Q2 2025 New Oriental Education & Technology Group Inc Earnings Call
Okay.
Good evening and thank you for standing by for New Orientals, FY 2025 second quarter results earnings Conference call.
Ms. Zhao: At this time all participants are in a listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded if you have any objections you may disconnect. At this time I would now like to turn the meeting over to your host for today's conference Ms. <unk> Zhao. Thank you. Please go ahead.
Ms. Zhao: Thank you.
Speaker Change: Hello, everyone and welcome to new Orientals second fiscal quarter of 2025 earnings Conference call. Our financial results for the period were released earlier today and are available on the company's website as well as on Newswire services today, Steven Young executive President and Chief Financial Officer and is well.
Speaker Change: Sure New Orientals latest earnings results and business updates in detail with you after that Stephen and I will be available to answer your questions. Before we continue. Please note that the discussion today will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act.
Speaker Change: Thanks.
Speaker Change: Forward looking statements involve inherent risks.
Speaker Change: Uncertainties as such our results may be materially different from the view expressed today a number.
Speaker Change: Potential risks and uncertainties are outlined in our public filings with the SEC, New Oriental does not undertake any obligation to update any forward looking statements, except as required under applicable law. As a reminder, this conference is being recorded in addition, a webcast of this conference call will be available at your analyst Investor Relations.
Speaker Change: Right.
Speaker Change: Lesser adopt new Oriental aboard.
Speaker Change: Now I'll first turn the call over to Mr. Stevens. Please go ahead. Thank you C C.
Speaker Change: Hello, everyone and thank you for joining us on the call.
Speaker Change: We're pleased to inform you that new Oriental has achieved a healthy growth in this quarter's financial performance.
Speaker Change: Which has surpassed our expect your expectations.
Speaker Change: Revenue grew 19 point.
Speaker Change: 4% year over year, and total net revenues, excluding revenues generated from east to buy private label products a lot of screaming business increased by 31, 3% year over year. We're encouraged by the continued growth of our new ventures.
Speaker Change: We have bolstered the company's revenue.
Speaker Change: We believe they will further progressed positively moving forward.
Speaker Change: Youll rentals bottom line performance for our core education business has also shown solid returns.
Speaker Change: To better reflect no rentals core education business, we have excluded the operating margins generally generates from east to buy for this quarter, our operating margin non-GAAP operating margin reached two 8% and three 2%.
Speaker Change: Respectively.
Speaker Change: From these substantial efforts investing in our offerings and platforms that have been shown effective our commitment to sustaining healthy profitability and market share remains strong as we continue to aim for long term value creation for our customers and shareholders.
Speaker Change: Now I'd like to spend some time to talk about the quarter's performance across our remaining business lines and new initiatives to you in detail.
Speaker Change: Our key remaining business have showcased the promising trends.
Speaker Change: Yeah, Jason to positive momentum across our businesses.
Speaker Change: Breaking it down.
Speaker Change: The overseas test prep business recorded a revenue increase of.
Speaker Change: 21% year over year for the second fiscal quarter of 2025.
Speaker Change: The overseas study consulting business reported a revenue increase of about 31% year over year.
Speaker Change: Second physical quarter of 2025.
Speaker Change: It also is a university students business recorded a revenue increase of.
Speaker Change: Three a 30.
Speaker Change: 35% year over year for this quarter.
Speaker Change: At the same time.
Speaker Change: Our ongoing investment in new education business initiatives, primarily focus on facility against students all around development.
Speaker Change: Also continued to thrive with steady growth.
Speaker Change: Moving the company's momentum.
Speaker Change: Firstly, the <unk> two different business, which we have now expanded to around 60 regional Cds focus on calculating students in a way the probability and the comprehensive quality we have.
Speaker Change: We have attracted high interest with the total approximately.
Speaker Change: 994000 student enrollments reported in this quarter.
Speaker Change: The top 10 cities contributed over 60% of this business.
Speaker Change: Secondly, the intelligent learning system and device business utilize our past strategic experience data technology to provide personalized and targeted a learning exercise contents, thereby improving students' learning efficiency will have tested the adoption of this new business in around the 60 existing cities.
Speaker Change: And are pleased to see improved scalability.
Speaker Change: The revenue contribution of this business from top 10 cities in Thailand is around 50% or smart education business, the educational materials and peaceful lives smartest studies solutions have continued healthy development.
Speaker Change: In summary, our new education business initiatives have reported a revenue increase of about 43% year over year for the second quarter.
Speaker Change: In addition, our newly integrated tourism related business lines, which includes our study tour and the research campuses for K 12, and University students as well as our tourism business several needle senior audience.
Speaker Change: Has collectively recorded a revenue increase of 233% year over year for the second quarter.
Speaker Change: So that mature and research campuses are now operating at around six five cities across the country, where the top 200 cities in China offering over 50% of the revenue share of the steel business. We're also facilitating a number of top notch.
Speaker Change: Tourism offerings to all age groups, including the middle aged elderly individuals across three across 30 featured a province in China and globally.
Speaker Change: With regard to our <unk> system, we have persisted revamping our platform leveraging our application reinsurance structure and technology strengths in order to provide the advanced <unk>.
Speaker Change: As a Christian service to our customers.
Speaker Change: Our hedges during this quarter when you last year $39 million to improve and maintain our multichannel platform, which enhanced user experience and supports the growth of our education offerings.
Speaker Change: Now, let me share some updates on his device performance.
Speaker Change: During the reporting periods Easter by expanded product ranch from fresh foods and snacks to diversify the portfolio launching 600 skus in private label products by November 2020 for.
Speaker Change: This includes healthy carryforwards path toward and new Chinese spell clothing.
Speaker Change: Contributing.
Speaker Change: Approximately 37% of the total <unk> for the six months and be able to have virtual in 'twenty four.
We're pleased to see multi platform strategy is expanding its consumer base and increase the brand awareness through enriched live streaming products and online shops on platforms like meaning program. We've had many store PMO JV Kindle and rectal.
Speaker Change: This multichannel approach has driven record gross it's labeled products.
Speaker Change: Paintings.
Speaker Change: Is the buyer has begun exploring offline channels with vending machines in new Orientals learning centers.
Speaker Change: The company's strategy.
Speaker Change: The advanced quickly offering daily necessities and high quality products, leading to increased user contributions and strong loyalty.
Speaker Change: With regard to the company's latest financial position I.
Speaker Change: I am pleased to share that the company has seen a healthy financial status with cash and cash equivalents term deposits and short term investments totaling approximately $1 $8 billion.
Speaker Change: On August 19 2024.
Speaker Change: <unk> announced its board of directors approved a special dividend of 0.0 $6 per common share.
Speaker Change: 0.6 dollar per avs to holders of common shares in ABS of record as of the close of the businesses on September nine 2024.
Speaker Change: Hong Kong time in New York time, Chris.
Chris: Spectrum the payment date was.
Speaker Change: Around September two.
Speaker Change: <unk> 2024 for holders of common shares as of September 26th 2024 for holders of assets.
Speaker Change: The total cash dividend distributed was approximately $1 million.
Now I would like to take the opportunity to highlight that the company's board of directors approved a share repurchase program in July 2022 in which the company is authorized.
Speaker Change: Through repurchase apps with $1 million of the company's Avs will common shares will be the next 12 months.
Speaker Change: Company's board of directors has further proved that to extent the effective time.
Speaker Change: The share repurchase program through May 31.
Speaker Change: 2025, and increasing the aggregate value of shares that the company is authorized to repurchase.
Speaker Change: From $400 million to $700 million.
Speaker Change: As of January 22025, the company repurchased an aggregate of approximately $11 2 million assets for approximately $542 8 million from the open market.
Speaker Change: Now I will turn the call over to <unk> to share with you about the key financials.
Speaker Change: Please go ahead. Thank you Steven now I'd like to share our key financial details for this quarter operating cost expenses for the quarter were $1019 $4 million.
Speaker Change: Representing a 22% increase year over year non-GAAP operating expenses for the quarter, which excludes share based compensation expenses.
Speaker Change: $1011 1 million, representing a 23, 5% increase year over year. The increase was primarily due to the costs and expenses.
Related to the accelerated capacity expansion for education businesses and newly integrated tourism related business.
Speaker Change: Revenue increased by 17, 9% year over year till $498 $3 million.
Speaker Change: Selling and marketing expenses increased by 26, 6% year over year to $196 1 million.
Speaker Change: G&A expenses for the quarter increased by 20% year over year to $324 $9 million non-GAAP <unk>.
Speaker Change: <unk> expenses, which exclude share based compensation expenses were $319 4 million representing.
Speaker Change: Representing a 24, 7% increase year over year total share based compensation expenses, which were allocated to related cost expense operating cost and expenses decreased by 71, 8% year over year to $8 $3 million in this fiscal quarters.
Speaker Change: Operating income.
Speaker Change: Whereas 19 $3 million, representing a 91, 8% decrease year over year non-GAAP operating non-GAAP income from operations for the quarter were $27 $6 million, representing a 45, 8%.
Speaker Change: The decrease year over year.
Speaker Change: Net income attributable to new Oriental for the quarter was 31.
Speaker Change: <unk> million dollars, representing a six 2% increase year over year basic and diluted net income per ads attributable to new Oriental or 20, SaaS and <unk> 19, respectively.
Speaker Change: non-GAAP net income attributable to new Oriental for the quarter, whereas $35 $5 million, representing a 29, 1%.
Speaker Change: That increase.
Speaker Change: Increased year over year, non-GAAP basic and diluted net income per Aes Asheville to new Oriental were.
Speaker Change: 'twenty two.
Speaker Change: Turning to SaaS, respectively.
Speaker Change: Net cash flow generated from operations for the second fiscal quarter of 2025 was approximately $333 million and capital expenditures for the quarter were $66 million.
Speaker Change: Turning to the balance sheet as of November 30.
Speaker Change: 2024, new Oriental had cash and cash equivalents of 1400 and $18 2 million.
Speaker Change: In addition, the company had 40.
Speaker Change: <unk> hundred and $43 $2 million in term deposits and 90 and $151 4 million in term and short term investments new orientals deferred revenue, which represents cash collected upfront from customers and related revenue will be recognized as a service or good.
Speaker Change: Our deliveries at the end of the second quarter of fiscal year 2025.
Speaker Change: 19, <unk> hundred $66 million, an increase of 19, 2% as compared to <unk> hundred $45 million at the end of the second half.
Speaker Change: Second fiscal quarter.
Speaker Change: 2020 for now I'll hand over to Stephen to go through our outlook and guideline guidance.
Speaker Change: Pieces, the paragraph that the CCU mentions of the net income.
Net income attributable to new Oriental for the quarter was $31.
Speaker Change: $9 million, representing six 2% increase year over year.
Basic and diluted net income per ads attributable to new Oriental words.
Speaker Change: 0.2 dollars and 0.1 $9 respectively.
Speaker Change: Although the outlook in fiscal year, 'twenty five Q3 guidance.
Speaker Change: In light of the current economic uncertainties, we remain committed to achieving steady and sustainable growth for our core educational business in the coming quarter, our confidence is bolstered by.
By the solid performance of our diverse business Alliance and our extensive education educational.
Speaker Change: The additional resources.
Dedicated to diligently adhering to the latest guidance from the Chinese authorities, including the recently announced a national action plan with the goal of Sop, establishing a high quality education system and unlocking.
Speaker Change: Locking potential across our business lines and in Norway.
Speaker Change: Is it efforts.
Speaker Change: To balance revenue and profitability growth, we will carefully manage our capacity expansion and hiring strategies to support the development of our education business and the rest of this year, we plan to follow our euro pace.
Speaker Change: Increased capacity with a focus on new offerings in cities with a robust local economy simultaneously, we will continue to invest in developing our emerging tourism related interest.
Speaker Change: The foundation, we have established and the progress we've achieved so far strength our confidence in our future performance. We expect total net revenue excluding revenues generated from is to buy.
Speaker Change: In the coming quarter December one 2024 to February 28, 2025 to be in the range of.
Speaker Change: $1007 $3 million to 1032 $5 million representing year over year increase in the range of 18% to 21% to protect increased software revenue our functional currency.
Speaker Change: It's expected to be in the range of 20% to 23% for the third quarter over the fiscal year 2025.
Speaker Change: To conclude new Oriental is dedicated to delivering.
Speaker Change: Delivering premium offerings to our customers, we're pursuing sustainable growth.
Speaker Change: Through our strategic planning capabilities, we'll continue investing in research and applications.
Speaker Change: Advanced technologies, including AI, and China, GPT to enhance our educational and product of product offering.
Speaker Change: Our aim is to strengthen our competencies.
Speaker Change: Driving growth.
Speaker Change: Reaching efficiency, we will also continue to seek guidance from and cooperate with the government authorities comply with the relevant policies guidelines and any related.
Speaker Change: The regulations measures and adjust our business operations required.
Speaker Change: We will work.
Speaker Change: Diligently to enhance the nations application level to strengthen its leading position so as to unveil further potential across our business lines and then realizing our vision.
Speaker Change: This is the end of our fiscal year 2025, Q2 summary at this point <unk> and I'd like to open the floor for questions. Operator. Please open the call for beef. Thank you. Thank you. The question and answer session of this conference call will start in a moment.
In order to be fair to all callers, who wish to ask question. We will take one question at that time from each caller.
Speaker Change: If you have more than one question. Please request to join the questions queue again. After your first question has been addressed.
Speaker Change: To ask a question. Please press star one one and wait for a name to be announced one moment for the first question.
Okay.
Speaker Change: Our first question comes from <unk>, Wang Chung from China Renaissance. Please go ahead.
Speaker Change: Yes perfect.
Speaker Change: Taking my question.
So starting with our Q3 revenue guidance I think even though you measure and.
Speaker Change: Daytime is 20% to 23%.
Speaker Change: <unk>.
Speaker Change: <unk> can we understand which part of its opinions to battery driving and package a trend how should we think about the rest of the year now also.
Speaker Change: In light of this new guidance, how should we think about underneath center expansion part.
Speaker Change: Well thank you.
Speaker Change: Thank you you bet yeah.
Speaker Change: <unk>.
Speaker Change: The revenue guidance of Q3, we were given the guidance.
Speaker Change: The year over year growth.
Speaker Change: In the rent over 20% to 23% of the army in terms unless I mentioned that we are using the conservative methods to give the guidance of Q3.
Speaker Change: And the reasons for a little bit of slow down and the revenue growth in Q3 are as follows number one.
Speaker Change: The uncertainty of the macro economy situation.
Speaker Change: Has the certain active negative impact on the demand of our high end education.
Speaker Change: Such as the overseas test prep and related business and some one on one business.
Speaker Change: Which is also high end business.
Speaker Change: And number two with the rapid recovery of the educational business in the last two to three years I think the revenue base is gradually increasing so I think the.
Speaker Change: The revenue growth in the Q3 will be a little bit slow down and number three I think.
Speaker Change: The impact of the exchange rates is approximately.
Speaker Change: And the 3%.
Speaker Change: That's why we gave the guidance in the <unk> down 18% to 21% in dollar terms and I think yeah.
Speaker Change: Even though we are facing to the associated with the macro economy situation change, but I think the measurements.
Speaker Change: Youll know.
Speaker Change: Tower back to grow the revenues and so we expect to be in the guidance, we gave to the investors.
Speaker Change: The interest rate.
Speaker Change: And I think.
Speaker Change: On the other hand, I think we will share more about the.
Speaker Change: The balance between the revenue growth and the operating efficiency at the same time, our long term.
Speaker Change: As for the expansion plan.
Speaker Change: Quarter.
Speaker Change: We opened this quarter.
Speaker Change: <unk> expenses in Q2 with the expansion was 5% Q on Q.
Speaker Change: In Q3 and for the whole year, we have the second half of the year left and in the in the eye in the whole year, we plan to open 20% to 25% of the new learning centers.
Speaker Change: I think.
Speaker Change: We're only opening new learning centers.
Speaker Change: In the in the CB is that the last year I am a timeline per topline and Bottomline performance, well and we allow them to open more learning centers and job.
Speaker Change: We still care more about the utilization.
Speaker Change: All six new learning centers. So that's why I cited we care more about the topline growth.
Speaker Change: The margins.
Speaker Change: Thank you.
Speaker Change: Thank you for the questions next question is from the line of Felix Liu from UBS. Please go ahead.
Speaker Change: Good evening and thank you management for taking my question Mike.
Speaker Change: Can I just follow up on.
Speaker Change: One of the issue that you mentioned, which is macro impacting.
Speaker Change: On the higher end business.
Speaker Change: Do you see any potential risk to your more mass market served.
Speaker Change: Such as the new education businesses and can management comment on the competition landscape.
Speaker Change: You are observing on the ground across your business lines.
Speaker Change: Competition played into our role in the deceleration. Thank you.
Speaker Change: I think for the new business.
Speaker Change: <unk>.
We still guide the Q2 guidance about.
Speaker Change: 40% in RMB term year over year growth.
Speaker Change: And so.
Speaker Change: Is still very strong and as for the competition, Yes, we are.
Speaker Change: Have seen some.
Speaker Change: A little bit strong competition in the market.
Speaker Change: I think we're fine so we're still taking more market share from the market and.
Speaker Change: And because of the base.
Speaker Change: In Q3, we guided 40% in RMB term year over year growth.
Beth: Hi, Beth.
Speaker Change: Yes.
Speaker Change: Alex.
Speaker Change: Great. Thank you. Thank you for the questions.
Speaker Change: One moment for the next question.
Speaker Change: Next question comes from the line all Lucy.
Speaker Change: Hi America Securities. Please go ahead.
Speaker Change: Thank you so Steven I remember earlier, you would get the full year guidance for 25 or 30% revenue growth excluding <unk> spot.
Speaker Change: Given that the next corner you have more cost around like 21% to 23%.
Speaker Change: Suddenly that fourth quarter, we have to accelerate our revenue expansion.
Speaker Change: Revenue growth.
Speaker Change: Sure.
Amy for slower growth.
Speaker Change: Thank you.
Speaker Change: Yes, yes.
Speaker Change: The uncertainty of the macro economy.
Speaker Change: The economy situation I think we need one more quarter to see to give you would be to give you. The Q4 guidance. So I think look for the whole year, yes.
Speaker Change: We're facing a little bit of slowing down in Q3, and but for the whole year I think in RMB term.
Speaker Change: We still got the topline relative offtake.
Speaker Change: Year over year growth by let's.
Speaker Change: Let's say the 25% in RMB terms or more for the whole year guidance.
Speaker Change: Lucy.
Lucy: Thank you so much.
Speaker Change: Thanks for your questions.
Speaker Change: Next question comes from Timothy Zhao of Goldman Sachs. Please go ahead.
Speaker Change: Thank you Hi, Stephen Hi, My question is regarding your in your Education initiative I noticed that when you report your student enrollment number I think for this quarter or does that mean Turing.
Speaker Change: AUM growth was around 6% I was wondering could you further elaborate on that and what is the more normalized growth. We can expect in terms of the student enrollment for them now kind of maturing and also a follow up question I think.
Speaker Change: Center ramp up I think you mentioned do you see slightly more competition on the ground could you share I think what is the latest learning center impart pace in terms of the time for breakeven time to reach a more mature stage and I was hoping you could give us at different rates that you see on the graph.
Speaker Change: Okay.
Speaker Change: Regarding your enrolment question actually.
Speaker Change: If you look at the full year, roughly because quarterly enrollment number will be impacted by like.
Speaker Change: The reservation window et cetera, so there will be some fluctuation of growth.
And year over year actually at the.
Speaker Change: Our comparable was roughly about a 40% plus growth for our new business.
Speaker Change: Holding the non economic tutoring and this business should grow at similar or even faster and.
Speaker Change: Roughly about 5%, maybe 4% to 6%.
Speaker Change: Asps increased and so did not match the rest our volume increase.
Speaker Change: Which is.
Speaker Change: Most of it driven by the enrollment number that you can you can see from our release.
Thank you for the questions one moment for the next questions.
Speaker Change: Next question comes from the line of Elsie Cheng from CLSA. Please go ahead.
Elsie Cheng: Hi, Thank you for taking my question.
Speaker Change: Uh huh.
Elsie Cheng: Just wanted to follow up on.
Elsie Cheng: Appreciate that you mentioned.
We see again more premium business.
Elsie Cheng: So how do you measure their nature.
Chris: Hello, Chris.
Chris: Usually in the educational in nature.
Chris: There's billions.
Chris: Consumption.
Chris: How many for how do you see the words for this business if we assume that going forward continue to.
Chris: Naturally the week data.
Chris: Hello.
Chris: Last quarter, we gave the guidance of the.
Chris: The <unk> business grow by let's say.
Chris: Less than 10% and because we have seen some parents.
Chris: Parents tend to their idea to send their kids to study abroad in future because of the macro economy situation change so.
Chris: I think it would be in the sweet the oversea test prep business will grow by let's say somewhere around 15% and so.
Chris: A little bit decelerated.
Chris: But this is what the real.
Chris: <unk> and K 12 business.
Chris: Okay, and we gave the guidance of 40%.
Chris: Year over year growth.
Chris: Two or three and so let's see.
Chris: To be like let's see for another quarter.
Chris: Give us a guidance Q4 in Mexico earnings call.
Chris: Okay. Thank you.
Andrew: Andrew Thank you for the question.
Chris: Questions.
Chris: Comes from Alex Chi for LCD panels.
Chris: Okay.
Chris: Okay.
Chris: Okay.
Chris: Yes.
Chris: Carlos Your line is open. Please go ahead.
Speaker Change: Alright, so im not hearing from Alice I would like to take the next question.
Speaker Change: We have our next question is from the line of Thomas Kim from Jpmorgan. Please go ahead.
Thomas Kim: Thank you Hi, Stephen ICC, Thanks for taking my question.
Speaker Change: And my name is <unk> sorry.
Speaker Change: Follow up on a full year guidance again I guess.
Speaker Change: Now as you kind of briefly remark to be can expect over 25% growth environment for the full year versus <unk>.
Speaker Change: Previously market or management training expected about 30%. So about five point deceleration makes a lot of sense, but how about <unk> margin can we still expect up to about 100 Pepsi expansion for the education on full year margin CT business and if okay. Can you also help elaborate.
Speaker Change: Albeit on the segment growth number baked in the full year revenue guidance, especially the new business I think assistant remark, 40% plus growth there, but just wanted to double check other segment and a little more details. Thank you.
Les: Yes Les.
Les: Yes, let's start with the this quarter our margin analysis in Q2.
Les: non-GAAP non-GAAP op margin for the educational business.
Les: Excluding that used to buy this quarter, what's the expanded by 12 basis points year over year.
Les: I think our.
Les: Mainly due to the some reasons.
Les: Because of the.
Les: The topline goals.
Les: Our goods in this quarter and we are starting to bear fruits of the learning center expansion last year, especially in the second half of last year.
Les: It's slightly utilization rates up and get more operators operational leverage and <unk>.
Les: Yeah as I said, we started to make some cost and expenses control when does the company sold this quarter, we got the operating leverage and drive the margin up.
Les: And as for the margin outlook for the second half of the year.
Les: No.
Les: As if that.
Les: I think the.
Les: We were facing some slowing down of the overseas related business. So I think the margin.
Les: The margin drag will be habits in the second half of the year from the overseas business and also the newly tourism business what type of market in the second half.
Les: And.
Les: So I think in the second in the second in the second half of this year, we will mix.
Les: We will meet some margin pressure.
Les: And as the margin outlook for the NAFTA year, I think we will see a steel expand the margin expansion for the whole company because you know the key Paul.
Les: <unk> will be extended in the new year.
Les: In the second half of the year as well and.
Les: Secondly, second.
Les: The second half of this year as well and what will start the call started to cover costs expenses of the overseas related business and we expect the margin profile of the chosen business next year will be better than that.
Les: This year.
Les: So this is the margin analysis.
Les: Yes.
Les: Thank you.
Les: Right.
Les: Yes.
Les: Yes.
Les: Okay.
Speaker Change: Once again, we have the line from this time from Citi.
Speaker Change: Thank you.
Les: Okay.
Les: Thank you management boarder opportunity.
Les: Yes.
Les: I'm sorry.
Speaker Change: Well, Alex there are some the alcohol in Horace Mann.
Speaker Change: So we cannot hear you clearly.
Speaker Change: Now is that maybe this one is okay.
Speaker Change: Thank you management for the opportunity to ask questions I have two questions today.
Speaker Change: The first one is I noticed that you have.
Speaker Change: During our regular dividend policy, which is quite interesting given the current.
Speaker Change: Market demand right.
Speaker Change: I'd like to ask Dr.
Speaker Change: Anticipated softening in demand and therefore, a blend more duration.
Speaker Change: In Capex spending going forward.
Speaker Change: So let me do you have an estimated timeline for when this dividend policy might be declared.
Speaker Change: <unk> built this balance between business expansion and shareholder returns.
Speaker Change: Regarding the reported improvement in break bulk.
Speaker Change: Even timeline for recent opened recently opened.
Speaker Change: I would like to know shall we expect similar efficiency level for future new learning centers. Thank you so much.
Speaker Change: The second question first.
Speaker Change: I think the.
Speaker Change: Typically we would spend six months.
Speaker Change: To get the breakeven point of the new learning centers. So the ramp up pace has not changed.
Speaker Change: As for the.
Speaker Change: Shareholders.
Speaker Change: Capital allocation.
Speaker Change: We announced $700 million share buy backs.
Speaker Change: <unk>.
Speaker Change: Now we're finished off 542.
Speaker Change: $8 million and I think we'll keep buying the share buyback.
Speaker Change: And in.
Speaker Change: In the open market and.
Speaker Change: As for the special dividends, Yes, we would have paid us $1 million as September as the special dividend well typically.
Speaker Change: The board of.
Speaker Change: The board of directors will discuss the.
Speaker Change: He knew your capital allocation policy in July and but anyway it depends on the.
Speaker Change: Market cap stock price and but but.
Speaker Change: I think the management.
Speaker Change: Your aim to create more value to the shareholders as a capital return thank.
Speaker Change: Thank you.
Thank you for the questions next question.
Paul Cheng: It will come from the line of Paul Cheng from <unk> Group. Please go ahead.
Paul Cheng: Hi can you hear me.
Speaker Change: Yes. Please go ahead.
Speaker Change: Yes. Thank you. So my question is about.
Speaker Change: How do you see the regulatory landscape on your core and non core business such as the tourism business do you see there are there any heightened regulatory.
Speaker Change: Regulatory risks.
Speaker Change: In those business areas. Thank you.
The only resolution side. So there is there is no change at all.
Speaker Change: Now and I think.
Speaker Change: Two two.
Speaker Change: Open the new learning centers.
Speaker Change: <unk> got the license from the.
Speaker Change: From the.
Speaker Change: The local governments and so thats why we would want to change our expansion plan of this year.
Speaker Change: And on France.
Speaker Change: The regulation side.
Speaker Change: Our.
Speaker Change: It's neutral to positive.
Speaker Change: And as of this call we're all apply for the <unk>.
Speaker Change: The requirement for the new government. The government you know things are.
Speaker Change: Three years ago.
Speaker Change: The policy change now the.
Speaker Change: Situation has no change from our original so that's it thank you.
Stephen Yang: Thank you for the questions right now approaching the end of the conference call I'll now turn the call over to the new Orientals equity Express Ethan and CFO, Mr. Stephen Yang for his closing remarks.
Stephen Yang: Again, thank you all for joining US today, if you have any further questions. Please do not hesitate to contact me or any of our Investor relations.
Stephen Yang: The representatives. Thank you.
Stephen Yang: That does conclude today's conference call. Thank you for your participation you may now disconnect your lines.
Stephen Yang: Thank you.
Stephen Yang: Yeah.
Stephen Yang: Okay.
Stephen Yang: [music].
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Stephen Yang: Yes.
Stephen Yang: Yes.
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Stephen Yang: Okay.
Stephen Yang: Okay.
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Stephen Yang: [music].
Stephen Yang: Yes.