China Securities Journal (Reporter Dong Tian) On August 30, Fenbi (02469.HK) released its interim results report for 2023. The report shows that for the six months ended June 30, 2023, Fenbi achieved an adjusted profit of 288 million yuan, compared with 95.63 million yuan in the same period of the previous year, representing a year-on-year growth of 201.2%. Revenue reached 1.682 billion yuan, representing a year-on-year growth of 15.9%.
Public information shows that Fenbi's main business is non-academic vocational education and training. Its core revenue comes from three major segments: online training, offline training, and the sales of teaching materials and tutorial materials. Thanks to the channel synergy effect brought by the OMO model (Online-Merge-Offline, the integration of Online and Offline), in the first half of 2023, Fenbi achieved a increase in both revenue and profit, with excellent profit performance in all its businesses. The gross profit margin of its online training business reached 61%.
In the first half of 2023, Fenbi achieved an adjusted profit of 288 million yuan, compared with 95.63 million yuan in the same period of the previous year, representing a year-on-year growth of 201.2% and achieving an increase of more than two times. Benefiting from the improvement of the external business environment, the optimization of business strategies and the continuous improvement of operational efficiency, the gross profit margins of the three major businesses of Fenbi all increased. A total gross profit of 856 million yuan was achieved, with a gross profit margin of 50.9%, compared with 47.5% in the same period of the previous year, an increase of 3.4 percentage points. It is worth noting that since Fenbi went public in January this year, the fair value loss caused by the pre-IPO preferred stocks along with the increase in the company's valuation no longer exists. The company's total liabilities have significantly decreased from 12.5 billion yuan as of December 31, 2022 to 890 million yuan as of June 30, 2023. As of June 30, 2023, Fenbi's net current assets reached 1.045 billion yuan, an increase of 84.9% compared with 565 million yuan as of December 31, 2022, further enhancing the company's operational security. The current liability ratio has increased from 1.8 times as of December 31, 2022 to 2.3 times, which has exceeded the generally recognized healthy level of 2.0 times in the secondary market.
According to the data, as of June 30, 2023, the Fenbi online platform has accumulated 56.2 million registered users. Based on the preferences and behavior data of students on the online platform, it conducts efficient marketing activities to increase the number of paying users in a cost-effective and light-asset way. According to public information, Fenbi has effectively controlled its sales and marketing expenses through word-of-mouth marketing. The number of sales personnel and advertising expenses are significantly lower than the industry average.
According to a report by Frost & Sullivan, in terms of the number of paying users in 2021, Fenbi ranked among the top in China's professional examination training industry and is also a well-known online professional examination training service provider in China, exceeding the combined scale of the other five major market players. Based on the accumulation of the user pool, Fenbi attaches great importance to enhancing the added value of training services, and the strategy of adjusting the product structure has gradually taken effect. Public information shows that since 2020, Fenbi has launched high-quality classes with relatively high average transaction values. By providing value-added services such as Q&A, group practice, and one-on-one services, the prices are usually between 980 and 49,800 yuan, which is higher than the 99 to 980 yuan pricing range of online system classes and specialized classes. Driven by good learning outcomes, The number of paying students in the online premium classes has been continuously increasing, which is expected to further open up the space for increasing the average transaction value. According to the interim results report of Fenbi in 2023, the gross profit margin of the online training business reached 61%, with a revenue share of 43.4%, demonstrating an outstanding profit performance. With the initial success of the OMO model layout, the hierarchical upgrade of online products, the expansion and coverage of offline networks, and the obvious growth curve of offline profits, the imagination space for Fenbi's continuous profitability has been further expanded.
In the first half of 2023, the online training business of Fenbi achieved a revenue of 730 million yuan, accounting for 43.4% of the total revenue, and remained the company's main source of income. The offline training business achieved revenue of 693 million yuan, a year-on-year increase of 32.3%, successfully achieving an ultra-high growth rate. The proportion of offline revenue was 41.2%, compared with 36.1% in the same period of the previous year. The gap with the online training business revenue has further narrowed, and the business health has steadily improved. The book sales business achieved revenue of 259 million yuan, increasing by 23.1% year-on-year, accounting for 15.4% of the total revenue.