Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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Stock Code：002607 Stock Abbr.：OFFCN EDU Announcement No.:2020-029
Offcn Education Technology Co., Ltd.
2020 Semi-Annual Report Summary
I. Important Notes
This summary is extracted from the full semi-annual report. In order to fully understand the Company's operating results, financial
status and future development plan, investors should read the full semi-annual report carefully disclosed on the media designated by
the China Securities Regulatory Commission (CSRC). The Company’s 2020 Semi-Annual Report is prepared and published in
Chinese version, and the English version is for reference only. Should there be any inconsistency between the Chinese version and
English version, the Chinese version shall prevail.
The board of directors, the supervisor committee, the directors, supervisors, and senior management of the company shall hereby
guarantee the authenticity, accuracy and completeness of the annual report also without misrepresentations, misleading s tatements, or
material omissions, and bear individual and joint legal liabilities.
All directors of the Company personally attended the board meeting to review this semi-annual report.
Notes of non-standard audit opinion
□ Applicable √ Not applicable
The plan for the common stock profit distribution or the plan for converting reserved funds into share capital during the reporting
period was reviewed by the board meeting
□ Applicable √ Not applicable
There is no plan of cash bonus, dividend distribution and capitalizing of common reserves carried out by the Company
The plan for the distribution of preferred stock profits during the reporting period is adopted by the board of directors through
resolution.
□ Applicable √ Not applicable
II. Basic Situation of the Company
1. Company Profile
Stock Abbreviation OFFCN EDU Stock Code 002607
Stock Exchange for Stock Listing Shenzhen Stock Exchange
Contact Person and Contact
Information
Secretary of the Board Representative of Securities Affairs
Name Gui Hongzhi Gu Pan
Address
Block B, Hanhua Century Mansion, No.23
Xueqing Road, Haidian District, Beijing, China
Block B, Hanhua Century Mansion, No.23
Xueqing Road, Haidian District, Beijing, China
Tel 010-83433677 010-83433677
E-mail ir@offcn.com ir@offcn.com
Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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2. Key Accounting Information and Financial Indicators
Does the Company need to adjust its financial information retrospectively or restate its previous year accounting information?
□ Yes √ No
During the Reporting
Period
Same Period of the
Previous Year
Increase/Decrease Over
Same Period of the
Previous Year
Revenue (RMB) 2,807,980,480.60 3,637,419,515.48 -22.80%
Net profit attributable to shareholders of the
parent company (RMB)
-233,026,645.16 493,025,465.15 -147.26%
Net profit after deducting non-recurring profit
or loss attributable to shareholders of the
parent company (RMB)
-367,542,382.83 472,434,917.34 -177.80%
Net cash flow from operating activities (RMB) 4,063,675,504.19 4,354,766,798.53 -6.68%
Basic earnings per share (RMB/share) -0.04 0.08 -150.00%
Diluted earnings per share (RMB/share) -0.04 0.08 -150.00%
Weighted average return on net assets -9.00% 16.56% -25.56%
At the end of this
reporting period
At the end of the
previous year
Increase/Decrease over
the end of the previous
year
Total assets (RMB) 13,263,976,215.43 9,960,705,427.94 33.16%
Total equity attributable to shareholders of the
parent company (RMB)
1,745,243,405.30 3,431,545,903.82 -49.14%
3. Number of Shares and Shareholders
Unit: share(s)
Total number of common shareholders at
the end of reporting period
33,231
Total number of preferred
shareholders with restored voting
rights at end of the reporting
period (if any)
0
Particulars about shares held by the top 10 shareholders
Name of shareholder
Nature of
shareholder
Shareholding
percentage
(%)
Shares held
Number of
shares held with
sales restrictions
Pledged or frozen
Status of shares Amount
Lu Zhongfang
Domestic natural
person
41.36% 2,550,549,260 2,550,549,260 Pledged 450,000,000
Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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Li Yongxin
Domestic natural
Person
18.35% 1,131,415,121 1,095,063,560 Pledged 774,495,000
Wang Zhendong
Domestic natural
person
15.61% 962,471,418 962,471,418 Pledged 107,100,000
Beijing Aerospace
Industry Investment
Fund(Limited
Partnership)
Domestic non-
state- owned legal
person
4.33% 267,353,171 267,353,171
Beijing Guangyin
Venture Investment
Center (Limited
Partnership)
Domestic non-
state-owned legal
person
2.89% 178,235,447 178,235,447
Beijing Kirui Venture
Investment
Center(Limited
Partnership)
Domestic non-
state-owned legal
person
1.44% 89,117,723 89,117,723
Beijing Offcn Future
Information
Consulting
Center(Limited
Partnership)
Domestic non-
state-owned legal
person
1.30% 80,000,000 0
Zhou Xiayun
Domestic natural
person
1.28% 78,848,640 0 Pledged 37,148,845
Zhou Hui
Domestic natural
person
1.17% 72,277,920 0 Pledged 9,450,000
Hong Kong Securities
Clearing Co.,Ltd.
Overseas legal
person
0.84% 52,098,611 0
Explanation on the related relationship
and concerted actions among the above-
mentioned shareholders
The controlling shareholders and the actual controllers of the Company Lu Zhongfang
and Li Yongxin are mother and son. Lu Zhongfang, Li Yongxin and Beijing Offcn
Future Information Consulting Center (Limited Partnership) are acting in concert. Zhou
Xiayun and Zhou Hui are father and son. The Company does not know whether the
other shareholders are related parties or whether they are acting-in-concert parties.
Explanation on the top 10 shareholders’
participation in margin financing (if any)
N/A
Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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4.Changes of controlling shareholders or actual controller
Controlling shareholder changed in the period
□ Applicable √ Not applicable
Controlling shareholders had no change in reporting period.
Actual controller changed in the period
□ Applicable √ Not applicable
Actual controller had no change in reporting period
5.The total number of preferred shareholders and the top 10 preferred shareholders' shareholdings of the
Company
□ Applicable √ Not applicable
During the reporting period, the Company did not have preferred stockholders holding shares.
6. Corporate Bond
Whether the Company has bonds publicly issued and listed on the stock exchange that have not expired or expired
but not paid in full on the date of approval of the annual report
No
III. Discussion about and Analysis of Business Operation
1. Overview of Business Operation during the Reporting Period
In the first half of this year, the outbreak of the pandemic led to the national suspension from work and classes. As
a result, a large number of recruitment examinations were postponed.These significant changes have had a huge
impact on the entire education and training industry. With the gradual lifting of the pandemic, the industry has
fully recovered and achieved rapid growth.
In response to the new situation after the pandemic, the central government put forward policies to ensure stability
and security in six areas (Ensure stability in employment, financial operations, foreign trade, foreign investment,
domestic investment, and expectations; ensure security in job, basic living needs, operations of market entities,
food and energy security, stable industrial and supply chains, and the normal functioning of primary-level
governments). These policies make the "employment" a top priority, which is evident in three measures. The first
is to expand employment in public sectors. The number of civil servants, governmental institutions, state-owned
enterprises and other recruitment increased by more than 20% year-on-year. The second is to expand admissions
of postgraduate students, college students applying for university study, students pursuing second bachelor's
degrees, and students aimed at vocational education, the number of whom has reached 1.7 million. These
measures indicate a clear expansion trend in the mid-term and long-term recruitment sector. In this case, the
education and training industry will still be developing at a medium and high speed in the next 5 to 10 years.
Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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Faced with the sudden outbreak of the pandemic, which had a huge impact on the operating environment, the
Company responded quickly and effectively to maximize the enterprise’s strengths of digital resources, to
considerably increase the total number of online classes, and to fully explore the potential of online and offline
curriculum integration, which not only ensures the continuity of operation and teaching, but also strengthens the
enterprise’s leading force of online and offline curriculum integration, an innovative product. Besides, the
Company continues to expand teacher-reserve and branches, focusing on the long-term expansion trend. Due to
the postponement of related examinations, part of the revenue was delayed for nearly 4 months, which made the
Company’s recognized operating revenue decreased during the reporting period, compared with the same period
of last year. With the resumption of all kinds of recruitment examinations, the Company has entered a period of
explosive growth.
The number of college graduates reached 8.74 million in this year of 2020, creating a new record. However, the
nationwide pandemic has further increased employment pressures. Two decades after the expansion of university
enrollment, the employment population structure has undergone significant changes, and the number of college
graduates has reached more than half of the total of new employees.The focus of stabilized employment will also
be shifted from the general job seekers to college graduates.
With the changes of the international situation, the central government put forward a new policy of internal
circulation; and an important support for the development of internal circulation is the new urbanization. The new
urbanization is not only the reconfirmation of the trend of mid-term and long-term urbanization, but also the
refinement of the urbanization path, which presents diverse patterns of urban clusters with different levels, such as
metropolitan areas, central cities, counties, featured towns ,etc, which can further expand the development
space.More importantly, the new urbanization will also be a deepening process and the most important aspect of
which is the deepening and upgrading of public services.Therefore, the following expansion of public sector’s
recruitment will be strongly guided by the new policy on internal circulation..
（1）The postponement of recruitment examinations result in the delay of income recognition, but the
trend of enrollment expansion is again confirmed.
The civil servant provincial joint examination was postponed for nearly 4 months, and other recruitment
examinations were also postponed to a certain extent in the first half of this year. In the case that the agreement
class accounted for a relatively high proportion, the delay of the examination resulted in a significant discrepancy
between the level of revenue recognition for the reporting period and that of actual operation.During the reporting
period, the Company achieved a total income of RMB 2,807,980,480.60 , down 22.80% from
RMB3,637,419,515.48 in the same period of last year.
Contrary to the decrease in recognized revenue, the number of students increased by 37.08% year-on-year, from
1,788,952 to 2,452,252 during the reporting period; the contract liabilities (advanced payment after deducting the
VAT ) was RMB 7,222,148,935.39, an increase of 31.50% over the same period of last year.
Normally, the first half of the year is an intensive period for civil service examinations. As a result of the
Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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pandemic, the focus of the civil service examinations was delayed by 3-4 months and moved back to the second
half of the year. Nevertheless, not only did the examination resume successfully, but the number of recruits also
achieved a more consistent or even higher growth rate than expected. Compared with civil servants recruitment,
there is much more room for recruitment in public services such as teachers, doctors and police. Therefore, the
reconfirmation of expansion trend in civil servants recruitment clearly indicates the expansion trend in the
recruitment of public service categories.
The key operating resources and performance indicators are shown in the table below:
Item Indicators
At the end of the
reporting period
At the end of last year
Change at the end of this
reporting period
compared with the end of
last year
Operating resources
Directly operated branches 1,335 1,104 20.92%
Employees 41,911 35,209 19.03%
R&D personnels 2,702 2,051 31.74%
Teaching professionals 18,036 13,475 33.85%
Item Indicators
At the end of the
reporting period
Same period last year
Year-on-year
change (%)
Business &
Revenues
Revenue of face-to-face
training (RMB)
1,622,095,227.36 3,167,825,822.38 -48.79%
Revenue of online training
(RMB)
1,166,091,772.30 444,519,141.21 162.33%
Training Students
2,452,252 1,788,952 37.08%
Revenue (RMB) 2,807,980,480.60 3,637,419,515.48 -22.80%
Net profits Attributable to
Shareholders of the
Company(RMB)
-233,026,645.16 493,025,465.15 -147.26%
（2）The outbreak of Covid-19 is preventable, controllable, and predictable, and the Company has
established a comprehensive response system as a countermeasure, which greatly enhanced its leading force
in education and training industry.
The outbreak of the pandemic has caused great distress to the whole education industry. With the advantages of
the enterprise’s platform and its excellent execution, the Company quickly created an effective response system,
which not only enabled itself to go through the special period smoothly, but also took the opportunity to expand its
Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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leading force and dominance.
In response to the problem that face-to-face teaching could not be carried out smoothly within a certain period of
time, the Company made every effort to explore the digital resources in the enterprise platform. With the
advantageous and standardized teaching and researching ability as a lever, digital penetration is carried out on the
main course products, which again strengthens the leading advantage of online and offline integrated curriculum,
so that more students can obtain the convenience of online learning and the effectiveness of face-to-face learning
at the same time. As a result, the number of students in the reporting period increased significantly.
After the second quarter, with the pandemic gradually put into normalized prevention and control, people all over
the country return to work and production. The second round of the epicemic in Beijing, Dalian and other places
has been controlled rapidly and effectively, which once again reflects the relevant judgment that the pandemic is
preventable, controllable and predictable.
（3）Focusing on the future long-term growth, the Company significantly expands talent reserve and
branches, though moving against general trend.
Based on a clearer med-term and long-term trends in recruitment expansion and the expectation that the pandemic
can be prevented and controlled, the company did not reduce the number of staff or eliminate branches but
considerably expanded talent reserve and the scale of branches.
At the end of this reporting period, the total number of employees of the company was 41911, an increase of 6,702
compared with 35,209 in 2019, an increase of 19.03%. Among them, there are 18,036 teaching professionals,
4,561 more than 13,475 in 2019, an increase of 33.85%. There are 2,702 full-time R&D personnels, 651 more
than 2,051 in 2019, an increase of 31.74%.
There are 1,335 outlets, 231 more than 1,104 in 2019, an increase of 20.92%.
（4） The “take-off action” of the new business sector has been fruitful, and the capacity of talent reserve
has been gradually released.
During the reporting period, new businesses such as postgraduate entrance examinations and medical services still
remained highly active, and new businesses seldom adopted the product model of agreement classes. The revenue
recognition was not affected by examination delays,thus driving the comprehensive sequence in which they were
located with revenue increased by 26.04% year-over-year increase.At the same time, as delays of recruitment
examinations led to a decrease in revenue recognition of the relevant sequences,the revenue share of integrated
sequence increased to 34.58 percent from 21.18 percent in the same period of last year .
Around 2019, the Company completed a round of intensive investments in resources of the active new businesses,
especially in key categories such as postgraduate entrance examinations to achieve the leading scale of core
teaching and research resources at one time.In addition, starting from the second half of 2019, the Company has
taken "take-off action" for the new business segments, investing more management resources in the new
businesses from the top level.
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The outbreak of the pandemic strengthened the Company's determination to expand its operations across sectors,
which also verified the rationality of strengthening the development of the marketing part for recruitment
examinations. As a result, the special actions have been further strengthened and deepened.It has also boosted the
current performance of related categories,and more importantly, further improved the overall layout advantages,
which is conducive to realizing the medium and long-term sector’s rotating growth trend.
In terms of the external situation, the academic qualification improvement sector has directly benefited from the
strengthening of the employment stabilization policy since the pandemic. The Ministry of Education has increased
its enrollment for further studies this year. The three expanded enrollments for postgraduates, undergraduates and
second bachelors will absorb more than 1.7 million people, including about 1.4 million fresh graduates. According
to relevant departments, 189,000 more graduate students will be admitted this year. It is estimated that the
enrollment expansion will exceed 20%. The enrollment expansion of ordinary junior college students is 322,000.
The enrollment expansion will mainly favor college applicants who will apply for majors that are promoted by
national strategy or urgently needed by the society; and the enrollment expansion will take place in colleges and
universities which are in the central and western regions and northeast China.
2. Matters related to financial statements
(1) Changes in accounting policy, estimation, and methods when compared to the previous financial period
√Applicable □ Not applicable
Content and reasons of changes in accounting policies Approval procedures Remarks
According to the revised Accounting Standards for
Business Enterprises No. 14 - Revenue (Accounting
[2017] No. 22) (hereinafter referred to as the new
revenue standard) issued by the Ministry of Finance
on July 5, 2017, the Company will implement the new
revenue standard from January 1, 2020.
Approved by the 10th
Meeting of the 5th Board of
Directors and the 9th
Meeting of the 5th Board of
Supervisors.
The Company adjusted the
amount of relevant items in
the opening financial
statements, not adjusting the
information in the
comparable periods.
(2) Explanation of ratification of major accounting error in the reporting period which needs to be tracked
and restated
□Applicable √ Not applicable
No ratification of major accounting error in the reporting period which needs to be tracked and restated.
(3) Explanation of changes in the scope of combined financial statements when compared with financial
statements of the previous year
√Applicable □ Not applicable
Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary
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The name of the subsidiary
Acquisition disposal of
subsidiaries during the
reporting period
Impact on overall
production operations
and performance
Shaanxi OFFCN Technology Co., Ltd. New establishment No major impact
Beijing OFFCN Future Education Technology Co., Ltd. New establishment No major impact
