New Oriental disclosed a net loss of 5.7 billion that night, Yu Minhong live-streamed 1.6 million with goods

Abstract:Where is the transformation of New Oriental?

Zhongxin Jingwei, February 23 (Zhao Jiaran) Under the "double reduction" policy, the transformation of education and training institutions has attracted market attention. As a leader, New Oriental has made frequent moves recently, how effective is its transformation?

On the evening of the 22nd, New Oriental handed over the report card for the first half of fiscal 2022, with a net loss of 908 million US dollars in the half year, which is about 5.745 billion yuan, which is also the first performance loss financial report of New Oriental in the 18 years since its listing.

On the night of the release of the financial report, Yu Minhong also personally participated in the delivery of goods in the live broadcast room of New Oriental. Compared with the loss figures on the financial report, the record of 7.09 million yuan in live broadcast sales in the past two months seems to be a drop in the bucket. In addition, New Oriental has made attempts in many fields in the past six months, registering a new company in an average of 2.4 days, and what kind of fruit can be produced after many "blossoms" is still unknown.

Behind New Oriental's "quietest winter vacation": the half-year net loss exceeded 5.7 billion yuan

"K9 business response to national policies was completely stopped, and New Oriental had the quietest winter vacation since its inception." On February 16, Yu Minhong talked in the public account.

After the end of the "quietest winter vacation", New Oriental released its financial report for the first half of the 2021-2022 fiscal year on February 22. According to the data, New Oriental's half-year revenue was US$1.967 billion; net loss was US$908 million, equivalent to about 5.745 billion yuan, compared with a net profit of US$179 million in the same period last year. Affected by the news, New Oriental U.S. stocks fell nearly 10% before the market.

According to the financial report, as of November 30, 2021, New Oriental held cash, cash equivalents and restricted cash of $1.05 billion, compared with $2.648 billion in the same period last year, a decrease of nearly $1.6 billion; total operating costs and expenses were $2.703 billion, compared with $1.755 billion in the same period last year.

New Oriental previously pointed out in the announcement that the total revenue generated by K9 discipline training services accounted for 50% to 60% of the Group's 2020 and 2021 fiscal years, respectively, and it is expected that the termination of business will have a material adverse impact on the revenue in fiscal year 2022 and subsequent years. In addition, for the six months ended November 30, 2021, significant costs were incurred as a result of the closure of learning centres, termination of lease agreements and layoffs.

A series of changes not only have an impact on the company's performance, but also reflect on the stock price. As of February 22, New Oriental's U.S. stock price was reported at $1.52, down 92.39% from its high value of $19.97 in February 2021, and New Oriental's stock price in Hong Kong also fell from a high of HK$158.8 to HK$11.14 on February 22 in one year. As a subsidiary, New Oriental Online's share price also fell from a high value of HK$30.05 on January 2021 to HK$5.16 on February 22, a decline of more than 80%.

"The market value fell by 90%, the operating income decreased by 80%, the employees were dismissed 60,000 people, and the cash expenditure such as tuition refund, employee dismissal N+1, and teaching point rent withdrawal was nearly 20 billion yuan." Although it was subsequently clarified that "it does not represent the company's views", Yu Minhong's words written on January 8 did intuitively and concisely summarize the past year of New Oriental.

Live broadcast two months with 7.09 million goods, Yu Minhong is difficult to copy Luo Yonghao?

On the evening of the 22nd, Yu Minhong, who became an anchor with goods, appeared in the "Oriental Selection" live broadcast room. When he broadcasts live, he will take the main source of popular science agricultural products, habitually pop out a few words of English, and even discuss the history of the Hanfu he wears with other hosts.

Yu Minhong is broadcasting live. Source: Screenshot of Douyin live broadcast

It has been nearly two months since New Oriental announced the "Oriental Selection" as a new platform for live streaming at the end of 2021. According to the new jitter data platform, as of February 23, the cumulative number of goods selected by Oriental was 391, and the cumulative sales volume was 7.0873 million yuan.

Among them, its live broadcast debut ended with sales of 1,946 items; on February 22, it sold the highest single-day sales of 47,000 items, with sales of about 1.6 million yuan. Among the commodities sold cumulatively, food and beverages such as agricultural products are the mainstay, and there are 255 pieces with a unit price of less than 100 yuan, accounting for more than 60% of the total number of goods.

Many people compare Yu Minhong's live broadcast results with Luo Yonghao, who previously taught at New Oriental. In April 2020, Luo Yonghao's live debut exceeded 110 million yuan in 3 hours, but some viewers felt that this change was contrary, "when introducing crayfish, they said the feeling of mobile phone evaluation".

According to Xinjid data, in a live broadcast on February 22, Luo Yonghao sold 99,200 items, with sales of about 13.68 million yuan; since December 28, Luo Yonghao's cumulative sales have been 822 million yuan. That is to say, the sales of Oriental Zhenxuan in the past two months are about equal to Luo Yonghao's half-day record in the live broadcast room.

Although they are compared together, there are still big differences between the two live broadcasts. First of all, the time when Luo Yonghao and Yu Minhong entered the live broadcast is far from the same; the data shows that the average live broadcast time of oriental reserve in the past 30 days is 5.93 hours, which is less than Luo Yonghao's 19.22 hours; luo yonghao's sales are mainly digital and clothing, with many categories, and the price range is also different from that of oriental reserve.

According to the homepage of "Oriental Selection" Douyin, Oriental Selection is the only agricultural product live streaming platform of New Oriental Group and New Oriental Online, and the company belongs to Oriental Preferred (Beijing) Technology Co., Ltd., which is the new company established by New Oriental in October last year.

Why sell agricultural products? According to Yu Minhong's own words, he himself likes agriculture. If you use a verse to describe it, it is "Why do I always have tears in my eyes?" For I love this land so much." He believes that helping farmers live can help rural revitalization.

According to reports, Yu Minhong once said in the live broadcast that he led 100 New Oriental teachers to enter Douyin, and these teachers all signed a contract through internal recruitment, formulating selection criteria, screening, five online trainings, and finally reaching the anchor contract. Admittedly, teachers are no longer unfamiliar with outputting content in front of the camera, but there is still a gap compared with professional e-commerce anchors. Some netizens said that watching New Oriental's live broadcast with goods was "like in class".

An average of 2 days to set up a new company, where is the transformation of New Oriental?

Although live broadcasting is a transformation route that New Oriental has attracted much attention, it is not the only one. Since the landing of the "double reduction" in 2021, many education and training institutions have opened the transformation like eight immortals across the sea, and New Oriental's transformation style has even been commented on as "letting go of the self".

According to the data of Tianyancha, from July 2021 to the present, New Oriental has established 94 new companies, that is, an average of one every 2.4 days; and the business scope of new companies covers digital technology, network live broadcasting, computer training, off-campus hosting, sports industry and other fields.

For example, in January 2022, New Oriental subsidiary established Taiyuan Layout Future Technology Co., Ltd., whose business scope includes information system integration services, 5G communication services, etc.; in February, another subsidiary established Chengdu Zhihe Oriental Technology Co., Ltd., whose business scope includes non-residential real estate leasing; in December 2021, Nanjing Kuxue Yanxuan Technology Co., Ltd., a subsidiary of New Oriental, was established to operate the retail of publications, teaching aids, electronic products and other products. It can be seen that New Oriental has "blossomed" in many places in the non-education field.

On February 22, Yu Minhong released a public account titled "Life is not easy, everyone is good!" article, which talks about holding eight business work meetings a week to design future development paths. He said, "The new businesses and transformation businesses have begun to advance step by step after the initial hectics, and some have begun to show results." ”

Xiong Bingqi, president of the 21st Century Education Research Institute, said in an interview with Zhongxin Jingwei that education and training enterprises face many uncertainties in the transformation. "For example, the business methods in adult education, vocational education and other fields are different from discipline training, and in fact, it is not so easy to make a profit." In this context, some educational institutions choose to get involved in the fields of live streaming, finance, clothing and other fields, which is actually equivalent to a second entrepreneurship. Due to the problem of survival examination and personnel reemployment, sometimes they cannot be allowed to think too much about transformation. ”

"The future business volume of education and training enterprises in training will be affected and limited, which will be a major trend. The transformation does not have a standardized model, but requires enterprises to determine according to the judgment of the market and according to their actual situation. Chu Zhaohui, a researcher at the Chinese Academy of Educational Sciences, told China-Singapore Jingwei.

Regarding the opening of a number of new companies and involvement in non-education fields of New Oriental, Sino-Singapore Jingwei recently sent an interview letter to New Oriental, and has not received a positive reply so far.

"The development of New Oriental, almost everything starts from scratch." Yu Minhong once sighed like this. Now New Oriental, like being at a complex intersection, under the uncertainty, which road is going round and round, which one leads to the smooth road? This will take time to give an answer. (Zhongxin Jingwei APP)

(The views in this article are for reference only and do not constitute investment advice, investment is risky, and you need to be cautious when entering the market.) )

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Editor-in-Charge: Luo Kun