Puxin Up 2% on Strong Q1 Student Enrollments
The stock in Puxin Ltd. (NYSE: NEW) rose 2% to $6.70 per American depositary share by midday Tuesday on its announcement of a high amount of student enrollments in the first quarter.
The after-school education provider said in a statement today that revenues hit $106.1 million in the three months through March, up 22% year-over-year. Net loss narrowed $6.27 million, or 8 cents per share compared with $37.13 million in the same period in the preceding year.
Puxin attributed the revenue growth to increased student enrollments, which soared 133% to 938,275. With schools closed and digital demand rising, Puxin's Online School had 357,614 student enrollments.
"In the first quarter of 2020, we successfully transitioned the offline courses to an online format. We have not only ensured that our students can complete the coursework with high satisfaction, but we have also provided an opportunity for our teachers to master the skills required for teaching small group classes online," Yunlong Sha, the chairman, and chief executive officer of Puxin, said in a statement today.
He added, "This has further enhanced the professional development of our teaching staff for our Online-Merge-Offline (OMO) strategy. We are confident in our abilities to remain one of the leading service providers for China's K-12 tutoring market."
At the beginning of April, as the broader market struggled on the outbreak of Covid-19, Puxin watched its stock fall to an all-time low of $3.62 per share. It has since recovered significantly. However, shares of Puxin are still down 19% year-to-date.
Based in Beijing, Puxin K-12, and study-abroad tutoring programs in classrooms and online are, according to the company, the third-largest after-school education service provider in China since 2017.
Despite the strong quarter, there are still some unknowns remaining for the Puxin going forward, which has been forced to lower its guidance in the second quarter. Puxin now expects to generate revenues in the range of $87.58 million to $92.04 million, representing a decline of 2% and a rise of 3% year-over-year in the second quarter. Schools started to reopen in China's largest cities in April, signaling good news for the education stock.
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