Chairman’s Statement

Dear Shareholders,

On behalf of the board (the “Board”) of directors (the “Director(s)”) of the Company, I hereby present the annual report of the Group for the year ended 31 December 2023.

OVERVIEW

In 2023, in facing the drastic changes in the external environment, the Group responded calmly and took initiatives. All employees steadily promoted the Group’s strategic deployment, accelerated reform of the marketing system, made improvement in teaching quality, effectively managed the various risks and challenges, and achieved steady development in all business segments.

REVIEW OF RESULTS

1. For the year ended 31 December 2023, the Group’s revenue was RMB3,979 million, representing a year-on-year increase of 4.2% as compared to year 2022. The net profit for the year was approximately RMB273 million, representing a year-on-year derease of 25.8% as compared to year 2022; the adjusted net profit for the year was RMB281 million, representing a year on-year increase of 5.4% as compared to year 2022. The number of new students enrolled was 152,881, representing a year-on-year increase of 13.8% as compared to year 2022.
   
2. The average number of students enrolled nationwide in 2023 was 146,839. There were 5 new schools, including Zhengzhou On-mind, which recruited students and commenced operation, achieving nationwide coverage by bringing the total number of institutions nationwide to 245, and Kunming On-mind and other schools were at the preparation stage.
   
3. The Group continued to make speedy progress in its strategy of developing vocational education industrial parks (“Vocational Education Industrial Parks”). Phase I project of Vocational Education Industrial Parks at Sichuan and Shandong with a total area of 608 mu and 410,000 square meters have been fully completed and put into use. Phase I project of Vocational Education Industrial Parks at Guizhou and Henan with a total area of 486 mu and 150,000 square meters will soon be completed for operations. The investment projects of Vocational Education Industrial Parks at Jiangsu and Jiangxi are being planned and promoted. These Vocational Education Industrial Porks will be a key driver in increasing student demand for the Group’s education services and cost synergies can be achieved in future.
   
4. In the year 2023, 8 master studios of the Group at provincial and municipal levels were approved, accumulating to a total number of 45; 408 new production and education integration bases were set up in the country, 17 institutions were listed in the “Engineering Integration Construction List” of the Ministry of Human Resources and Social Security of the People’s Republic of China (the “Ministry of Human Resources and Social Security”), 2 institutions were selected as provincial high-quality technical construction units, and Ningxia New East and Chengdu On-mind were selected as training bases in China of the 47th World Skills Competition. In the Second National Vocational Skills Competition, students from Anhui New East, won the gold medal in the western cuisine project and the fifth in the sugar art and pastry project in China, and a student from Anhui Xinhua won the fifth in the 3D digital game art project in China, while three students were selected into the national training team at the same time to prepare for the 2024 World Skills Competition. The Group received 235 awards in major competitions at provincial and municipal levels, including the China International Culinary Skills Vocational League, the Berlin International Digital Talents Innovation Skills Competition, and the Third National New Energy Vehicle Key Technology Skills Competition.

LOOKING AHEAD

1. 1. We will make every effort to expand the scale of a single school, expand enrollment through multiple channels, comprehensively strengthen our brand building, increase brand awareness, and coordinate the implementation of our brand publicity. We will gather resources to support our Anhui and Sichuan regional colleges to apply for the status of technician colleges and accelerate the development of secondary technical schools. We will further expand the incremental business, build a full-chain ecological service platform for skilled talents in the vertical blue-collar segment, enhance our market competitiveness, actively promote the development plan for Vocational Education Industrial Parks at Sichuan and Shandong, accelerate the construction progress of projects of Vocational Education Industrial Parks at Guizhou and Henan, and continue to accelerate the development of Vocational Education Industrial Parks.
   
2. 2. We will strengthen the training of teachers, introduce more education experts, and carry out action plans for nurturing outperforming teachers. We will give priority to the research and development of new generation of information technology, nutrition and health, intelligent manufacturing, new energy and other emerging professions with large talent gaps, compile high-quality teaching materials, develop more core courses, deepen the integration of industry and education, school-enterprise cooperation, and explore the construction of a talent training model characterized by “technology-led, product as carrier, integrating theory and practice, and competency-based”.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to express my sincere gratitude to the parents of our students, the shareholders, and all sectors of society for their trust and support and to all employees and the management teams for their contribution and dedication. With full confidence in the future, we will continue to improve schooling quality, assume social responsibility and increase operating benefits with the goal of cultivating more high-quality skilled talents for the society and industry sectors and create greater value for shareholders.

China East Education Holdings Limited
Wu Wei
Chairman of the Board