
They continue to roll it all up they suffered right like Oh, you talked about at the online platform, which aren't you, reaching its product offering and a swap content to sacrifice satisfy the increase in each of our customer.
Lets plot also offers a convenient way for students to extend that learning experience the on the classroom.
We continue to execute our strategy I'm strengthening the online offline integration off older coal cost product.
We maintain a competitive at ash want you to comp adaptation educational content.
Working to whether integrated technology into our core swell to empower the teaching and learning process.
That before that's all for the students and parents a personal talk joining the comes to adaptation well in Chinese there's other dogs you alluded to the.
Nothing can't replace our teachers ability to engage with a student directly in the classroom.
It is that though technology can definitely has and learning there was an X 10, it it'd be called the out beyond the classroom, which is in increasing demand for students and the parent.
We have decided to strategically squeal down our online product the cannot at least half being all patients will over a year now, but that's now to contribute a meaningful revenue yet revenue and profit yet.
Our ongoing athletes to upgrade all were create club and the products that are to enhance the teacher performance.
T. Two m. shows a customer satisfaction teacher pro Formas word of mouth referral Anna student retention in the near future.
At the same time I'll bet, you must know the incentive based compensation for teach US an upgraded monthly strategy are beginning to pay off.
After introducing problem is that the rewards walbert teachers and it doesn't stop in September teachers are incredibly immediately and is expected to call the improves going forward.
Oh, Yes, my Raul.
Infield and significantly.
Hi, they motivated the teachers not able to offer a high higher quality teaching products.
Which is one key outside of that students and the parents are looking for.
It is acquired Florida, walkaway fertile Tony as well over 30% off the total new student enrollments acquired offline this water.
The increase the from the last quarter and a lot of awful lot here.
I firmly believe all these initiatives will translate into increased the new student enrollment in a higher retention rate going forward.
All selling and marketing side, we continue to evolve marketing dollars you are talking to the manner in light of the allocation of resources, a mall deeper into channels to ensure solid return on investment.
We managed to acquire close to 65% a whole lot Nielsen it isn't true offline channels is water by fully leveraging our offline learning Center network.
Higher contribution not student enrollments applied offline has effectively.
Driven somehow where Ah I wish you a student acquisition cost by more than 30%.
I believe this demonstrates how is that kids all by Millionish ships are.
The challenging economic and regulatory environment isn't affecting every all along and offline occasional player in the market.
We estimate the impact is that a dominant regulations would have all the business in at Paris reaction to the two eating installment payments early this year.
I'm very pleased with our ability to rapidly reaps the spot much of this challenges, which leads to such solid initial results and I believe that this week publicly the trends will tick stronger whos going forward.
I'm confident that all the athletic ability to execute.
Steve expert services and a focus on building this business with a lot wasn't wheel insurance sustainable growth.
We will have really look caller I'd like to Oh, I like to remind you that we completed the share buyback program a lot last November .
We repurchased approximately 1.2 million area in the open market and an average price up 8.6 $6 per AIDEA.
For an aggregate consideration of approximately $10 million.
We believe this demonstrates our continued confidence in the future of our business.
Over the years out the cash and we have accumulated all our strong balance sheet and a very in a way to return cash to shareholders.
We remain positive about our future growth and it will continue to focus on building this business over the long run another de lever long term value for our shareholders.
This concludes the remarks of our CEO Mr. seeding.
I'll now turn the call all but two all the COO and CFO Mr. can do to go over all the financial highlights.
Yesterday. Please go ahead.
Thank you lane.
Hello, everyone now I would like to go through our financial highlights for the thought caught up 2019 before I begin. Please note that all numbers stated a U R M B [noise].
Total revenues during the quarter increased by 18.4% year over year to 411.1, meaning.
Leaving primarily by a 20.2% you only increase in revenues from our educational programs to 333.3, meaning.
Increasing revenues from our educational Poland was primarily attributable to an increase in the number of students in Clos for our regular closings operated by self owned a learning centers and an increase in pricing for our regular calls him since the beginning of year too.
South and 19th.
The number of our self owned a learning centers increased to 87 as of September 13th 2019 from 17 as of September 13th of last year.
We added 200 on a five classrooms as of September 13th 2019, as compared to the same period of last year.
Franchise revenue increased by 27.4% year over year to 45.4, meaning dealing the quota.
Equally driven to an increase in the initial franchise fees and recurring franchise fees associated with an increase in the number of franchise franchised and learning centers from 273 as of September 13th 2018 to 364.
September 13th 2019.
Our revenues to for this quarter.
Other revenues for this quarter decreased by 5.8% year over year to 32.5 meeting [noise].
[noise] cost of revenues for this quarter increased the by 19.8% year over year to 196.3, meaning.
No gap.
Cost of revenues before the quota increased by 20.3% year over year 292.4, meaning.
The increase was primarily due to personnel costs associated with an increase in he joined headcount total teaching hours and teacher compensation at our self owned and learning centers and the increase in rental costs associated with the expansion of our operations.
Gross profit increased by 17.1% year over year to 214.9, meaning.
While gross margin was a 52.3 person as compared with 52.8% in the same period of last year [noise].
Setting in the marketing expenses for this quarter, what 83 points away, meaning an increase of 7.4% year over year from 77.5 meeting.
The increase is associated with a headcount increase and incentive based the pain ways of approximately 1.5 meeting for our marketing stuff.
non-GAAP selling and marketing expenses were 82, meaning.
Representing an increase of 7% year over here.
As a percentage of revenue non-GAAP , selling and marketing spend change when 19.9%.
220 basis points lower than that of the same peeling it over last year.
Selecting the success of our nation chains, and optimizing the allocation of our marketing resources.
Offline and online channels, so as to how the return on investment.
We'll continue to investing selling on the marketing to further expand our lucky share integral our student base.
<unk> expenses for this quarter was 65.8 meeting an increase of 13.7% year over year from 57.8 meeting the increase was mainly attributable to an increase in personnel costs associated with our expanding business.
Low gap and Shannay for this quarter was 61.8 meeting.
An increase of 10.5% year over here.
Other operating income was 65.8 media.
non-GAAP operating income was 74.9 million, representing an increase of 36.5%.
The heat.
non-GAAP operating margin was 18.2%.
2.4% higher than that of the same period of last year.
The significant improvement in our operating margin was resulting from an optimal use of our selling and marketing resources and go to control of our DNA costs.
Adjusted EBITDA for the third quarter was 88.9 million increase of 37.1% from 64.8 million in the same period over the last year.
Adjusted EBITDA margin improved to 21.6 months and 219.
Basis points higher than that of the same period of last year.
Income tax expense for the quarter was 24, meaning as compared with 17.3 meeting for the same period of the prior year.
Net income attributable to write it for the quarter was 39.4, meaning an increase of 19.7% year over year.
No GAAP net income attributable to rise was a 48.5, meaning an increase of 22.4% year over here.
No GAAP net margin attributable to rise was 11.8% for the quarter as compared with 11.4% or the same quarter last year.
Basic and diluted net income attributable to rise per 80 as for the quarter, well 0.7, and a zero point 69, respectively.
Basic and diluted and non-GAAP net income attributable to rise 80 S. Four zero point, AIDC and a general point 85, respectively.
Turning to our cash flow performance.
We generated 10 million positive cash flow from the operating activities dealing the quota.
As compared to wins [laughter] positive. He was 74.7 million for the same Peel Randall the prior year.
The decrease was mainly attributable to the change in the situation collection schedule mendieta by governmental regulations.
As of September as of September 13th 2019, the company had a combined cash cash equivalents restricted cash short term investments and along to our relating to party of 1039 point at 36.9, meaning as.
Compared with 1000 316.8, meaning as of December 31st 2018.
As of September 13th 2019, total deferred revenue and a cat customer advances were 800, and the 13 1.6 meeting a decrease of 20% from 1000 38.8, meaning as of December 31st 2018.
The decrease was primarily due to the change into Asian collection schedule.
[noise] now let me provide you with our 2019 called her full guidance.
On the fourth quarter of 2019, we expect our total revenues to be in the range.
410 million to 418 million, representing a year over year growth of approximately 16% to 18%.
This estimate it takes into consideration of the impact of our full compliance at least irrelevant governmental regulations mandating that cancellation of food they call. It seems in Beijing, and the three mile situation payments insane acting to seating.
We expect to the impact to be temporal and it will not affect our long term girls prospects.
This forecast reflects our current and preliminary view on the market and the operational conditions, which are subject to change.
This concludes my prepared remarks, operator, we would like to open up the call for questions.
From the for those of who would like to also question. Please state your question in Chinese first and then in English.
Operator. Please proceed.
Definitely ladies and gentlemen, well they'll begin the question answer session. If you wish to ask questions. Please press star one on your telephone and wait for you need to be and they'll just if you wish to cancel your request. Please press the pound or heskey.
There might be a slight delay us weekly the information. Thank you.
Again, if you have questions. Please press star one on your telephone and wait for you need to be a village.
Your next question I'm sorry, your first question I mean news from Alex <unk> from Credit Suisse. Your line is open.
Thank you management for taking my questions.
So oh, you have two questions firstly.
I know two steps.
Our guidance for the fourth quarter revenue.
To refresh it was a little bit.
Lower than than my previous forecast and I think its showed the.
Yeah. It indicates of a slow down even from this quarter I would like to know.
Whether this is the or impact of.
No dilution and Awardees.
Outlook going forward we.
Oh, we still expect can save over 20%.
Rick recovering to over 20% in future.
And secondly, I notice that in this quarter, we have quite some meaningful operating leverage in terms of opex, so selling marketing expenses.
And what it does show.
The reason for that and.
Trend will focus on acquisition cost.
Thank you.
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Oh, Thank you, Alex and I will translate into obviously I'm. So sorry for the first one question Oh, the macroeconomic on means Oh, that's on the on I think the impact into the whole pushing hard occasion Oh market.
Oh, sorry, I thought we firmly believe that.
Ah Ah regulations will benefit to a whole or junior English it learning package and.
In the long term and I'd be remiss in their pocket table, but the initial term.
Both men to offer a regulations such as a function schedule.
The restriction.
After a three month.
You should payment Oh policy and generators.
After all of our business, which is.
Higher that plantation at the beginning the year Oh for example in Beijing, we are required to coal from golf, who they forces and although dog food a coffee.
At the same time the family Oh.
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Ladies and then Tim.
Okay, so such as the holiday cropping up but due to the stop due to we saw offering those who they classes.
Anymore or more of the replacement to also awfully classes Oh, we.
Oh, the actual revenue a oh I forgot how many were reduced by approximately a 20 meeting.
<unk> and Oh, so oh in Beijing.
<unk>.
According to look on your comment or they are we really change our passion schedule from December 2018, and Oh refund rage, and and Oh. The response rate is higher now over or expectation and retain the rollover rate the isn't lower now.
Starting with is mutation which lead to.
Ah deploying all or a reduction of our actual revenue of approximately certainly made in oh down our analog engine.
We gradually Oh, we and the impact of all those regulations.
Gradually all show positive about the company.
I totally Oh launched a lot of a initiatives being older to cope with no situation and we try harder to improve the retention agent.
The detail on National includes Oh, so try so we.
Hi tool shortening the waiting period of for the students Oh before the Oklahoma Plaza.
In order to reduce the refund rages also we leverage our in house give off of the all my Takahama Pos to Jasmine.
Oh communication with our parents.
Due to a really.
In order to Oh.
Her to south of.
Oh God. He also Oh parents also to better health apparent to and Oh students it to get through the separation anxiety in the in the first just very mountain.
Oh, the second to Ah Ah.
You may already heard that if I'm organizations. They are some discussion organizations. These are markets in run off of the money and the stock all stock operation they'll seizures agenda reduce on negative impact to up to the purchase decision at the parent.
Third and we tried to some probably be tight or are we try to offer a separate to.
Oh sure online products on time talking to one or a one year operationally.
Oh, absolutely Manosalva parents.
It's not.
Hi athletes not to.
As a result of the structurally decided to skilled all other stand alone. These a a separately owned this update running a business im leaving a skilled on the investment gem and reinforce our original reinforces the in integration of our current Oh.
Courses, the and Oh my offering.
Based on data this change all the strategy.
The real benefit to our real benefit to ahlberg able to maintain the long term multi English all told me to reduce all were all in this year. If you will solve our online revenue by approximately five meeting them indeed.
So oh and also in Hong Kong, the Hong Kong situation also all cost Oh expected revenue decreased by approximately a five minute and maybe it's all of those reasons the cost Oh.
So lower than expected Oh by the new Ah Robinson.
All right or the guidance.
Just help you.
Okay, and then me, Ontario second question, Oh, DNA and also.
Selling and marketing expenses and again.
Well there they're happy to see that at any she sees the we launched the early in the year with regard to marketing and sales I'm starting to show very very positive outcomes, what do we have down.
It is to try to leverage make back you sell <unk> offline on learning center, and a network or try to acquire a more students from offline than the more expensive channel online.
I can show with Union statistics are already in the here acquisition from offline and account for approximately 60% of our total student enrollment as all third quarter, we managed to increase the offline and using the acquisition to close to 65%.
And we'll continue the efforts in this regard.
At the same time, when we launch all were right. Pos platform. We have helped to increase on the communications weeks apparent and at that helps to improve the parents and satisfaction and I don't want a massively faros and when she is even a cheaper way I'm acquiring student start here.
No.
Contribute to more of our total offline student.
Acquisitions, roughly close to 30% of our offline on a student enrollments are actually problem and word of mouth.
Parents referrals. So it's also.
Oh, good proof of our increase or improvement in our services to the parents and also on reflection of the parents and satisfaction with the overall and teaching quality.
The other thing would have focus how easy to improve the conversion rate I'm very happy to tell you that on the film called out conversion rain overall has increased the by more than 70%.
Disease, the resolved at all and Ah overall package to offer to our sales is selling stuff one we actually increase.
Yeah. The salary starting from June also we have restructure the incentive structure on that better motivate.
And of course consultants the end of the cells people.
To do a better job a surgeon, we actually increase the other frequency of training to make sure that had they actually understand our product and on the food and learn to present an hour.
Our teaching philosophies and also our product in a better way to our perspective.
Okay.
Vaccines.
Talent, a horse and throw out to all those initiative and we see a our sales team actually become more stable and.
The churn rate chopped up pretty dramatic.
Hill will continue the African seeing all the areas I have just a explain to you and we are pretty confident that is sending out of marketing spend sees a won't be.
Battery better used to maximize optimal outcome.
Overall, we will continue to investing in selling on the marketing the paparazzis too for the increase our student team enrollment and for the increase I'm Lucky share as well as a student to phase.
With regard to the DNA, we are very cautious in managing our.
<unk> expenses.
You can see as a percentage of revenue each remains a pretty stable as compared to the same period of last year Hilmoe. Other cautions beginning on the headcount increase unfolded, the mistreating stuff and try to manage.
Keith you know the expenses.
With regard to DNA.
Flat so as to improvement continue to improve our margin.
We're continuing to African that'd be bar.
[noise] Robert Thank you very much.
Your next question is from Salix you from you'd be yes. Your line is open. Please go ahead.
Hey, it's all house alone. These all clearly made conceal what mandates that change or Jay, though until maybe the merger or what Daniel Youre sung or some real quick question question Mike.
You go without follow up you sound like a GLAIC clay margin the ones here a woman.
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Yes.
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Let me translate myself. My first question is all as a follow up on the margin. So was the this is the good cost control in third quarter is there any update to our full year and EBITDAR margin targets. A second question is on the tax rate I think the we paid around 40.
Personnel power pretax.
Income.
Tax, which is a higher than last year and a lot higher than the peers might.
I know any particular reason behind this and the my third question.
His on the share based compensation, which increased.
As a percentage of revenue a may I know any particular reasons behind this and how should we fourq had this going forward. Thank you.
[noise] [noise], Thank you Phoenix and let me I'll answer the question is.
Arjun for the full year, we expect it will remain the same as we.
We shared with them arcade early this year.
I will remain unchanged Oh, the tax rate.
Currently we are seeing a whole the income tax.
You'll pay 25% income tax we are trying to get them on a.
Hi, technology, Oh preferential tax treatment a effort is still ongoing immco Wes.
So we don't have definitely the deadline when the government a world class and sat down approval.
So with and working hard title Okay.
Approval from the government on the tax treatment.
On the other reasons of hall, or higher and effective tax rate because because of the different tax rate restriction and that actually increased our.
Tax rate combined one person this year.
At this point at this years this year.
And also because of.
Outside of bases difference among investment in sight.
This is quite a technical so well, we actually make a payment into Hong Kong, we need to actually we hold on the tax and also we need to.
We hold on the dividends, even though we don't pay dividend always do you need to on with home on the given in Texas. So all these combined.
Increased our effective tax rate for this year.
So I think that but that's my explanation for the tax rate Oh, a share based that.
Surveys the compensation. This year is relatively higher compared to last year is because in April would have actually launched on the the second part of our.
Stock option.
Hold on a two hour in management as well as the key employees on so once its launched the power to all the options become immediately blasting opt in April the first so that's actually.
Has a pretty significant impact on our on expenses actually in the second quarter third quarter it becomes the normalized.
If you need to you know I think starting from.
If we normalize on the SBC expenses.
Going forward to all projecting for next year or roughly.
Roughly based on the current you know for both my space and as well as no.
Years of working experience based on.
Option vesting schedule, we would estimate of on each quarter, so probably on four to 5 million.
I I see actually thank you see cities all thank you for the very detailed out there.
Your next question is from Alex Xu from China really since your line is open.
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Let me translate obviously all the answer for you well, though.
Oh, we.
Kinda talk is all were all in one on one or service.
As a stand alone of is Oh, we started to test is oh on call taxes from and all but 2017. So right now is over one year when years' time. They saw one observation. This crop is they've turkey to aged 48 sixes.
Students are well the students at that age they pay much attention to the personal touch are less likely I mentioned that and nothing kind replaces the teachers ability to engage with the students are directly in the classroom.
Oh.
Well this oh sudden upwards and [laughter].
Only.
The pure online courses is not to watch Oh, Oh, it's now to.
The what the most Oh, we won't know stuff so problem.
They grow older Oh gosh, we can offer more online oh, they will take more on enforces them also a if you look had to the online competitors that the on like a attic annotation organization.
In the market Oh, I think I'm also over there or for students are above 87, so oh, where students. It does now to overlap of is the most all of those though online Oh players and [noise].
[laughter] second Oh, if they look at the.
Economic solve these [noise].
Oh, it's one on business and we use of foreign teachers, Oh, So oh.
Even even though they don't have done a lot of Ah student acquisition cost of because we don't open this product to two dogs students on how to rise to the do it.
It's very difficult to shoot a make profit.
From this point of view, all we probably will not all her days in though Oh long term and or those that reason is oh, we mentioned that we have a a long term strategy that has to integrate our current oh product to our.
Our existing products it is.
With the all in all right well, we have been quite hard awful long fine so going forward to maybe half or more something then to online offering into our existing sauces led to the keys to do exercises.
Ah their home offered plot and Oh for example, we are testing.
My allergy and all I smoke.
Using a native English teacher online Oh, right now in some selected a learning centers.
And Ah Ah I think is the most or all while they decide oh well the direction or to go. The most important thing is that the men the actual demand of our parents their feedback.
There are experiencing.
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Next question please.
Your next question is from John going from Citic Securities. Your line is open.
Well. This is why do you probably know what kudos on then gives you do the let's use the Lucy Lu who will be.
And the go to do nothing and that's what's your thoughts you could go deep well listen I'm not that you would you say Oh excuse me and eat all but one completed a really good that you do the gets you there due to the MACOM, though.
Oh, So kupol, taking my question I know Thats a good can you take your good it's much lower than the past several quarters Oh group. Please explain through the and Oh, we do hope goodness frozen next quarter.
Oh.
Yeah.
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So I'm sure they'll have to go when people see how would your though to the high. So you could use ocean wouldn't be you didn't women's won't be subject with high pressure Youre dot p. dauman, but to a sudden she is hopefully the vehicle by Moodys, England.
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We're going to hold them or not.
Well you know how long does yoshihashi books from two of the she said that you thought contingent in total I like the hurdle will reach and budgeting should or shouldn't just hold attrition villagers, though I've asked for John .
With.
Hi, I'm going to your first question. Let me just agency also answer to you Oh, the Oh, Oh first let me Oh, it's Linda Richardson due to Oh, no 606, and 9% Oh, we uses a a retention.
How probably I calculate this retention HIV, either so none of us students Oh.
Ah registered for the next quarter or the why did it by the and about students who completed his or her until courses.
Got the retention rate Oh, the impact or the reason why we have a wider retention rate a little bit alone or in this quarter.
Is.
I think is primarily due to though I regulation impact in Beijing, because the Beijing contribute to a material sitting Romans Ah Ah Ah Ah E Oliver business, Oh, and Beijing, Adelphi, the new television production schedule from December .
2018, after Oh, we adopted a new Ah Ah Ah clutches Guy do Oh, Oh, what those people you know where teachers have a very limited time to prepare for the renewal and Oh retention of the students are after each oh session.
Before we have Oh before Oh parties all of a standard of course.
I'm also want to spend most of my right now as you know so we have to Ah get prepared to Florida, all rolled over Ah. So it isn't really a challenger fall off all rest asked a in the learning centers and.
And Oh, because they just don't adopt it isn't a new oh schedule, if and although 2018, so much euro Oh, we can see material or sooner agent retention from Ah, that's not corner or is there or maybe just to see material or retention.
In the so called her gradually where they have a more accurate number.
I know, we already see a turnover oh, we already see a very positive agenda and our retention on the rollover rate said, so internally, where oh tracking closely I know, we are finding any opportunity to further improve or a vacation you know roll over in Beijing.
I'll be or we remember it's all the case, Oh, there's oh retention rate going forward.
Well. This is one is home.
Oh later on.
We have little more question Uh huh.
We don't have any other questions just of the movement.
Oh the weekend Oh.
HM we can conclude.
Ladies and gentlemen that does conclude our coal for today. Thank you for participating you may all disconnect.