Bright Scholar's Shares Slip 2% on Losses, Market Uncertainty

Bright Scholar suffered losses of 48.1 million yuan in the fourth fiscal quarter, though its revenue has nearly doubled, according to the report.

Author: Anthony Russo   

The stock in Bright Scholar Education Holdings Ltd. (NYSE: BEDU) closed 2% lower on Friday, at $8.92 per American depositary share, after the company reported losses for the fourth fiscal quarter.

The Chinese operator of international and bilingual K-12 schools said in a statement on Thursday after markets closed that its revenue in the three months through August has nearly doubled to 711.6 million yuan, up 83% year-over-year. The company suffered a net loss of 48.1 million yuan in contrast to a net income of 11.7 million yuan.

Bright Scholar attributed the increase in revenue to its domestic K-12 schools, which generated 55% of its revenue, at $394 million yuan, according to the company's report.

As of August, Bright Scholar said it had an average of 44,719 students enrolled in its schools.

The company's mixed results in the period, as well as increased fears among investors on trade war tensions, sent the stocks in the red on Friday across the board. U.S. President Donald Trump today said he will not roll back tariffs on China in the Phase One interim deal that has been under discussions.

Lukman Otunuga, a research analyst at ForexTime, told CapitalWatch in a statement today that capital markets will remain on a rollercoaster ride over the next few months.

"Until the United States and China roll back existing tariffs, equity markets and riskier assets are likely to face obstacles down the road," Otunuga said.

In July, Bright Scholar acquired CATS Colleges Holdings Ltd., an international school platform with campuses located across the United Kingdom, the United States, Canada and China, for $192 million. Bright Scholar plans on further expanding overseas, as noted by Jerry He, its executive vice chairman.

"The expansion into the UK and US markets represent the first step of our long-term goal of growing our footprint beyond China and capitalizing on global growth opportunities. As of the release date, we have a global network of 88 schools with a total capacity of 67,194 students," He said in a statement today.