Minsheng Education Announces 2019 Interim Results Revenue Increases by 66.4% to RMB526.4 Million Adjusted Net Profit Up to RMB232.8 Million

Strong growth on the back of solid fundamentals

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HONG KONG, CHINA - Media
OutReach - 19 August 2019 - Minsheng Education
Group Company Limited (“Minsheng Education”
or the “Group“, stock
code: 1569) announced its interim results for the six months ended 30 June 2019
(“Review Period”).

Financial Highlights

• Revenue increased by 66.4% to RMB526.4 million (1H 2018: RMB316.3
  million)
• Gross profit grew by 62.6% to RMB306.5 million (1H 2018: RMB188.5
  million)
• Adjusted net profit increased by 2.5% to RMB232.8 million (1H 2018:
  RMB227.2 million)
• Student enrollment reached 74,450, representing a year-on-year increase
  of 71.8% (1H 2018: 43,344 students)

For the six months ended 30 June 2019, benefited
from external mergers and acquisitions, as well as organic growth, the total
student enrollment of Minsheng Education has reached a record high of 74,450
students. The Group’s revenue rose significantly to approximately RMB526.4
million, representing an increase of 66.4% over the corresponding period last
year. Gross profit increased by approximately 62.6% to approximately RMB306.5
million, while the gross profit margin remained stable.

The Group’s profit for the period amounted
to approximately RMB203.7 million, representing a 7.8% decline as compared to
the same period last year. The decrease was mainly due to the decline in fair
value gains on an equity investment at fair value through profit or loss during
the Review Period in 2019. The core business of Minsheng Education grew
steadily during the Review Period, with a 2.5% growth in adjusted net profit to
approximately RMB232.8 million.

Business
Review during the Review Period

As of 30 June 2019, Minsheng
Education operated and/or managed 11 schools in China, primarily offering
formal higher education, including formal undergraduate education and junior
college education. Student enrollment has reached 74,450 students in aggregate,
representing a significant increase of 71.8% year-on-year and setting a new
record. In addition, the Group has entered into agreement for the acquisition
of three undergraduate universities in Anhui province, Hebei province and
Jiangxi province, the financial results of which will be consolidated into the
Group’s accounting statements upon completion of necessary approval procedures.

In respect of the
external mergers and acquisitions, Minsheng Education acquired Qufu Fareast
Vocational and Technical College (“”Fareast College”) in November 2018 and
started its entrustment management in February 2019. In March 2019, Minsheng
Education acquired Nanchang Vocational University, which is one of the first 15 pilot vocational
undergraduate institutions in the PRC. Enrollment of the
first batch of undergraduate students will commence in September 2019.

As far as organic growth is concerned, the
Group further expanded its continuing education and vocational qualification
training business. Pass College of Chongqing Technology and Business University
has admitted 3,704 adult students for degree and junior college programs, while
Chongqing College of Humanities, Science and Technology has trained a total of
4,652 people for the teacher qualification certificates.

During the Review Period, Minsheng Education
has become one of the constituents of the MSCI China All Shares Small Cap
Index. Prior to this, Minsheng Education has already been included as a
constituent of the Hang Seng Composite Index and the Hang Seng Stock Connect
Hong Kong Index. These demonstrate the capital market’s recognition to the
Group. The inclusion into these indices will help expand the Group’s
shareholder base and increase its liquidity, thereby creating value for
shareholders and strengthening the Group’s reputation in the capital market.

Outlook

The schools of the Group have been committed to
cultivating professional talents with skills they can apply in their
occupations. In the first half of 2019, the Chinese government announced a
series of policies and documents to promote the integration of enterprises with
vocational schools and universities, encouraging the cultivation of
application-oriented talents and diversification of vocational schools.
Benefiting from the policy of recruiting one million students in higher
vocational colleges as stated in the Chinese government work report, the
Group’s student enrollment quota for undergraduate universities and junior
colleges in the 2019-2020 school year will be increased by 7.3% and 27.9%
respectively.

According to the official statistics in 2018, there
are 750 private higher education colleges in China (including 265 independent
colleges). The distribution of schools is relatively scattered and the
concentration of the sections is low. Leveraging the extensive experience in
operations and mergers and acquisitions in the education industry, Minsheng
Education will seize the opportunities brought by government policies and
further expand the Group’s school network and the number of students through
the acquisition of high-quality undergraduate universities, with the aim to
cultivate sophisticated talents with skills they can apply, so as to lay a
foundation for the Group’s long-term development.

Mr. Li Xuechun, Chairman of the Board of
directors of Minsheng Education, said, “China has introduced a series of
policies on vocational education reform recently. We are optimistic about the
prospects of the private higher education sector and will continue to invest in
the higher education and vocational education sectors. We will continue to be
market-oriented and will cultivate for the society sophisticated talents with
skills they can apply, so as to create higher value for the Group and its
shareholders.”

About Minsheng Education Group Company Limited (Stock code: 1569)

Minsheng Education Group Company
Limited, listed on the Main Board of the Hong Kong Stock Exchange on 22 March
2017, is the first higher education operator that went public in Hong Kong and
one of the largest private higher education providers in the People’s Republic
of China (the “PRC”), focusing on cultivating high-quality practical-oriented
talents. As of 30 June 2019, the Group operated seven higher education
institutions, two secondary vocational schools and two high schools. The seven
higher education institutions are Chongqing College of Humanities, Science and
Technology, Dianchi College of Yunnan University, Pass College of Chongqing
Technology and Business University, Chongqing Vocational College of Applied Technology,
Chongqing Electronic Information College, Inner Mongolia Fengzhou Vocational
College (Qingcheng Branch) and Qufu Fareast Vocational and Technical College.
Minsheng Education primarily offers formal higher education, including
undergraduate and vocational programmes. For further details, please visit: http://www.minshengedu.com