Q4 2023 QuantaSing Group Ltd Earnings Call
Speaker 1: I.
Speaker 2: Good morning and good evening ladies and gentlemen. Thank you for standing by and welcome to Qantas Singh's earnings conference call. At this time all participants are in listen-only mode.
Speaker 2: We will be hosting a question and answer session after management's prepared remarks. Please note that today's event is being recorded.
Speaker 2: I now turn the conference over to Ms. Leah Guo, Investor Relations Associate Director of the company. Please go ahead, ma'am. I'm going to turn it over to Ms. Leah Guo.
Speaker 3: One more thing...
Speaker 4: Thank you.
Speaker 3: Hello everyone and welcome to Qantas in earnings call for the fourth quarter and fiscal year 2023. With us today are Mr. Peng Lee, our founder, chairman and CEO and Mr. Tim Hsieh, our CFO . Mr. Lee will give a general business overview for the quarter. Then Tim will discuss the financials in more detail. Following their prepared remarks, Mr. Lee and Tim will be available for the Q&A session. I will translate for Mr. Lee. You can refer to our full fiscal quarter financial results on our IR website at ir.quantasin.com. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call.
Speaker 3: as we will be making forward-looking statements. Please note that all numbers stated in the following management prepared remarks are in RMB terms, and we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in our earnings release and filings with the FCC. I will now turn the call over to the CEO and founder of QuantumSync, Mr. Li.
Speaker 5: Okay, hello everyone and thank you all for joining us today. Despite the challenges presented by the current state of China's economy, we found ourselves well placed to benefit from new opportunities in the adult learning market. Well, the fourth quarter of our fiscal year is really a period of moderation.
Speaker 5: We counted an impressive 31.7% year-over-year growth in revenue from the same period last year. Additionally, our adjusted net margin has improved significantly, reaching 10.9% compared to 0.7% during the same period last fiscal year.
Speaker 5: Our success has fueled by our robust pipeline visibility, diverse revenue streams and effective strategy approach.
Speaker 5: I would now like to reflect on our recent success and broader performance and share some operational updates.
Speaker 5: As of June 30, 2023, we had around 94.3 million registered users.
Speaker 5: We are presenting a significant increase of 60.6% compared to the previous year. The number of paying learners rose as well, increasing by 29.9% compared to the previous year.
Speaker 5: Our focus on flexible and scalable business models has allowed us to quickly add more topics.
Speaker 5: This in turn attracts more users and fosters constant growth.
Speaker 5: We offer a diverse array of copies.
Speaker 5: each thoughtfully tailored to our distinct customer group.
Speaker 5: For instance, for our financial literacy content, we offer accessible courses that guide beginners through topics such as asset management and achieving stable returns.
Speaker 5: Our learners can further explore financial life to causes like financial analysis and family asset allocation.
Speaker 6: the
Speaker 5: That is the update and enhance our causes to align with shifts in industry policies.
Speaker 5: This ensures our learners have access to the most up-to-date marketing insights.
Speaker 5: Our focus on improvement has led to better customer experience.
Speaker 5: Thanks to our operational enhancement.
Speaker 5: Our user survey shows that our financial literacy costs
Speaker 5: completion rate now that's at an impressive time attending academics MOOC Native American University capstone chapter in tuition and
Speaker 5: Thank you. That's so important.
Speaker 5: We are constantly updating our intelligence and learning tools to act as learning companion for our users.
Speaker 5: These tools use engaging AI interactions to assist the user in putting key financial metrics from financial statements.
Speaker 5: during the source culture.
Speaker 5: We once again authorized the financial literacy white book with industry experts and authorized her to organize in China.
Speaker 5: This was our third great year doing so.
Speaker 5: So buy a book.
Speaker 5: The financial literacy of Chinese residents across various demographics.
Speaker 5: This research shows as a scattering light for the institution.
Speaker 5: taking to expand financial learning across the nation.
Speaker 5: Our participation reflects our solid standing in the realm of financial literacy.
Speaker 5: We take immense pride in our contribution and are eager to help enhance financial literacy levels within society.
Speaker 5: Beyond our financial literacy efforts,
Speaker 5: We have also taken steps to boost the user engagement and enhance our online call repurchase reach.
Speaker 5: during the thought quarter.
Speaker 5: we organized a series of offline computations.
Speaker 5: while that event was a
Speaker 5: telegraphy competition pocketed at a senior adult.
Speaker 5: participants applied what they learned from our courses.
Speaker 5: Showing showcasing their learning outcome.
Speaker 5: while enjoying face-to-face interactions with fellow learners.
Speaker 5: The participants created around 400 category work during the competition. To determine winner, we engage our broader community in the voting process.
Speaker 5: This type of offline event motivates learners to stick with their studies.
Speaker 5: It also encourages them to invite friends to join our caucus
Speaker 5: We believe that this offline competition helps foster a type-9 sense of community among our learners.
Speaker 5: We see them as both a means of promoting caucus and as a way to build community.
Speaker 5: as a part of our growth strategy.
Speaker 5: We are eager to bring our customers new opportunities for learning.
Speaker 5: One core part of this strategy is the creation of new personal interest copies.
Speaker 5: These courses are carefully designed to meet a diverse range of interests and tap into unrealized market potential.
Speaker 5: They help to enhance our appeal and boost engagement level.
Speaker 5: Furthermore, the repeat purchase rate for other personal interest courses has risen to 18%.
Speaker 5: By refining our cost offerings, we enable learners to complete an in-depth learning circle on our platform.
Speaker 5: or instance.
Speaker 5: in our short video production course.
Speaker 5: We guide learners through the entire creation process.
Speaker 5: This encompasses subject selection.
Speaker 5: clip editing, content creation, and even using short videos to promote products on the live-streaming platform.
Speaker 5: In a similar way, we have fine-tuned the contents of our memory corpus to be more practical and more practical.
Speaker 5: instead of the orange color.
Speaker 5: This empowers learners to apply their knowledge in real-life situations.
Speaker 5: This leads to a more fulfilling learning experience.
Speaker 7: Be well.
Speaker 5: Our drugstore market remains expensive.
Speaker 5: As outlined in the Sullivan Industry Report on the Adult Learning Market in China released on September 6, 2023.
Speaker 5: The Frost and Sullivan report affirmed the significant market demand for senior citizen education.
Speaker 5: According to the report, the size of the senior adult learning market, as measured by revenue, is expected to reach RMB 120.9 billion by 2027.
Speaker 5: This estimate assumes CAGR of 34% from 2022 to 2027.
Speaker 5: We are well positioned to cater to this demographic.
Speaker 5: Many of our thoughtfully designed copies address the specific
Speaker 5: needs and interests of senior learners.
Speaker 5: As always, we remain committed to creating inclusive and accessible learning opportunities for people of all ages.
Speaker 5: Our causes aimed at senior citizens.
Speaker 5: specially crafted to bring them valuable knowledge and skills.
Speaker 5: This helps provide a sense of enrichment and foster a feeling of continued growth and success.
Speaker 5: We are actively building new corporates that cater to the interests of older learners. For example,
Speaker 5: We have developed a course on standing mediation.
Speaker 5: a traditional practice that combines
Speaker 5: fitness, strength, and inner peace.
Speaker 5: our program.
Speaker 5: a holistic approach.
Speaker 5: boosting meridian flow, vital energy, and overall physical resilience.
Speaker 5: This cost has proven to be a mega hit.
Speaker 5: It had accrued over 1.4 million registered users as of August .
Speaker 5: 31, 2023.
Speaker 5: And its monthly growth building reached around RMB 17 million.
Speaker 5: As a company that relies itself on innovation, we are dedicated to enhancing our core business while exploring new opportunities for growth.
Speaker 5: We are excited to announce the launch of Dynamics new business initiative.
Speaker 5: live the e-commerce.
Speaker 5: with a strategic focus on the Chinese liquor market.
Speaker 5: Our decision to venture into fast e-commerce is rooted in a multi-faceted vision.
Speaker 5: This new business requires minimal investment.
Speaker 5: capital investment with little operation risk.
Speaker 5: while also acting as a result to further
Speaker 5: foster our co-op business.
Speaker 5: We chose Chinese liquor as our entry point to the live e-commerce business.
Speaker 5: Chinese liquor holds an important place in Chinese society.
Speaker 5: Especially, when it comes to social interaction.
Speaker 5: Our target demographic is made up of individuals that are middle-aged and older.
Speaker 5: This demographic demonstrates.
Speaker 5: Robust demand for Chinese liquor.
Speaker 5: It is a post-colon error.
Speaker 5: Online shopping has become increasingly common, and that trend extends to the purchase of Chinese liquor.
Speaker 5: As the forefront of online shopping today, it's.
Speaker 5: live-streaming e-commerce.
Speaker 5: on one of the live streaming platforms.
Speaker 5: we operate on. There are over 300 million users with an interest in Chinese liquor.
Speaker 8: I
Speaker 5: indicated by a research report.
Speaker 5: This platform fosters experiences.
Speaker 5: action to one testing event.
Speaker 5: Allow your users to share their insights about Chinese liquor through live streaming.
Speaker 5: Recognizing this market opportunity, we aim to provide our users with all-in-one experience that can advance goods and services into a single platform.
Speaker 5: Our learning business model is also very mature.
Speaker 5: This is shown by our effective extensions of our Chenshan and Jiangzheng brands.
Speaker 5: which follows by the success of our older Chinoo brand.
Speaker 5: We invest in traffic at the front end, which is then converted into our private social media group.
Speaker 5: Through years of operation, we have built up substantial user insights.
Speaker 5: This allows us to effectively locate and acquire customers.
Speaker 5: We also have a well development, well developed,
Speaker 5: array of vaccines too.
Speaker 5: This allows us to lock in traffic, locate loyal customers, and convert registered users to pay in Linux.
Speaker 5: By leveraging our experience in the adult learning business,
Speaker 5: We are now acquiring customers for our live e-commerce business in the same way.
Speaker 5: This replicable approach gives us control over our costs and our end.
Speaker 5: even during the early stages of a new business.
Speaker 5: He is launching the new business in June 2023.
Speaker 5: We have been very pleased with the operation result.
Speaker 5: We have generated RMB
Speaker 5: 13.3 million in GMV during August .
Speaker 5: While we expect a slight adjustment in our gross margin, we are confident that this new initial will have a positive impact on our net margin and strengthen our financial resilience.
Speaker 5: Well, we mentioned our revenue growth.
Speaker 5: We continue to improve our operation efficiency and extend our positive cash flow.
Speaker 5: Tim will explain our financial results in more detail later.
Speaker 5: We are leveraging AI to help improve our operating efficiency.
Speaker 5: For example...
Speaker 5: We are using AI-powered intelligent voice messages to demand learners to join our content.
Speaker 5: AI-generated content or AIGC.
Speaker 5: have also empowered us to provide a better, more efficient experience when learners post questions.
Speaker 5: A lot of questions are categories.
Speaker 5: and draft answers are generated automatically. Tutors simply need to double-check the answers before sending them out.
Speaker 5: This has largely reduced the tutor workload during classes.
Speaker 5: and improve learners' experience without sacrificing factual accuracy.
Speaker 5: Regarding content development.
Speaker 5: We are implementing a 4-in-1 interface that combines transcripts, videos, presentations like chats and calls with buttons.
Speaker 5: At the same time, we also embraced the template-driven bulk generation of short videos.
Speaker 5: The infographics are the most.
Speaker 5: This has greatly enhanced our content development efficiency.
Speaker 5: Thank you very much.
Speaker 5: despite the present state of the macro.
Speaker 5: We continue to refine our operations to meet persistent demands from individuals seeking an improved quality of life and overall well-being.
Speaker 5: At the same time, we are strengthening our position as a reliable partner in China.
Speaker 5: co-operate learning and development.
Speaker 5: Our ability to innovate and explore new ideas has generated outstanding outcomes for our business.
Speaker 5: Despite seasonal loss, we generated robust year-over-year top-line growth.
Speaker 5: and our operational focus remains solid.
Speaker 5: with strong pipeline visibility.
Speaker 5: We made the decision to just quickly expand into live e-commerce.
Speaker 5: This will allow us to leverage our existing strengths to enhance profitability.
Speaker 5: as we navigate the ever-changing dynamics of the market.
Speaker 5: we are confident in our ability to generate sustainable.
Speaker 5: long-term growth and its success.
Speaker 5: We are grateful for the continued trust and partnership of our shareholders.
Speaker 5: With that, I will turn the call over to Tim to discuss the details of our financial. Thank you all.
Speaker 9: Thank you.
Speaker 5: Before I go into details of our financial results, please note that all amounts are in RMB terms.
Speaker 5: That's the reporting period with the fourth quarter of fiscal year 2023, ended on June 30, 2023. And that in addition to GAAP measures , we'll also be discussing non- GAAP measures to provide a greater clarity on the trends in our actual operations. For the fourth quarter of fiscal year 2023, we grew our total revenues by 31.7% year-over-year and 2.6% quarter-over-quarter.
Speaker 5: to 828.3 meetings mainly driven by the growth from other personal interest courses.
Speaker 5: Among our revenues, revenues from individual online learning services grew by 25.2% year-over-year to 721.1 million or 87.1% of total revenues, mainly due to continued demand for other personal interest courses.
Speaker 5: Our growth billions of individual online learning services increased by 23% year-over-year to 748.8 million.
Speaker 5: Revenues from enterprise services increased by 102% year-over-year to 103.8 million or 12.5% of total revenue.
Speaker 5: primarily driven by continued robust demand from both existing and new enterprise customers for marketing clarity.
Speaker 5: Gross profit was $712.2 million representing a gross margin of 86% compared to 82.9% in the same period last year. True operating expenses decreased to $664.7 million from $6.8 million to $6.8 million
Speaker 5: 726.7 million last year. To break this down, sales and marketing expenses were 573 million.
Speaker 5: representing a change of 7.8% year-over-year as we adjusted our staffing budget and increased spending on marketing and promotion promotional activities for other personal interest courses.
Speaker 5: As a percentage of total revenue, non-cap sales and marketing expenses, which include share-based compensation, decreased to 67.8% from 75.1% a year ago.
Speaker 5: Research and development expenses were 53.6, representing a decrease of 59.6% year-over-year.
Speaker 5: primarily driven by a decrease in share-based compensation.
Speaker 5: and the percentage of total revenue, non-GAAP R&D expenses, which excluded share-based compensation.
Speaker 5: decreased to 5.5% from 6% a year ago.
Speaker 5: general and administrative expenses were 38 million, representing a decrease of 39.3 percent year over year.
Speaker 5: primarily due to decreases in share-based compensation.
Speaker 5: As a percentage of total revenue, non-GAAP G&A expenses, which excluded share-based compensation, decreased to 3.2% from 4.6% a year ago.
Speaker 5: Net income was $52.7 million, including share-based compensation. Adjusted net income was $90.4 million, representing an adjusted net margin of 10.9% during the quarter. Net income was $2.9 million, representing an adjusted net margin of $2.9 million, representing
Speaker 5: Basic and diluted net income per share for RMB 0.31 and RMB 0.30.
Speaker 5: respectively during the quarter. Adjust its basic and diluted net income per share for RMB 0.34 and RMB 0.52 respectively during the quarter. Turning to our balance sheet, as of June 30, 2023 our company held 930.6 million in cash and cash equivalents and short-term investments compared to 399.1 million as of June 30, 2022.
Speaker 5: Lastly, I want to provide some color on our log box look. For the fourth quarter of fiscal year 2024, which ends on June 30, 2024, we expect revenues to be between $780 million in 2004 compared to this year's total capital Continental):
Speaker 5: 810 million, representing a year-over-year increase of between 18.3% and 22.8%. This projection takes into consideration the current market conditions prevailing in the industry.
Speaker 5: We remain committed to providing high quality, personalized online learning services and offering a diverse range of courses.
Speaker 5: At the same time, exploring new business opportunities to improve our profitability. These initiatives helped drive our strong performance in the fourth quarter of fiscal year 2023. Moving forward, we will be utilizing AI to optimize our cost structure and expenses, enabling us to operate more efficiently and effectively.
Speaker 5: is our strong financial position and diversifies revenue streams. We are well equipped to overcome any challenges that may arise and capitalize on growth opportunities.
Speaker 5: while continuing to generate value for our customers and shareholders.
Speaker 5: That concludes my prepared remarks. Operator, let's open up the call for questions. Thank you.
Speaker 2: Yes, thank you. We will now begin the question and answer session.
Speaker 2: To ask a question, you may press star then 1 on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker 2: To withdraw your question, please press Start and 2.
Speaker 2: When asking a question in Chinese, please translate your question to English for the convenience of everyone on the call. Please ask one question at a time. At this time we will pause momentarily to assemble the roster.
Speaker 2: And today's first question comes from Tai Ni Wang with CICC.
Speaker 3: Good evening, management. I have two questions here. Firstly, given the recent relatively soft capital market, how should we expect the next year growth of Xinyu in terms of the number of users as well as the ASP? Secondly, could you please elaborate our growth strategy on the brand new live streaming business? Thank you.
Speaker 5: Thank you. In terms of the financial literacy courses,
Speaker 5: And it is market chain and also our performance. I think you asked a good question.
Speaker 5: First, I think for this, in terms of segmentation, let me clarify. I think for our financial literacy courses, we treat it as part of one of the categories of our total revenue.
Speaker 5: So for this kind of revenue, our management reviews our consolidated results by making decisions about
Speaker 5: resource allocation, and when assessing the group performance. As such, the group has only one reportable segment.
Speaker 5: Also, in terms of the future outlook for our financial literacy courses, it is possible that we will see year-over-year decrease in the financial literacy courses.
Speaker 5: absolute dollar amount this January . This is in line with our strategy of developing a broad range of courses which are due to learners with diverse interests and backgrounds. In addition, we have taken proactive steps to identify users with...
Speaker 5: low return over investment which is our eye to ensure sustainable growth for our company as a whole. Doing so means we can utilize our resources more efficiently and ensure that our cost offerings get the attention of users. Could we be generating...
Speaker 5: The interest rate unfu macro environment now on the macro emission that in the macro environment may tract to company's revenue course I think let me driveify that our core customer places is made up of.
Speaker 5: the most public consumers. Demand for our financial literacy courses does not rely on professional investors. As such, the performance of our financial literacy courses is not tied to the financial literacy courses.
Speaker 5: performance of the capital market directly. Second, I think it's important to note that the content of our financial literacy program covers a wide range of topics not limited to the stock market. Even if the market...
Speaker 5: and perform or maybe have some fluctuation. The idea of investing temporarily loses appeal. Customers will be able to leverage our courses to gain knowledge in other areas of financial literacy. To this point we have not observed a direct correlation between the stock market and the growth of the registered users for our financial literacy courses.
Speaker 5: I think the key is to use our business methodology to treat our revenue as a whole, and to see the market opportunity, and to do our business based on our eye, and also the revenue diversification strategy.
Speaker 5: Meanwhile, I think our average revenue per user, or upper, has maintained a steady upward trend. This is due to our focus on delivering high-quality courses and value-added services. This reflects our company's core ability to attract new users and to provide value-added services that existing users appreciate.
Speaker 5: So, I hope that answers your question.
Speaker 4: That's very clear. Thank you.
Speaker 2: Okay. Thank you. And the next question comes from...
Speaker 2: Yes, thank you. Next question comes from Steve Silver with Argus Research.
Speaker 10: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried by National Financial Services LLC. Member NYSE & SIPC, a Fidelity Investments company. His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered at www.profile-financial.com. Disclaimer! While it is believed to be current and accurate, divergence from the original is to be expected. The original podcast can be heard at https://sites.google.com or on record. All information on this website is purely information and should not be used as the sole basis for making financial decisions. To determine which investment options are appropriate for you to consider, consult your financial advisor prior to investing. Please see the complete disclaimer at https://sites.google.com or on our website at www.profile-financial.com. Thank you for your time.
Speaker 10: taking my question. In the commentary you mentioned the minimal capital required to launch some of the new growth opportunities like e-commerce. I'm curious as to with that and the continued build out of the technology platform, I'm wondering if there are any other areas of higher capital that are expected over the next few years or whether we should expect the company to be able to balance these investments with its growth and continue to grow cash flows and adjusted net income consistently from current levels. Thanks for the question. In terms of the new initiative of the e-commerce, I think
Speaker 5: for the capital investment and also maybe the cash need of the business. I think first, all of the...
Speaker 5: The new initiatives are based on our current key capability, including our accumulated operating expenses in the –
Speaker 5: The new initiatives are based on our current key capability, including our accumulated operating expenses in the – in the –
Speaker 5: online operating cost, live streaming, sales process, and also the technology base we have built.
Speaker 5: We have built for our current platform and also we can use and leverage the current experiences and systems.
Speaker 5: to do the live streaming because we currently sell the online courses and serve the customers through the whole online process very smoothly and gaining a very effective result. And based on this infrastructure, we can leverage all of the resources to do our live e-commerce business. So this has also proved that because you see the August number, this proved a preliminary success.
Speaker 5: In terms of the future development, I think when they do the e-commerce, they may purchase some stocks, but for the Chinese liquor, the stock turnover is very fast, and also the
Speaker 5: We collect the cash because our customers, the individuals, we collect cash very quickly. And also, I think, overall speaking, the cash flow, the operating cash flow, straight,
It's not a big problem and also we anticipate maybe a very similar cash pattern, cash generating pattern as that of our current business.
In terms of the technology investment, I think based on our live streaming system which we have developed ourselves three years ago and improved continuously in these years, it provided us a very solid base to do the live e-commerce business. There may be some slight improvement in terms of the specific business needs and systems to implement which do not need a huge capital investment to the technology.
In a sum, I think first, we can leverage our current experiences, systems, and also the technology, and second, we see the live-streaming e-commerce business, its business model is very similar to that the country doing for the online courses selling business. We sell the courses, and also we sell the goods, the Chinese liquor, through live-streaming business model, which is very similar. And also, the...
The last point is that all of the, both the online courses and online learning business through live streaming and also the online e-commerce live streaming business has to generate maybe very similar financial results in the business model. I think this is my answer. I think that's the way we have to understand the business. Okay. Thank you very much. That's very helpful. And thanks for taking the question.
point is that all of the online courses and online learning business through live streaming and also the online e-commerce live streaming business has to generate maybe very similar financial results in the business model. I think this is my answer. I think that we have to understand the business. Thank you very much. It's very helpful. Thanks for taking the question. Thank you.
Thank you. And the next question comes from Howard Halpern with Teglitz Brothers. Congratulations on the quarter guys. If you could dive maybe a little bit more into the new e-commerce platform, could you describe I guess maybe the mechanics of it? Are you...
Are you just connecting merchants with your customer base and collecting a fee or is there more to it than that?
Yeah, I think, thanks for the question, also, in relation to our new initiatives for the live streaming. Our, basically, our current business model is to acquire our learners through live streaming, through the free courses, and then some of the learners will convert to our paid learners. And basically, the business model for the live streaming e-commerce is very similar to that.
We launched our live streaming room online to...
advertise and to attract the traffic to our live streaming room and they sell the Chinese liquor to the to the audience.
And we have several business models. One is we purchase the Chinese liquor from the supplier, and then we will leverage our live streaming capability and our user base to sell that kind of product, the Chinese liquor, to the customers. Some of the customers are our current users and maybe some customers who have learned our courses and who have learned our free courses. And a majority of that may be from...
the new traffic, the new audience, and also the new demographic from each source, especially the short-view social platforms such as Douyin and Kuaishou.
And also, we have some other business model, maybe we will act as a, because of our capability for the live streaming, we will act as an agent to have some brands to sell their products initially. And eventually, maybe I think in the long run, we can.
Because of our capability to sell, especially sell the Chinese liquor through live streaming is very important. I think our capability can leverage all of our resources to secure the best goods, the best Chinese liquor, the supply chain to our current and future customer base.
Okay, that was very helpful. One final
go international, beyond China, and how would that process unfold?
Yeah, thank you, that's a good question. We have placed our strategy to seek opportunities both domestically and overseas. And we've been keeping a close eye on the growth of the international learning market for contact. A report by Global Market Insights estimated the global e-learning market to be valued at $1.5 billion. So we're looking forward to that.
Yeah, thank you, that's a good question, we have placed our strategy to seek opportunities both domestically and overseas and we've been keeping a close eye on the growth of the international learning market for contact, a report by Global Market Insights estimated the global e-learning market to be valued at a very large scale.
So the Asia, especially the Asia-Pacific market alone would value upwards of $60 billion market size, I remember. With increasing penetration of the Internet and the mobile learning, more people than ever are turning to e-learning platforms to learn new skills, foster personal growth and improve their quality of life. So as a part of our strategy planning, we have been continuously assessing our capabilities for international expansion.
As you know, our business is focused on the domestic market currently. And we built up a solid foundation based on three key factors. I think the first is our...
solid technology support our operations over the past few years, our online learning platform has evolved and is now highly stable and scalable. As such, we are well equipped to adapt to differences in demand that we could
experience in different regions.
Secondly, we have built up a strong business network and a number of comprehensive partnerships over the past few years. This gives us access to valuable market resources and insights, which help keep us at the forefront of the industry. And third, we have a healthy balance sheet, strong cash reserves, and we have been generating operating cash flows.
Secondly, we have built up a strong business network and a number of comprehensive partnerships over the past few years. This gives us access to valuable market resources and insights, which help keep us at the forefront of the industry. And third, we have a healthy balance sheet, strong cash reserves, and we have been generating operating cash flow, generating positive operating cash flow.
These factors provide us with a strong foundation to begin exploring opportunities in the international market. But meanwhile, we have proven in the past that we are willing and able to effectively adjust our operating strategies and our product and services offering.
Our approach is open-minded and we are...
Always seeking out our users' feedback to better address their needs. This adaptability has been key to our success, whether we are talking about the current brand Chinyou, Qianchi, and Jiangzhen, as we set our sights on going global, we will continue to keep an open mind and benefit from external feedback.
By doing so, we can understand what potential users want and tailor our course offering to effectively meet their needs.
And lastly, I want to point out that we will speak to our business philosophy and operation methodology to...
to try to be open-minded and to try each kind of opportunity on effective and efficiency maybe starting from very small scale after which prove that this model is successful we will enlarge and expand this business overseas very quickly, maybe in the future.
Thanks, and keep up the great work, guys.
Okay, thanks and keep up the great work, guys. Yeah, thank you.
Thank you. And the next question comes from Hunter Diamond with Diamond Equity Research.
Firstly, congratulations on the results. Could you provide further insights into the adult financial learning segment? We've observed a noteworthy recovery in this area since the start of the fiscal year. If you could give more details on the performance projections for this segment going forward. Additionally, how do you perceive the competitive landscape evolving in this market?
Yeah. Thank you. I think as I just mentioned, financial literacy courses is just one category of the courses. I will ask you, in our total interest courses package, we will treat the
all of our SQs, the interest in courses as a whole, to grow the revenue, which is based on our methodology that, and also our key capabilities that we are a very capable company which can develop, which can see the market trend, customer needs, and customer demand, and create the pillar-made, very interesting, inclusive, and accessible content for our customers, which can be proved by our historical track record. For example, we have launched Jiangzhen and Qianchi.
step-by-step using the same methodology to see the market trend and customer needs to promote the short-leaded production process and et cetera. So as a whole I think even though some fluctuation of the revenue for our initial literacy process currently.
We feel very optimistic in terms of the interest-based cost revenue growth in the future because we have the key capability to see the market trend, the business opportunity, and we have a dedicated content creation team.
to create the content, to launch the courses, which all generate very positive net results in the history. So I think in the future, even though the financial literacy courses may decrease, maybe in short term, I think as a whole of the revenue, all of the categories of our interested courses will grow.
create the content to launch the courses, which all generate very positive net results in the history. So I think in the future, even though the financial literacy courses may decrease, maybe in short term, I think as a whole of the revenue, all of the categories of our interested courses will grow. Yeah. Yeah.
Great. Thank you for the additional color. And then just one more question and I'll open the line to other analysts. The recent presentation alluded to inorganic growth and geographic diversification. And given the liquidity and cash investments on your balance sheet, how do you see acquisitions fitting into your investment orientation?
Yeah, may I repeat your question? You mean the potential acquisition of new businesses?
Correct. Yeah. Yeah, I think even though we have generated positive operating cash flow, and also in the latest, in the fourth quarter, we generated a huge amount of net profit, both adapted and non-adapted net profit, I think even though we have a very solid financial position and enough financial resources, I think we have a very solid financial position, and I think
We still stick to our business discipline and business methodology to start from a small and small scale to prove it, to prove the business model and only after that.
We will grow the business, even though maybe by ourselves or by acquisition of some companies or some assets, they're open to every, each opportunity is an opportunity, only if that we prove it is a successful business model.
Great. That makes perfect sense. Thank you for taking my questions.
Great. That makes perfect sense. So again, thank you for taking my questions. Thank you.
Thank you. And the next question comes from Pat McCann with Noble Capital Markets.
Hey, congrats on the continued growth. I have two questions. The first one has to do with the online learning side of the business. When it comes to the other personal learning courses, do you have any in the pipeline? Are you looking to expand the course offerings here in the short term in fiscal 2024? Yeah, actually.
Hey, congrats on the continued growth. I have two questions. The first one has to do with the online learning side of the business. When it comes to the other personal learning courses, do you have any in the pipeline? Are you looking to expand the course offerings here in the short term in fiscal 2024? Yeah, actually I think we have
We have a methodology to do the market research and to collect customer feedback in terms of our content development and also the cost development. Basically we have a pool to run several courses to test the market and also to seek feedback from our customers.
But only when we prove that the customer likes it and also the net result of the ROI is okay, we will expand the scale of that kind of process.
So, I think actually we definitely have a pipeline and we have a solid tool to prepare for the future growth and future revenue growth.
And I think this is our capability and also which has been proved in the past four years. We can and we are able to launch new courses which cater to the customer's needs and also
can develop our own business position and also our own strength in the market. So in the sum, I think we have, we definitely have the pool for our pipeline and also we launch such kind of courses in due course when we think it is profitable.
Okay, thank you. And then on the e-commerce side of the business.
Is Chinese Glucor, you know, that's currently obviously the the target market. Are you looking to, is that something that you want to kind of stay laser focused on that product offering for the time being or is that you know sort of a launch pad to to get into other products to you know market through your ecommerce business.
Yeah, I think for our business methodology, I think the focus is very important.
So even though we have a very small infrastructure in terms of the live streaming technology and business model, we should focus on one thing, especially at the initial stage of the e-commerce development. So currently, I think this strategy proved to be successful. Because we can focus this product and focus on the whole streamline of the business operation and the business flow, leveraging our current resources.
Even though we have a very solid infrastructure in terms of the live streaming technology and business model, we should focus on one thing, especially at the initial stage of the e-commerce development. So currently, I think this strategy proves to be successful because we can focus this product and focus on the whole streamline of the business operation and the business flow, leveraging our current resources.
But actually, we are trying some small scale of other kinds of FAQs through the lab training. But the current stage focuses on the maker which has proved successful initially at this stage. I think maybe in the future we have the capability and we have the platform to enlarge our FAQs and also the product mix. But currently I think in the short term we will focus on this FAQ and this new initiative when we prove that it is a big success to launch and to expand.
But actually we are trying some small scale of other kinds of FQs through the lab screening. But the current stage focuses on the data which has proved successful initially at this stage. I think maybe in the future we have the capability and we have the platform to enlarge our FQs and also the product mix. But currently I think in the short term we will focus on this FQ and this new initiative when we prove that it is a big success we will launch and see the extent. Great, thank you and congrats again on the quarter.