K-12 English Provider China Online Education Drops Despite Revenue Growth
China Online Education Group (NYSE: COE) closed with a 1% loss on Tuesday despite the company announced a better-than-expected revenue growth.
The Beijing-based education platform, also known as "51Talk," said in a statement today that revenue in the first quarter increased to $68.8 million, up 52% from one year ago. Its net income reached $7.2 million, or 32 cents per share, turning profitable from a net loss of $9.5 million in the same period in 2019.
51Talk attributed the revenue growth in the first quarter to its number of active students and the average revenue per active student in the statement, with 26% and 21% year-over-year rises, respectively.
"This performance was driven by our continued strategic focus and successful execution of our K-12 one-on-one mass-market offerings in non-tier-one cities," Jiajia Huang, the chief executive officer of 51Talk, said in the statement.
Huang said that the company's branding and the boost in online education in China amidst the Covid-19 outbreak also contributed to the revenue growth.
"People view the coronavirus is actually a big push for online education. After that, we believe the awareness of the online education will be elevated to a new level," Min Xu, the chief financial officer of 51Talk said in an interview with CapitalWatch in March.
51Talk focuses on online and mobile spoken English education, which enables students in China, especially small cities, to take live interactive English lessons with overseas foreign teachers.
Through providing public living services, 51Talk reported $2.4 million coronavirus relief policies from the Chinese tax authority, the State Taxation Administration in the first quarter.
Looking ahead, 51Talk said it expects revenue of between $65.7 million and $67.1 million for the second quarter, representing a year-over-year increase of between 31% and 33%.
Shares in 51Talk fell to $26.86 per share, down 1% on Tuesday. The stock price of 51Talk has skyrocketed over 174% since 2020.