However, the key to success is not just shouting slogans, but survival and profit. According to data disclosure, from 20 13 to 20 17, the compound annual growth rate of China's educational technology market reached 25.7%. On the contrary, the number of participants continued to decrease. By the first half of 20 17, the number of players in online education industry had decreased to 1, 143. Obviously, the resources of the industry are gathering at the head.
Dialectically speaking, it is too early to say no subversion at this stage. At least from the financial situation of New Oriental in recent years, it is still growing steadily. However, at the moment when smart products are very popular, "education+technology" is undoubtedly the new pursuit of the education industry.
Interestingly, accustomed to New Oriental, many people don't know the full name of New Oriental Education Technology Group. In fact, as early as 2005 before the storm surge, New Oriental announced its involvement in the field of "science and technology" and established its professional online education platform company-New Oriental Online (1797. HK) is also one of the earliest online education websites in China.
In 20 14, New Oriental Online was separated from New Oriental Group, and now it has grown into one of the leading online education service platforms in China. It covers five business brands: New Oriental Online, Oriental Youbo, Cool Learning Dona, Cool Learning English and New Oriental Education Cloud, and provides convenient online education services for universities, K 12, pre-school students, university libraries, public libraries, children's families and other customers.
On March 15, New Oriental Online officially launched its IPO, offering 654.38+645 million shares, with the offering price per share ranging from HK$ 9.3 to HK$11,and the maximum planned fundraising is HK$18.26 million. The sponsors of this IPO are Morgan Stanley, Citibank and CICC. The company is expected to go public on the 28th of this month, which will become a veritable "online education first share" in Hong Kong's capital market. After the company landed in the capital, it also helped the parent company New Oriental Group to have a dual structure of Hong Kong stocks and US stocks.
1. Backed by big trees to enjoy the cool, its profitability ranks C in the industry.
From 2005 to 20 19, New Oriental Online has been established for the 14th year. According to the latest prospectus, the first and second largest shareholders of New Oriental Online are New Oriental Education Technology Group and Tencent respectively. The shareholding ratio of New Oriental Group is 66.72%, and Tencent holds 12.06% through its wholly-owned subsidiary Yingge, becoming a hidden big boss.
As for the management core of the company, Yu also boldly chose to be the co-CEO of New Oriental Online. Yu is said to be "bold" because he is a practitioner of information technology rather than education. Sun Chang majored in education when he was in college. Although he worked hard in the IT industry for more than ten years after graduation, he never gave up the opportunity to return to the education industry. On the one hand, IT is seeking to return to the field of education, and on the other hand, it is the New Oriental Group that is in urgent need of "technology" elements. It hits it off and I bet on the perfect fit between IT and education.
When New Oriental Online was founded in 2005, it happened to be the eve of the listing of New Oriental Group in the United States. As mentioned on many occasions, everything in New Oriental is profit-oriented, and New Oriental Online, as an independent business, is no exception. The offline schools of New Oriental Group are generally profitable in the second year. If there is no profitability, enterprises can easily be eliminated. So for New Oriental Online at that time, survival was the goal.
In the first year of its establishment, New Oriental Online's revenue quickly reached 6-7 million yuan (RMB, the same below), and it broke even in 2007, and it has been profitable every year since then. Being able to make a profit is also one of the biggest differences between New Oriental Online and other major competitors in the industry. As of May 3 17 fiscal year, the net profit level of New Oriental Online has reached 922 10000, with a year-on-year growth rate of 54.8%. By comparing the financial data of core players in the industry in fiscal year 20 17 (refer to the above figure), it can be clearly found that New Oriental Online is far ahead in sales expense ratio, R&D expense ratio and management fee rate.
For the online education industry at this stage, it faces the contradiction between scale expansion and cost control. The core reason why New Oriental Online can maintain a high profit level every year is not difficult to understand, that is, it is born with super brand power, R&D and management experience endowed by its parent company. At the same time, the company has two capital trees, New Oriental Group and Tencent, which ensures greater performance space in the future.
2. The largest comprehensive online counseling and preparation service provider in China.
Let's look at the company's business.
1) dual-service drive mode, and the number of payers continues to increase.
At present, New Oriental Online has three core branches, namely university education, K 12 education and preschool education. The company's main income also comes from students' course registration fees.
The company's courses are mainly provided through four platforms: New Oriental Online, Donna, Oriental Youbo and Cool Learning English. In addition to the guidance provided by New Oriental Online (the flagship brand) in the whole education stage, Donna, Oriental Youbo and Kuxue English respectively provide detailed guidance for preschool education, K 12 education and quality English education.
According to different customers, the business of New Oriental Online can also be divided into personal online classroom service (B2C) and online education service and brand authorization service (B2B) for schools and institutions. The platform courses mentioned above all belong to B2C, so the company as a whole is in a unique dual-business driving mode.
In terms of B2C, university education is the core revenue source of New Oriental Online, accounting for 7 1. 1% of the total revenue in fiscal year 20 18, while K 12 education and preschool education account for a relatively small proportion. However, the income growth of K 12 education and preschool education is very rapid, with the year-on-year growth rates of 105.0% and 2 19.7% respectively in fiscal year 20 18, and it is expected to continue to increase in the later period.
In terms of B2B, the business of New Oriental Online mainly includes institutional customers and brand authorization services. The company's institutional customers include universities, libraries and online video providers, and the number of institutional customers increased from 708 to 735 in fiscal year 20 18. Brand authorization service is mainly based on "Little Lion Dona" IP, which authorizes publishers, toy manufacturers, pre-school education service providers and other users.
For online enterprises, the most intuitive embodiment of brand power and product power is how many users are willing to buy related services in the form of payment. 20 16 Up to now, the number of online payers in New Oriental has exceeded 4.7 million, and the number of users is huge. According to the latest prospectus data, the number of paid students in the company increased from 653,000 in fiscal year 2065, 4.38+0065,438+0.10.000 million, and further increased to 654.38+0.94 million in fiscal year 2065,438+08. By the end of 6 months (20 18,165438+10.30), the number of people paid by the company had reached1104,000, with a year-on-year growth rate of 37.0%. The number of paid students is constantly refreshing, which means the strong business driving force of New Oriental Online.
Specifically, New Oriental Online University has the largest number of paying users for education, accounting for 59.7% in fiscal year 2065438, 1 158000. The number of paying users of preschool education is 597,000, accounting for 30.8%, and the compound annual growth rate from 2065,438+06 to 2065,438+08 is as high as 229%. The number of paying users in K 12 Education 20 18 fiscal year was185,000, accounting for 9.5%.
2) The revenue scale of all business lines increased year-on-year.
On the basis of the increasing number of paying students, the overall revenue scale of New Oriental Online is also expanding, from 334 million in fiscal year 20 16 to 446 million in fiscal year 20 17, and further to 650 million in fiscal year 20 18. In the six months ended 20 18,165438130, the company's income level reached 478 million, up 45.4% year-on-year.
Comparing the data of New Oriental Online in the first half of fiscal year 20 19 and the first fiscal year of fiscal year 20 18 (pictured above), the revenues of the three core businesses are all increasing year-on-year. Among them, the income from university education grew steadily, with a growth rate of 465,438+0.7%, mainly due to the increase in the number of paying students; The growth rate of K- 12 education is 9 1.5%, which is mainly due to the substantial increase in the number of paying students and the expansion of Oriental excellent broadcasting courses; The income growth rate of preschool education reached 166.0%, mainly due to the optimization of application programs by Kuxuedona and the diversification of classroom products for foreign teachers in Kuxuedona.
According to the Jost Sullivan report, according to the total revenue statistics, New Oriental Online was the largest comprehensive online counseling and preparation service provider in China in 20 17, with a market share of 0.63%. In the same year, the company was the largest online education brand in the preparation market of China University, with a market share of 8.2%.
On the whole, although it doesn't adopt the radical "burning money" strategy like its competitors, New Oriental Online, which has strong brand power, is still in the leading position in the industry in terms of its "land occupation" ability, and it is difficult to be shaken in a short time.
3) Optimize income distribution, and rapidly expand k 12 business to third-and fourth-tier cities.
Although it started with a college degree, the company has been consciously improving its income structure in recent years. With the accumulated experience in flagship brands, we have continuously expanded the scope of products and services, and successively established Oriental Youbo and Dona brands, introducing more low school age and preschool education content. Under the blue ocean of K 12, New Oriental Online also regards K 12 business as the "first shot" of income diversification, which is of great significance to the company's future growth.
For K 12 business, the strategic layout of New Oriental Online k 12 Oriental Youbo is to sink to third-and fourth-tier cities to open offline experience stores, and then drain to online course booking. According to the prospectus, as of May 3 1 2,065,438, New Oriental Online has established experience stores in 26 cities in 10 provinces across the country for the Oriental Youbo platform of k 12 education, while as of May 30, 20165438, the company's territory has been 14 nationwide. At present, the main expansion direction of Oriental Youbo platform is mainly in the southeast, central and southern regions with excellent economy, which is more conducive to the subsequent absorption of paying people.
Under the continuous sinking and expansion, in the first half of fiscal year 20 19, the income of New Oriental Online from K 12 education has reached 15.8%, which is obviously increased by nearly 8 percentage points compared with fiscal year 20 16. At the same time, the number of K 12 payers has reached 292,000, with an increase rate of 2 16.
Since its birth, online education has shouldered the mission of making "educational equity" possible. After the first-and second-tier cities form a high share, they further sink to the third-and fourth-tier cities. Whether for public welfare or profit, New Oriental Online is fulfilling the inevitable growth mission of this industry.
IT is worth noting that the K 12 small class model of New Oriental Online has extremely low customer acquisition cost. However, in the fierce market competition, the company said that it would invest more money in the recruitment of teachers for content research and development, attract students through word of mouth, reduce marketing expenses, upgrade IT systems, and make the Internet more prominent.
4) The quantity and quality of teachers and R&D teams should be improved simultaneously.
In the back support of business, New Oriental Online has not slacked off, recruiting more than 800 course R&D personnel and accumulating more than 654.38+00000 knowledge base problems, which provides strong support for students' learning.
Meanwhile, as of October 30th, 20 1 18/kloc-0, New Oriental Online had 2,453 teachers and 2,969 tutors, while the number of teachers as of May 30th, 20 18 was 10/kloc-0. Among them, the vast majority of full-time and part-time teachers have bachelor's degrees, and more than one-third of teachers have master's degrees or above, and the teaching staff is strong.
End of movement
The data shows that from 20 13 to 20 17, the compound annual growth rate of China's educational technology market is 25.7%. It is predicted that the market will still maintain a relatively high growth rate of about 23.8% from 2065438+07 to 2022. At the same time, the current competition pattern of the whole industry is relatively scattered. The total market share of the top five comprehensive online education companies is 1.67%, and the top five educational technology companies account for 5.92% of the total market turnover.
Through departmental supervision and even the "survival of the fittest" of the industry, in the second half of the mobile Internet, online education will inevitably accelerate integration, and the industry will move from fragmentation to centralization. In this context, the "head effect" will be reflected.
New Oriental Online is a well-born online education company and one of the few profitable online education companies in the industry. The future extension of K 12 business will increase the company's performance flexibility, and the capital endorsement of the parent company and Tencent will also provide sufficient safety margin for the company.