OneSmart Rises 6% on Strong Online Platform Performance
The stock in OneSmart International Education Group Ltd. (NYSE: ONE) soared 6% by midday Thursday to $4.94 per American depositary share on reporting that its online platform had picked up the performance for the company both financially and operationally during Covid-19 outbreak period in China.
The Shanghai-based company said in a statement today that OneSmart Online from February to April was able to maintain most of its revenue and gross margin compared to the same period in 2019. During the period in 2020, OneSmart's satisfaction rate remained above 90% with refund rates falling to as low as 5% compared to approximately 10% before the outbreak.
Also, class delivery through the education company's online platform hit comparable levels that its offline business hit before the spread of Covid-19.
"The Company is ideally positioned to further gain market share by quickly adapting to the needs of students online," Steve Zhang, the chairman, and chief executive officer of OneSmart, said in a statement today.
He added, "OneSmart's innovative online platform incorporates AI-powered smart assessment systems and a robust online teaching bank that is built over the past decade to ensure students can quickly and smoothly acclimate to an online learning experience."
With people under stay at home orders for the past few months, OneSmart has been one of the beneficiaries of an increase in demand for online education. According to a report published by the China Internet Network Information Center, the number of online education users in China skyrocketed 110% to 423 million, as of March.
Unfortunately for OneSmart, it has not fared too well in the stock market; shares are down nearly 26% year-to-date, putting it in penny stock territory.
Established in 2008, OneSmart runs a K-12 education platform, which includes OneSmart VIP business, HappyMath, and FasTrack English. As of November 2019, the company operated a network of 430 study centers across 35 cities in China.
Going forward, OneSmart is a stock to watch as it gets set to report its second-quarter fiscal year 2020 results on May 19. Over the next five years, the company said it will aim to serve over 1 million customers, and generate more than 10 billion yuan in sales.
Zhang concluded in his statement today, "We see enormous growth potential ahead and will take advantage of any opportunities that arise as the industry consolidates after the pandemic."