First High-School Education Shares Plunge On 1H Loss, Margin Pressure

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  • First High-School Education Group Co Ltd FHS reported the first-half FY21 revenue growth of 24.8% year-on-year, to RMB231.9 million ($35.9 million).
  • Gross profit decreased 3.6% Y/Y to RMB62.3 million ($9.6 million). The gross margin contracted 790 basis points to 26.9% as the cost of revenues increased 39.9%.
  • The operating margin was 1.8%, and operating income for the quarter fell 88.7% to RMB4.1 million ($0.6 million).
  • The company held RMB130.9 million ($20.3 million) in cash and equivalents as of June 30, 2021.
  • The company registered a net loss of RMB(3.8) million or $(0.6) million compared to an income of RMB31.9 million in 1H FY20. It reported EPS of RMB(0.05).
  • "Facing tough regulatory environment, we remain committed to driving rapid growth with further operation expansion while improving utilization rate for our existing schools," said Chairman and CEO Shaowei Zhang.
  • Price action: FHS shares are trading lower by 23.9% at $2.96 on the last check Tuesday.
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