Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Document And Entity Information | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2022 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-36363 |
Entity Registrant Name | Tarena International, Inc. |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 6/F, No. 1 Andingmenwai Street, Litchi Tower |
Entity Address, Address Line Two | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100011 |
Entity Address, Country | CN |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001592560 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Auditor Name | Marcum Asia CPAs LLP |
Auditor Firm ID | 5395 |
Auditor Location | Beijing China |
Business Contact | |
Document And Entity Information | |
Entity Address, Address Line One | 6/F, No. 1 Andingmenwai Street, Litchi Tower |
Entity Address, Address Line Two | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100011 |
Entity Address, Country | CN |
Contact Personnel Name | Ping Wei |
Contact Personnel Email Address | bjweiping@tedu.cn |
Ordinary Shares | |
Document And Entity Information | |
Entity Common Stock, Shares Outstanding | 53,773,951 |
Class A ordinary shares | |
Document And Entity Information | |
Title of 12(b) Security | Class A ordinary shares |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 46,567,892 |
No Trading Symbol Flag | true |
ADS | |
Document And Entity Information | |
Title of 12(b) Security | American Depositary Shares |
Trading Symbol | TEDU |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 10,608,950 |
Class B ordinary shares | |
Document And Entity Information | |
Entity Common Stock, Shares Outstanding | 7,206,059 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 356,237 | $ 51,650 | ¥ 423,766 |
Time deposits | 6,277 | 910 | 6,257 |
Restricted cash | 17,730 | 2,571 | 255 |
Accounts receivable, net of allowance for doubtful accounts | 68,733 | 9,965 | 48,458 |
Amounts due from related parties | 698 | 101 | 839 |
Asset held for sale | 106,539 | 15,447 | |
Prepaid expenses and other current assets | 111,339 | 16,142 | 139,757 |
Total current assets | 667,553 | 96,786 | 619,332 |
Time deposits-non current | 228 | 33 | 123 |
Accounts receivable, net of allowance for doubtful accounts-non current | 182 | 26 | 90 |
Amounts due from related parties-non current | 701 | 102 | 683 |
Property and equipment, net | 122,834 | 17,809 | 299,441 |
Intangible assets, net | 7,542 | 1,093 | 9,906 |
Right-of-use assets | 350,501 | 50,818 | 495,936 |
Goodwill | 52,782 | 7,653 | 52,782 |
Long-term investments, net | 46,183 | 6,696 | 46,449 |
Deferred income tax assets | 40,127 | 5,818 | 41,000 |
Other non-current assets, net | 48,867 | 7,085 | 76,040 |
Total assets | 1,337,500 | 193,919 | 1,641,782 |
Current liabilities: | |||
Short-term bank loans | 52,000 | 7,539 | 30,000 |
Accounts payable | 6,330 | 918 | 8,914 |
Amounts due to related parties | 87 | 13 | 554 |
Operating lease liabilities-current | 197,969 | 28,703 | 239,937 |
Income taxes payable | 108,434 | 15,721 | 89,000 |
Deferred revenue- current | 1,688,610 | 244,825 | 2,008,078 |
Accrued expenses and other current liabilities | 603,516 | 87,502 | 563,603 |
Total current liabilities | 2,656,946 | 385,221 | 2,940,086 |
Deferred revenue- non current | 14,051 | 2,037 | 16,774 |
Operating lease liabilities-non current | 168,736 | 24,464 | 272,575 |
Other non-current liabilities | 4,448 | 645 | 4,767 |
Total liabilities | 2,844,181 | 412,367 | 3,234,202 |
Commitments and contingencies | |||
Deficit: | |||
Additional paid-in capital | 1,363,845 | 197,739 | 1,347,205 |
Accumulated other comprehensive income | 49,664 | 7,201 | 48,699 |
Accumulated deficit | (2,436,918) | (353,320) | (2,520,438) |
Total deficit attributable to the shareholders of Tarena International, Inc. | (1,499,894) | (217,464) | (1,583,920) |
Non-controlling interest | (6,787) | (984) | (8,500) |
Total liabilities and shareholders' deficit | 1,337,500 | 193,919 | 1,641,782 |
Class A ordinary shares | |||
Deficit: | |||
Ordinary shares | 359 | 52 | 355 |
Treasury shares (7,199,870 and 10,608,950 Class A ordinary shares as of December 31, 2021 and 2022, at cost) | (476,918) | (69,147) | (459,815) |
Class B ordinary shares | |||
Deficit: | |||
Ordinary shares | ¥ 74 | $ 11 | ¥ 74 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class A ordinary shares | ||
Ordinary shares | ||
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Authorized | 860,000,000 | 860,000,000 |
Issued | 57,176,842 | 56,593,157 |
Outstanding | 46,567,892 | 49,393,287 |
Treasury shares | 10,608,950 | 7,199,870 |
Class B ordinary shares | ||
Ordinary shares | ||
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Authorized | 40,000,000 | 40,000,000 |
Issued | 7,206,059 | 7,206,059 |
Outstanding | 7,206,059 | 7,206,059 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) ¥ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 CNY (¥) ¥ / shares | Dec. 31, 2020 CNY (¥) ¥ / shares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Net revenues | ¥ 2,468,074 | $ 357,837 | ¥ 2,386,520 | ¥ 1,897,883 |
Cost of revenues | (1,056,043) | (153,112) | (1,201,419) | (1,066,842) |
Gross profit | 1,412,031 | 204,725 | 1,185,101 | 831,041 |
Selling and marketing expenses | (642,937) | (93,217) | (878,130) | (906,337) |
General and administrative expenses | (604,028) | (87,576) | (569,985) | (630,618) |
Research and development expenses | (72,028) | (10,443) | (106,098) | (100,466) |
Operating (loss) income | 93,038 | 13,489 | (369,112) | (806,380) |
Interest income (expense), net | 2,700 | 391 | 2,335 | (199) |
Other income | 11,283 | 1,636 | 5,572 | 5,201 |
Foreign currency exchange loss, net | (954) | (138) | (518) | (4,849) |
(Loss) income before income taxes | 106,067 | 15,378 | (361,723) | (806,227) |
Income tax benefit (expense) | (20,834) | (3,021) | (114,057) | 35,034 |
Net (loss) income | 85,233 | 12,357 | (475,780) | (771,193) |
Less: Net (loss) income attributable to non-controlling interests | 1,713 | 248 | (1,233) | (4,550) |
Net (loss) income attributable to Class A and Class B ordinary shareholders | ¥ 83,520 | $ 12,109 | ¥ (474,547) | ¥ (766,643) |
Basic (loss) income per ADS | (per share) | ¥ 7.64 | $ 1.11 | ¥ (42.17) | ¥ (70.54) |
Diluted (loss) income per ADS | (per share) | ¥ 7.23 | $ 1.05 | ¥ (42.17) | ¥ (70.54) |
Net (loss) income | ¥ 85,233 | $ 12,357 | ¥ (475,780) | ¥ (771,193) |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustment | 965 | 140 | (421) | (2,266) |
Comprehensive (loss) income | 86,198 | 12,497 | (476,201) | (773,459) |
Less: Comprehensive (loss) income attributable to non-controlling interests | 1,713 | 248 | (1,233) | (4,550) |
Comprehensive (loss) income attributable to Class A and Class B ordinary shareholders | ¥ 84,485 | $ 12,249 | ¥ (474,968) | ¥ (768,909) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
Share-based compensation expense | ¥ (16,537) | $ (2,398) | ¥ (19,103) | ¥ (36,246) |
Cost of revenues | ||||
Share-based compensation expense | (325) | (47) | (70) | (379) |
Selling and marketing expenses | ||||
Share-based compensation expense | (1,388) | (201) | (2,785) | (1,842) |
General and administrative expenses | ||||
Share-based compensation expense | (12,296) | (1,783) | (14,840) | (26,242) |
Research and development expenses | ||||
Share-based compensation expense | ¥ (2,528) | $ (367) | ¥ (1,408) | ¥ (7,783) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT ¥ in Thousands | Ordinary Shares Class A ordinary shares CNY (¥) shares | Ordinary Shares Class A ordinary shares USD ($) shares | Ordinary Shares Class B ordinary shares CNY (¥) shares | Ordinary Shares Class B ordinary shares USD ($) shares | Treasury Shares CNY (¥) | Additional Paid-in Capital CNY (¥) | Accumulated Other Comprehensive Income (Loss) CNY (¥) | Accumulated deficit CNY (¥) | Non- controlling Interest CNY (¥) | CNY (¥) | USD ($) |
Balance at Dec. 31, 2019 | ¥ 337 | ¥ 74 | ¥ (457,169) | ¥ 1,284,573 | ¥ 51,386 | ¥ (1,279,248) | ¥ (3,017) | ¥ (403,064) | |||
Balance (In shares) at Dec. 31, 2019 | shares | 53,806,534 | 53,806,534 | 7,206,059 | 7,206,059 | |||||||
Net (loss) income | (766,643) | (4,550) | (771,193) | ||||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares | ¥ 12 | 3,342 | 3,354 | ||||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares (In shares) | shares | 1,739,720 | 1,739,720 | |||||||||
Foreign currency translation adjustment | (2,266) | (2,266) | |||||||||
Non-controlling interest contribution | 300 | 300 | |||||||||
Share-based compensation | 36,246 | 36,246 | |||||||||
Treasury shares | (2,646) | (2,646) | |||||||||
Balance at Dec. 31, 2020 | ¥ 349 | ¥ 74 | (459,815) | 1,324,161 | 49,120 | (2,045,891) | (7,267) | (1,139,269) | |||
Balance (In shares) at Dec. 31, 2020 | shares | 55,546,254 | 55,546,254 | 7,206,059 | 7,206,059 | |||||||
Net (loss) income | (474,547) | (1,233) | (475,780) | ||||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares | ¥ 6 | ¥ 0 | 0 | 3,941 | 0 | 0 | 0 | 3,947 | |||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares (In shares) | shares | 1,046,903 | 1,046,903 | 0 | 0 | |||||||
Foreign currency translation adjustment | ¥ 0 | $ 0 | ¥ 0 | $ 0 | 0 | 0 | (421) | 0 | 0 | (421) | |
Share-based compensation | 19,103 | 19,103 | |||||||||
Balance at Dec. 31, 2021 | ¥ 355 | ¥ 74 | (459,815) | 1,347,205 | 48,699 | (2,520,438) | (8,500) | (1,592,420) | |||
Balance (In shares) at Dec. 31, 2021 | shares | 56,593,157 | 56,593,157 | 7,206,059 | 7,206,059 | |||||||
Net (loss) income | 83,520 | 1,713 | 85,233 | $ 12,357,000 | |||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares | ¥ 4 | 103 | 107 | ||||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares (In shares) | shares | 583,685 | 583,685 | |||||||||
Foreign currency translation adjustment | 965 | 965 | $ 140,000 | ||||||||
Share-based compensation | 16,537 | 16,537 | |||||||||
Treasury shares | (17,103) | (17,103) | |||||||||
Balance at Dec. 31, 2022 | ¥ 359 | ¥ 74 | ¥ (476,918) | ¥ 1,363,845 | ¥ 49,664 | ¥ (2,436,918) | ¥ (6,787) | ¥ (1,506,681) | |||
Balance (In shares) at Dec. 31, 2022 | shares | 57,176,842 | 57,176,842 | 7,206,059 | 7,206,059 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
Operating activities: | ||||
Net (loss) income | ¥ 85,233 | $ 12,357 | ¥ (475,780) | ¥ (771,193) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 94,046 | 13,635 | 125,305 | 177,478 |
Amortization of operating lease right-of-use asset | 172,912 | 25,070 | 250,041 | 170,022 |
Bad debt provision | 37,866 | 5,490 | 5,773 | 13,900 |
Loss on disposal of property and equipment | 12,788 | 1,854 | 24,669 | 3,303 |
Deferred income tax (benefit) expense | 873 | 127 | 101,220 | (42,431) |
Share based compensation expense | 16,537 | 2,398 | 19,103 | 36,246 |
Investment (income) loss | (4,542) | (659) | (1,375) | 77 |
Foreign currency exchange loss, net | 954 | 138 | 518 | 4,849 |
Changes in operating assets and liabilities | ||||
Accounts receivable | (35,785) | (5,188) | (21,339) | (7,779) |
Amounts due from related parties | 186 | 27 | (1,217) | (252) |
Prepaid expenses and other current assets | (3,944) | (572) | 18,124 | (1,511) |
Other non-current assets | 33,887 | 4,913 | 13,887 | 14,549 |
Accounts payable | 975 | 141 | (156) | 821 |
Amounts due to related parties | (468) | (68) | 374 | (58) |
Income taxes payable | 19,434 | 2,818 | 12,183 | 7,146 |
Deferred revenue | (322,191) | (46,713) | 26,654 | 412,228 |
Accrued expenses and other current liabilities | 37,314 | 5,410 | 163,292 | 2,289 |
Operating lease liabilities | (173,284) | (25,124) | (252,351) | (128,186) |
Other non-current liabilities | (319) | (46) | (315) | (319) |
Net cash (used in) provided by operating activities | (27,528) | (3,992) | 8,610 | (108,821) |
Investing activities: | ||||
Purchase of property and equipment and intangible assets | (38,768) | (5,621) | (67,694) | (79,414) |
Proceeds from disposal of property and equipment | 807 | 117 | 85,083 | 7,909 |
Purchase of long-term investments | (3,000) | (435) | (4,000) | |
Proceeds from disposal of long-term investment | 17,975 | 2,606 | 9,500 | |
Purchase of time deposits | (120) | (17) | (50,129) | (94,426) |
Proceeds from maturity of time deposits | 50,000 | 171,660 | ||
Issuance of loans to employees | (402) | (8,782) | ||
Proceeds from repayment of loans to employees | 397 | 58 | 7,335 | 6,396 |
Net cash (used in) provided by investing activities | (22,709) | (3,292) | 33,693 | (657) |
Financing activities: | ||||
Proceeds from bank borrowing | 52,000 | 7,539 | 30,000 | 10,710 |
Contribution from non-controlling entities | 300 | |||
Repayment of bank borrowings | (30,000) | (4,350) | (10,710) | (89,162) |
Collection of loan from a related party | 6,499 | |||
Issuance of Class A ordinary shares in connection with exercise of share options | 107 | 16 | 3,947 | 3,354 |
Prepayments of acquire noncontrolling interests | (7,109) | (1,031) | ||
Repurchase of treasury shares | (17,103) | (2,480) | ||
Net cash (used in) provided by financing activities | (2,105) | (306) | 23,237 | (68,299) |
Changes in cash, cash equivalents and restricted cash | (52,342) | (7,590) | 65,540 | (177,777) |
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash | 2,288 | 332 | (67) | (1,376) |
Net change in cash, cash equivalents and restricted cash | (50,054) | (7,258) | 65,473 | (179,153) |
Cash, cash equivalents and restricted cash at beginning of year | 424,021 | 61,479 | 358,548 | 537,701 |
Cash and cash equivalents | 356,237 | 423,766 | 320,179 | |
Restricted cash | 17,730 | 255 | 38,369 | |
Cash, cash equivalents and restricted cash at end of year | 373,967 | 54,221 | 424,021 | 358,548 |
Supplemental disclosure of cash flow information: | ||||
Income taxes paid | 527 | 76 | 654 | 615 |
Interest paid | 1,497 | 217 | 463 | 4,954 |
Non-cash investing and financing activities: | ||||
Accrual for purchase of equipment | 4,398 | 638 | 7,957 | 9,180 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | ¥ 112,966 | $ 16,379 | ¥ 185,875 | ¥ 484,202 |
DESCRIPTION OF BUSINESS, ORGANI
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | 12 Months Ended |
Dec. 31, 2022 | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (a) Description of business Tarena International, Inc. (“Tarena International”), through its wholly-owned subsidiaries and consolidated variable interest entities or VIEs (collectively referred to hereinafter as the “Company”), is principally engaged in providing professional education services including professional information technology (“IT”) training courses and non-IT training courses across the People’s Republic of China (“PRC”). The Company is also engaged mainly in providing IT-focused supplementary STEAM education service for students aged between three and eighteen. All of the Company’s operations are located in the PRC with nearly all of its customers located in the PRC. (b) Organization Tarena International is a holding company that was incorporated in the Cayman Islands on October 8, 2003 by Mr. Shaoyun Han (“Mr. Han”), the founder and former chief executive officer of the Company, and five other individuals. Tarena International is the parent company of a number of wholly-owned subsidiaries that are engaged in the provision of educational products and services. The Company’s education services in certain locations of the PRC were previously conducted through Beijing Tarena Jinqiao Technology Co., Ltd. (“Beijing Tarena”) and Beijing Tongcheng Shidai Jinqiao Technology Co., Ltd. (“Tongcheng Jinqiao”), and their subsidiaries, in order to comply with PRC laws and regulations which restricted foreign investments in companies that were engaged in education products and services. Pursuant to the VIE Agreement as described below, Tarena International has effective financial control over Beijing Tarena, Tongcheng Jinqiao and their initial capital funding were provided by Tarena Technologies Inc., (a wholly-owned subsidiary of Tarena International or “Tarena Tech”, formerly known as Beijing Tarena Technology Co., Ltd.) and Tongcheng Shidai Technology Inc., (a wholly-owned subsidiary of Tarena International or “Tongcheng Shidai”, formerly known as Tongcheng Shidai Technology Co., Ltd.). The recognized and unrecognized revenue-producing assets that were held by Beijing Tarena, Tongcheng Jinqiao and their subsidiaries primarily consists of property and equipment, operating leases for the learning premises, ICP license, www.tmooc.cn website and assembled workforce in those learning centers. All of the equity interests of Beijing Tarena are legally held by Mr. Han and Mr. Jianguang Li (“Mr. Li”), a director of Tarena International. Both individuals are nominee equity holders of Beijing Tarena and holding their equity interests on behalf of Tarena International. Through a series of contractual agreements and arrangements (the “VIE Agreement”), among Tarena International, Tarena Tech, Beijing Tarena and its nominee equity holders, the nominee equity holders of Beijing Tarena have granted all their legal rights including voting rights and disposition rights of their equity interests in Beijing Tarena to Tarena International. The nominee equity holders of Beijing Tarena do not participate significantly in income and loss and do not have the power to direct the activities of Beijing Tarena that most significantly impact its economic performance. Accordingly, Beijing Tarena and its subsidiaries are considered as VIEs. Meanwhile, all of the equity interests of Tongcheng Jinqiao are legally held by Mr. Han and Mr. Shenghuan Feng (“Mr. Feng”), a manager of Tarena International. Both individuals are nominee equity holders of Tongcheng Jinqiao and holding their equity interests on behalf of Tarena International. Through a series of contractual agreements and arrangements (the “VIE Agreement”), among Tarena International, Tongcheng Shidai, Tongcheng Jinqiao and its nominee equity holders, the nominee equity holders of Tongcheng Jinqiao have granted all their legal rights including voting rights and disposition rights of their equity interests in Tongcheng Jinqiao to Tarena International. The nominee equity holders of Tongcheng Jinqiao do not participate significantly in income and loss and do not have the power to direct the activities of Tongcheng Jinqiao that most significantly impact its economic performance. Accordingly, Tongcheng Jinqiao and its subsidiaries are considered as VIEs. In accordance with Accounting Standards Codification (“ASC”) 810-10-25-38A, Tarena International has a controlling financial interest in Beijing Tarena and Tongcheng Jinqiao because Tarena International has (i) the power to direct activities of Beijing Tarena and Tongcheng Jinqiao that most significantly impact the economic performance of Beijing Tarena and Tongcheng Jinqiao; and (ii) the obligation to absorb the expected losses and the right to receive expected residual return of Beijing Tarena and Tongcheng Jinqiao that could potentially be significant to Beijing Tarena and Tongcheng Jinqiao. Thus, Tarena International is the primary beneficiary of the Beijing Tarena and Tongcheng Jinqiao. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) Under the terms of the VIE Agreement, Tarena International has (i) the right to receive economic benefits that could potentially be significant to Beijing Tarena and Tongcheng Jinqiao in the form of service fees under the exclusive business cooperation agreements; (ii) the right to receive all dividends declared by Beijing Tarena and Tongcheng Jinqiao, and the right to all undistributed earnings of Beijing Tarena and Tongcheng Jinqiao; and (iii) the right to receive the residual benefits of Beijing Tarena and Tongcheng Jinqiao through their exclusive option to acquire 100% of the equity interests in Beijing Tarena and Tongcheng Jinqiao, to the extent permitted under PRC law. Accordingly, Tarena International is the primary beneficiary of Beijing Tarena and Tongcheng Jinqiao, and the financial statements of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries are consolidated in Tarena International’s consolidated financial statements. Under the terms of the VIE Agreement, Beijing Tarena and Tongcheng Jinqiao’s nominee equity holders have no rights to the net assets nor have the obligations to fund the deficit, and such rights and obligations have been vested to Tarena International. All of the equity (net assets) and net income of Beijing Tarena and Tongcheng Jinqiao are attributed to Tarena International. The key terms of the VIE Agreement are as follows: Loan Agreements: Meanwhile, Tongcheng Shidai provided RMB5,000 loans in aggregate to Tongcheng Jinqiao’s nominee equity holders for the sole purpose of their contribution of Tongcheng Jinqiao’s registered capital. The nominee equity holders of Tongcheng Jinqiao can only repay the loans by transferring all of their legal equity interest in Tongcheng Jinqiao to the Tongcheng Shidai or its designated representatives pursuant to the exclusive option agreements. The loans shall be interest-free, unless the transfer price exceeds the principal of the loans when each nominee equity holder of Tongcheng Jinqiao transfers his equity interests in Tongcheng Jinqiao to Tarena International or its designated representatives. Such excess over the principal of the loan shall be deemed as the interest of the loans to the extent permitted under the PRC law. The initial term of the loans, which will be expired in 2032, can be extended with the written notice of both the Tongcheng Shidai and Tongcheng Jinqiao before expiration. Exclusive Option Agreements: 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) Meanwhile, each of the nominee equity holders irrevocably granted the Tongcheng Shidai or its designated representatives an exclusive option to purchase, to the extent permitted under PRC law, all or part of his equity interests in Tongcheng Jinqiao. In addition, Tongcheng Shidai has the option to acquire the equity interests of Tongcheng Jinqiao for a specified price equal to the loan provided by the Tongcheng Shidai to the nominee equity holders. If the lowest price permitted under PRC law is higher than the above price, the lowest price permitted under PRC law shall apply. Without the Tongcheng Shidai’s prior written consent, the nominee equity holders shall not sell, transfer, mortgage, or otherwise dispose any equity interests in Tongcheng Jinqiao. These agreements will remain effective until all equity interests held in Tongcheng Jinqiao by the nominee equity holders are transferred or assigned to the Tongcheng Shidai or its designated representatives. Exclusive Business Cooperation Agreement: Meanwhile, Tongcheng Shidai has the exclusive right to provide comprehensive technical support, consulting services and other services to Tongcheng Jinqiao agree to accept all the consultation and services provided by Tongcheng Shidai. Without Tongcheng Shidai’s prior written consent, Tongcheng Jinqiao is prohibited establish similar corporation relationship with any third party to provide any of the services under this agreement. In addition, Tongcheng Shidai has exclusive and proprietary ownership, rights and interests in any and all intellectual properties arising out of or created during the performance of this agreement. Tongcheng Jinqiao agrees to pay a monthly service fee to Tongcheng Shidai at an amount determined solely by Tongcheng Shidai after taking into account factors including the complexity and difficulty of the services provided, title of and time consumed by Tongcheng Shidai employees providing services to Tongcheng Jinqiao, the value of services provided, the market price of the same type of services and the operating conditions of Tongcheng Jinqiao. The term of the agreement will remain effective unless Tongcheng Shidai terminates the agreement in writing or a relevant governmental authority rejects the renewal applications by Tongcheng Jinqiao or Tongcheng Shidai to renew its respective business license upon expiration. Tongcheng Jinqiao is not permitted to terminate this agreement in any event unless required by applicable laws. Power of Attorney: 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) Meanwhile, each nominee equity holder of Tongcheng Jinqiao appointed Tongcheng Shidai as the attorney-in-fact to act on all matters pertaining to Tongcheng Jinqiao and to exercise all of their rights as an equity holder of Tongcheng Jinqiao, including but not limited to attend shareholders’ meetings, vote on their behalf on all matters of Tongcheng Jinqiao requiring shareholders’ approval under PRC laws and regulations and the articles of association of Tongcheng Jinqiao, designate and appoint directors and senior management members. Tongcheng Shidai may authorize or assign its rights under this appointment to any other person or entity at its sole discretion without prior notice to the nominee equity holders of Tongcheng Jinqiao. Each power of attorney will remain effective until the nominee equity holder ceases to hold any equity interest in Tongcheng Jinqiao. Equity Interest Pledge Agreements: Pursuant to the share pledge agreement, Tongcheng Jinqiao’s nominee equity holders pledged all of their shares in Tongcheng Jinqiao to Tongcheng Shidai to guarantee their performance of the obligations under the contractual arrangements including but not limited to, the service fees due to Tongcheng Shidai. If Tongcheng Jinqiao is liquidated or dissolved under PRC law, Tongcheng Shidai, as the pledgee, has the right receive any interest distributed by Tongcheng Jinqiao. Tongcheng Shidai has the right to receive dividends generated by the pledged equity interests during the term of the pledge. Without the written consent of Tongcheng Shidai, the rights and obligations under this agreement is prohibited to assign or delegated. The equity interest pledge agreements became effective on the date when the agreements were duly executed. The pledge was registered with the relevant local administration for industry and commerce in 2022 and will remain binding until Tongcheng Jinqiao and its nominee equity holders have fully performed all contract obligations and fully paid all secured indebtedness under the contractual arrangements. Tarena International relies on the VIE Agreement to operate and control the Beijing Tarena and Tongcheng Jinqiao. However, these contractual arrangements may not be as effective as direct equity ownership in providing Tarena International with control over Beijing Tarena and Tongcheng Jinqiao. Any failure by Beijing Tarena and Tongcheng Jinqiao or the nominee equity holders to perform their obligations under the VIE Agreement would have a material adverse effect on the consolidated financial position and consolidated financial performance of the Company. All the VIE Agreement is governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these agreements would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal system in the PRC is not as developed as some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit Tarena International’s ability to enforce these contractual arrangements. In addition, if the legal structure and the VIE Agreement was found to be in violation of any existing or future PRC laws and regulations, Tarena International may be subject to fines or other legal or administrative sanctions. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) In the opinion of management, based on the legal opinion obtained from the Company’s PRC legal counsel, the above contractual arrangements are legally binding and enforceable and do not violate current PRC laws and regulations. However, there are uncertainties regarding the interpretation and application of existing and future PRC laws and regulations. Accordingly, Tarena International cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to its opinion. If the current ownership structure of the Company and the VIE Agreement is found to be in violation of any existing or future PRC laws and regulations, the PRC government could: ● revoke the business and operating licenses of Tarena Tech and Tongcheng Shidai, their subsidiaries, Beijing Tarena and Tongcheng Jinqiao; ● discontinue or restrict the conduct of any transactions between Tarena Tech and Tongcheng Shidai, their subsidiaries, Beijing Tarena and Tongcheng Jinqiao; ● impose fines, confiscate the income from Beijing Tarena and Tongcheng Jinqiao, or impose other requirements with which the Company may not be able to comply; ● require Tarena International to restructure its ownership structure or operations, including terminating the contractual arrangements with Beijing Tarena and Tongcheng Jinqiao, and deregistering the equity pledges of Beijing Tarena and Tongcheng Jinqiao; and ● restrict or prohibit the use of the proceeds of future offering to finance the Company’s business and operations in the PRC. If the imposition of any of these government actions causes Tarena International to lose its right to direct the activities of Beijing Tarena and Tongcheng Jinqiao or their rights to receive substantially all the economic benefits and residual returns from Beijing Tarena, Tongcheng Jinqiao and Tarena International is not able to restructure its ownership structure and operations in a satisfactory manner, Tarena International would no longer be able to consolidate the financial results of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries. In the opinion of management, the likelihood of deconsolidation of the Beijing Tarena, Tongcheng Jinqiao and their subsidiaries is remote based on current facts and circumstances. The equity interests of Beijing Tarena are legally held by Mr. Han and Mr. Li as nominee equity holders on behalf of the Company. Mr. Han and Mr. Li are also directors of Tarena International. Mr. Han and Mr. Li each holds 69.0% and 0.3% of the total voting rights of Tarena International as of December 31, 2022, respectively, assuming the exercise of all outstanding options held by Mr. Han and Mr. Li as of such date. Meanwhile, Mr. Han held 70% voting power and was the ultimate controlling shareholder of Tongcheng Jinqiao and he held 67.2% and 69.0% voting power in Tarena International on 31 December, 2021 and 2022, respectively. The Company cannot assure that when conflicts of interest arise, either of the nominee equity holders will act in the best interests of the Company or such conflicts will be resolved in the Company’s favor. Currently, the Company does not have any arrangements to address potential conflicts of interest between the nominee equity holders and the Company, except that Tarena International could exercise the purchase option under the exclusive option agreements with the nominee equity holders to request them to transfer all of their equity ownership in Beijing Tarena and Tongcheng Jinqiao to a PRC entity or individual designated by Tarena International. The Company relies on the nominee equity holders, who are both Tarena International’s directors and who owe a fiduciary duty to Tarena International, to comply with the terms and conditions of the contractual arrangements. Such fiduciary duty requires directors to act in good faith and in the best interests of Tarena International and not to use their positions for personal gains. If the Company cannot resolve any conflict of interest or dispute between the Company and the nominee equity holders of Beijing Tarena and Tongcheng Jinqiao, the Company would have to rely on legal proceedings, which could result in disruption of the Company’s business and subject the Company to substantial uncertainty as to the outcome of any such legal proceedings. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) The Company’s involvement with Beijing Tarena and Tongcheng Jinqiao under the VIE Agreement affected the Company’s consolidated financial position, results of operations and cash flows as indicated below. The assets and liabilities of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries that were included in the accompanying consolidated financial statements as of December 31, 2021 and 2022 are as follows: December 31, 2021 2022 RMB RMB Cash 8,204 29,567 Amounts due from Tarena International and its wholly-owned subsidiaries 141,104 106,922 Amounts due from a related party 4 4 Prepaid expenses and other current assets 27,435 10,602 Total current assets 176,747 147,095 Property and equipment, net 2,801 3,009 Long term investments, net 29,880 27,000 Right-of-use assets 11,108 8,738 Other non-current assets 1,057 647 Total assets 221,593 186,489 Short-term bank loans — 20,000 Accounts payable 320 42 Deferred revenue-current 167,224 166,542 Operating lease liabilities-current 3,949 4,124 Income taxes payable 2,045 1,213 Accrued expenses and other current liabilities 22,344 14,537 Amounts due to Tarena International and its wholly-owned subsidiaries 56,052 7,631 Total current liabilities 251,934 214,089 Deferred revenue-non current 134 135 Operating lease liabilities-non current 5,953 4,176 Other non-current liabilities 122 122 Total liabilities 258,143 218,522 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) The financial performance and cash flows of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries that were included in the accompanying consolidated financial statements before elimination of intercompany balances and transactions between the parent company, non-VIE subsidiaries, VIEs and VIEs’ subsidiaries for the years ended December 31, 2020, 2021 and 2022 are as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Net revenues 127,043 140,541 158,347 Net (loss) income 32,869 (39,072) 1,255 Net cash provided by operating activities 112,106 10,308 7,722 Net cash provided by investing activities — — 19,975 Net cash (used in) provided by financing activities (110,985) (3,437) 5,762 All of the assets of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries can be used only to settle obligations of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries. None of the assets of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries have been pledged or collateralized. The creditors of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries do not have recourse to the general credit of Tarena International and its wholly-owned subsidiaries. Assets of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries that can be used only to settle obligations of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries and liabilities of Beijing Tarena, Tongcheng Jinqiao and their subsidiaries for which creditors (or beneficial interest holders) do not have recourse to the general credit of Tarena International and its wholly owned subsidiaries have been presented parenthetically alongside each balance sheet caption on the face of the consolidated balance sheets. During the periods presented, Tarena International and its wholly-owned subsidiaries provided financial support to Beijing Tarena and Tongcheng Jinqiao that it was not previously contractually required to provide in the form of advances. To the extent Beijing Tarena and Tongcheng Jinqiao requires financial support, pursuant to the exclusive business cooperation agreement, Tarena Tech and Tongcheng Shidai may, at its option and to the extent permitted under the PRC law, provide such support to Beijing Tarena and Tongcheng Jinqiao through loans to Beijing Tarena and Tongcheng Jinqiao’s nominee equity holders or entrustment loans to Beijing Tarena and Tongcheng Jinqiao. (c) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). (d) Convenience translation All amounts in the accompanying consolidated financial statements and notes are expressed in Renminbi (“RMB”). Amounts in United States dollars (“US$”) are presented solely for the convenience of readers and use an exchange rate of US$1.00 = RMB6.8972, representing the exchange rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board as of December 30, 2022. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (e) Significant concentrations and risks Revenue concentration A substantial portion of the Company’s total net revenues were generated from Childhood & adolescent Robotics Programming, Childhood & adolescent Computer Programming, Java, and Digital Arts courses. The percentages of the Company’s total net revenues from Childhood & adolescent Robotics Programming, Childhood & adolescent Computer Programming, Java, and Digital Arts courses are as follows: Year Ended December 31, 2020 2021 2022 Childhood & adolescent Robotics Programming 15.7 % 27.9 % 30.3 % Childhood & adolescent Computer Programming 20.6 % 19.4 % 20.4 % Java 13.8 % 11.8 % 10.3 % Digital Arts 16.8 % 11.0 % 6.2 % Total 66.9 % 70.1 % 67.2 % The Company expects net revenues from these four training courses to continue to represent a majority portion of its total net revenues in the future. Negative factors that adversely affect net revenues generated by these four training courses will have a material adverse effect on the Company’s business, financial condition and results of operations. There were no other courses that represented net revenues greater than 10% of total net revenues. The portion of the Company’s adult students financed their tuition fees through the loans offered to them by financial service providers, including Baidu Small Loan Co., Ltd., Bank of China Consumer Finance Co., Ltd., Shanghai Shimiao Financial Information Service Co., Ltd. (formerly known as “Beijing Ronglian Shiji Information Technology Co., Ltd.”), Beijing Youfei Jinxin Digital Technology Co., Ltd., Qihao Commercial Factoring Co. Ltd., and Chongqing Haier Small Loan Co. Ltd during the 3-year periods ended December 31, 2022 has decreased significantly. The Company expects the number of students financed by these financial service providers to represent a minor portion of its total students in the future. Therefore, negative factors that adversely affect these financial service providers will have no material adverse effect on the Company’s business, financial condition and results of operations. Geographic concentration The percentages of the Company’s total net revenues generated from its business operations in Beijing are 17.2%, 16.2% and 14.5% for the years ended December 31, 2020, 2021 and 2022, respectively, and in Hangzhou are 13.9%, 11.1% and 10.2% for the years ended December 31, 2020, 2021 and 2022, respectively. The Company expects revenues derived from its business operations in Beijing and Hangzhou to continue to be greater than 10% of total net revenues in the future. Negative factors that adversely affect its business operations in Beijing or Hangzhou will have a material adverse effect on the Company’s business, financial condition and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Principles of consolidation The consolidated financial statements include the financial statements of Tarena International, its wholly-owned subsidiaries, and VIEs which Tarena International is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant intercompany balances and transactions have been eliminated upon consolidation. (b) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include goodwill impairment and long term investments, the allowance for credit losses of accounts receivable, amounts due from related parties, prepaid expenses and other current assets and other non-current assets, the realizability of deferred income tax assets, the accruals for other contingencies, the useful lives of property and equipment and the recoverability of the carrying amounts of property and equipment and right-of-use assets. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. To allocate the transaction price for contracts with multiple deliverables and estimate the standalone selling price, the Company considers market data, including its pricing strategies for the products being evaluated and other similar products it offers, competitor pricing to the extent data is available, and costs to determine whether the estimated selling price yields an appropriate profit margin. (c) Foreign currency The functional currency of Tarena International and Tarena Hong Kong Limited (“Tarena HK”) is the USD. The functional currency of Techarena Canada Inc. is the Canadian Dollar (“CAD”). The functional currency of Taiwan Tarena Counseling Software Co., Ltd. is the Taiwan New Dollar (“TWD”). The functional currency of Tarena International’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIE is the RMB. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rate at the balance sheet date. The resulting exchange differences are recorded in foreign currency exchange loss in the consolidated statements of comprehensive loss. Assets and liabilities of entities with functional currencies other than RMB are translated into RMB using the exchange rate on the balance sheet date. Revenues and expenses are translated into RMB at average rates prevailing during the reporting period. The resulting foreign currency translation adjustment are recorded in accumulated other comprehensive loss within shareholders’ equity. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Foreign currency (Continued) Since the RMB is not a fully convertible currency, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. (d) Cash, cash equivalents, restricted cash and time deposits Cash consists of cash in bank and deposits placed in third party payment processors of Alipay, Wechat wallet and Baidu wallet, which are unrestricted as to withdrawal. Cash equivalents consist of interest-bearing certificates of deposit with initial term of no more than three months when purchased. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. As of December 31, 2022, restricted cash was the bank acceptances at maturity March 1, 2023, frozen foreign exchange and letter of guarantee. Cash, cash equivalents, time deposits and restricted cash maintained at financial institutions consist of the following: December 31, 2021 2022 RMB RMB RMB denominated bank deposits with financial institutions in the PRC 405,296 377,040 US dollar denominated bank deposits with financial institutions in the PRC 1,234 743 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 22,001 574 HK dollar denominated bank deposits with financial institutions in HK SAR 64 37 RMB denominated bank deposits with a financial institution in HK SAR 409 797 US dollar denominated bank deposits with a financial institution in the U.S. 229 251 TWD denominated bank deposits with a financial institution in Taiwan 1,035 184 CAD denominated bank deposits with financial institutions in HK SAR — 2 CAD denominated bank deposits with a financial institution in Canada 133 844 Total 430,401 380,472 To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, Taiwan, Canada and the U.S. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Accounts receivable Accounts receivable primarily represent tuition fees due from students, universities and colleges and financial service providers. Accounts receivable which are due over one year as of the balance sheet date are presented as non-current assets. The unearned interest on accounts receivable which are due over one year is reported in the consolidated balance sheets as a direct deduction from the principal amount of accounts receivable. The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its students, universities and colleges or financial service providers to make required payments. Accounts receivable is considered past due based on its contractual terms. In establishing the allowance, management considers historical losses, the financial condition, the accounts receivable aging, the payment patterns and the forecasted information in pooling basis upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC Topic 326. Accounts receivable that are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. (f) Prepaid expenses and other current assets Prepaid expenses and other current assets primarily represent prepaid advertising deposits, loans made to employees, prepaid value-added tax, professional fee, prepaid rental expenses and so on. Prepaid expenses and other current assets which are due over one year as of the balance sheet date are presented as other non-current assets. The Company maintains an allowance for credit losses for the part that is not expected to be recovered. In establishing the allowance, management considers overdue employee loan upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC Topic 326. Prepaid expenses and other current assets that are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. (g) Property and equipment Property and equipment are recorded at cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The estimated useful life of property and equipment is as follows: Office buildings 45 years Furniture 5 years Office equipment 3 Leasehold improvements Shorter of the lease term or the estimated useful life of the assets Ordinary maintenance and repairs are charged to expenses as incurred, while replacements and betterments are capitalized. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value of the item disposed of and proceeds realized thereon. Property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized for any of the years presented. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Asset held for sale The Company determine whether assets are classified as asset held for sale in accordance with ASC 360-10, Initial Criteria for Classification as Held for Sale ● Management, having the authority to approve the action, commits to a plan to sell the asset; ● The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; ● An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; ● The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; ● The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and ● Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. In 2016, the Company purchased two office buildings in Beijing and Qingdao for an aggregate price of RMB102.8 million and RMB24.6 million, respectively. The office buildings are mainly for teaching purposes, and to a lesser extent for administrative functions. The Company intended to sell the Beijing and Qingdao buildings and the board of director began to review the proposal of the building in 2022. As of December 31, 2022, the carrying amount of Beijing and Qingdao buildings were RMB95.0 million and RMB23.1 million, respectively. As the criteria for classifying assets as held for sale were met, it was confirmed as assets held for sale on December 31, 2022, and an impairment loss of RMB11.6 million was provided for Beijing Building. In March 2023, the Company signed a housing sale contract of Beijing building with a consideration of RMB93.0 million and received a deposit of RMB18.6 million. In February 2023, the Company received a letter of intent to purchase the Qingdao building from a third party with a total consideration of RMB26.1 million, and a deposit of RMB0.2 million was received in March 2023. (i) Goodwill In January 2017, the FASB issued ASU 2017-04, simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating Step two from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step two to measure the impairment loss. The Company adopted this guidance on a prospective basis on January 1, 2020 with no material impact on its consolidated financial statements and related disclosures as a result of adopting the new standard. The Company assess goodwill for impairment on annual basis in accordance with ASC 350-20, Intangibles – Goodwill and Other: Goodwill Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Goodwill (Continued) The Company performs the annual goodwill impairment assessment using qualitative and quantitative impairment test on December 31, 2022 and no impairment recorded for the years ended 2022. (j) Long-term investments ● Equity investments without readily determinable fair values Equity investments without readily determinable fair values are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes in accordance with ASC Topic 321, Investments – Equity Securities. ● Equity method investments For an investee company over which the Company has the ability to exercise significant influence, but does not have a controlling interest, the Company accounted for those using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investment is recognized in the consolidated statements of comprehensive loss; and the Company’s share of post-acquisition movements in equity is recognized in equity in the consolidated balance sheets. Unrealized gains on transactions between the Company and an entity in which it has recorded an equity investment are eliminated to the extent of the Company’s interest in the entity. To the extent of the Company’s interest in the investment, unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Company’s share of losses in an entity in which it has recorded an equity investment equals or exceeds the Company’s interest in the entity, it does not recognize further losses, unless it has incurred obligations or made payments on behalf of the equity investee. The Company evaluates the equity method investments for impairment. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Revenue recognition The Company evaluated and recognized revenue based on the five steps set forth in ASC 606 by: ● identifying the contract(s) with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”). These criteria as they relate to each of the following major revenue generating activities are described below. Revenue is presented net of value added taxes (“VAT”) at rates ranging between 3% and 13%, and surcharges. VAT to be collected from customers, net of VAT paid for purchases, is recorded as a liability in the consolidated balance sheets until it is paid to the tax authorities. Tuition revenue The Company provides IT and non-IT related training courses to both IT professional education and IT-focused supplementary STEAM education services. The Company also cooperate with universities and colleges in China to offer joint-major degree programs in accordance with the higher education reform policies of each province. The Company integrates its selected courses into universities and colleges’ standard undergraduate curriculum for students enrolled in such joint-major programs. Students can attend part of the courses in the Company’s established on-campus learning sites and part of the courses at the Company’s learning centers. A majority of contract of tuition service is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fees are recognized as revenue proportionately as the training courses are delivered, with unearned portion of tuition fees being recorded as deferred revenue. For certain students who borrow the tuition fee from financial service providers, the Company also provides a guarantee service to financial service providers whereas in the event of default, the financial service providers are entitled to receive unpaid interest and principal from the Company. Given that the Company effectively takes on all of the credit risk of the borrowers and are compensated by the tuition fees charged, the guarantee is deemed as a service and the guarantee exposure is recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees (see accounting policy for Guarantee Liabilities). The Company first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees, which requires the guarantee to be measured initially at fair value based on the stand ready obligation. Then the remaining considerations are allocated to the tuition fees consistent with the guidance in ASC 606. Certain qualified students are allowed to pay their tuition fees on installment for a period of time exceeding one year. When tuition services are sold on installment terms that exceeds one year beyond the point in time that revenue is recognized, the contract contains a significant financing component, and the consideration promised by the customer is variable. The receivable, and therefore the revenue is recorded at the present value of the payments. The difference between the present value of the receivable and the nominal or principal value of the tuition fees is recognized as interest income over the contractual repayment period using the effective interest rate method. The interest rate used to determine the present value of total amount receivable is the rate subject to management decision on the date of the transaction and it reflects the rate that the students can obtain financing of a similar nature from other sources at the date of the transaction. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Revenue recognition (Continued) The Company enters into arrangements with certain students that purchase multiple services. The performance obligations identified include tuition service and practical tutoring service. The Company treats training contracts with multiple performance obligations as separate units of accounting for revenue recognition purposes and recognizes revenue during the contract period when each performance obligation is satisfied. The Company allocates the transaction price to each performance obligations based on stand-alone selling price. Refunds are provided to students if they withdraw from classes, and usually only those unearned portions of the fee which is available will be refunded. A refund liability represents the amounts of consideration received but are not expected to be entitled to earn, and thus are not included in the transaction price because these amounts are expected to be eventually refunded to students. The Company determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Reclassification was made from deferred revenue to refund liabilities, which was recorded under accrued expenses and other current liabilities. Certification service revenue The Company provides certification service to students who complete the training course and enroll for the exams. The Company is responsible for the certification service, including organization, proctoring and grading of exams, and providing the certificates to students. All certificates are issued by third parties to the students who pass the exam. The Company is the principal to end customers. The Company acts as the principal in providing the certificate service to the students and recognizes revenue on gross basis because the Company is able to determine the price, acts as the main obligor in the arrangement, and, is responsible for fulfilling the services ordered by the students. Cash received before the students taking the exam is recorded as deferred revenue. Each contract of certification service is accounted for as a single performance obligation which is satisfied at a point in time. The performance obligation is satisfied when the certificates are provided to the students and the consideration are received, then the received consideration is recognized as certification service revenue. AI and software development revenue The Company provides AI and software development service to universities and colleges. The Company is responsible for the installation, debugging and development of AI software. The Company is the principal to end customers. The Company acts as the principal in providing the AI and software development service to universities and colleges and recognizes revenue on gross basis because the Company is able to determine the price, acts as the main obligor in the arrangement, and, is responsible for fulfilling the services ordered by the universities and colleges. Cash received before inspection and acceptance is recorded as deferred revenue. Each contract of AI and software development service is accounted for as a single performance obligation which is satisfied at a point in time. The performance obligation is satisfied when the AI and software development service are inspected and accepted, then AI and software development service revenue is recognized. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Revenue recognition (Continued) Loan referral service revenue The Company promotes loan products of financial service providers to its adult students, who need financial assistance for the payment of their tuition fees, in exchange for a referral fee generally at a rate of the principal amount of the loans. Each contract of loan referral service is accounted for as a single performance obligation which is satisfied at a point in time. Generally, the early repayment and default loan are excluded from the effective principal amount of the loans, and thus are not included in the transaction price because these amounts are expected to be eventually refunded to financial service providers. The Company determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Refund liability was recorded under accrued expenses and other current liabilities. Historically, the Company has not had material refunds. Loan referral service revenue is recognized upon the initiation of the loans as the performance obligation is satisfied and confirmed with the financial service providers on a monthly basis. Contract acquisition costs The Company has used practical expedients as allowed under ASC 606 to generally expenses sales commissions when incurred, because the amortization period would be one year or less. These costs are recorded as sales and marketing expenses. Contract liability The Company does not have amounts of contract assets since the Company transfers the promised services to customers and have the billing right or after the customers pay consideration. The contract liabilities consist of deferred revenue, which represent the Company has received consideration but has not satisfied the related performance obligations. The revenue recognized for years ended December 31, 2021 and 2022 that was previously included in the deferred revenue balances as of December 31, 2020 and December 31, 2021 was RMB1,221,729 and RMB1,370,448, respectively. The Company’s deferred revenue amounted to RMB2,024,852 and RMB1,702,661 as of December 31, 2021 and 2022, respectively. Starting from the second half of year 2019, the Company has entered into contracts that have an original expected length of more than one year with certain students. The remaining performance obligations of these contracts are as following: For the years ending December 31, 2023 2024 Total RMB RMB RMB Revenue expected to be recognized on these contracts 6,691 7,360 14,051 The Company has selected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations in contracts that have an original expected length of one year or less. Refund liability mainly related to the estimated refunds that are expected to be provided to students if they decide they no longer want to take the course. Refund liability estimates are based on historical refund ratio on a portfolio basis using the expected value method. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Cost of revenues Cost of revenues consists of payroll and employee benefits, rent expenses of learning centers, depreciation relating to property and equipment used for operating the learning centers, and other operating costs that are directly attributed to the provision of training services. (m) Guarantee liabilities For certain students who borrow the tuition fee from financial service providers, the Company provides a guarantee service to financial service providers whereas in the event of default, the financial service providers are entitled to receive unpaid interest and principal from the Company. In general, any unpaid interest and principal are paid when the borrower does not repay as scheduled. For accounting purposes, at the inception of each loan, the Company recognizes the guarantee liability in accrued expenses and other current liabilities at fair value in accordance with ASC 460-10, which incorporates the expectation of potential future payments under the guarantee and takes into both non-contingent and contingent aspects of the guarantee. Subsequent to the loan’s inception, the guarantee liability is composed of two components: (i) ASC Topic 460 component; and (ii) ASC Topic 450 component. The liability recorded based on ASC Topic 460 is determined on a loan by loan basis and it is reduced when the Company is released from the underlying risk, i.e. as the loan is repaid by the borrower or when the investor is compensated in the event of a default. This component is a stand ready obligation which is not subject to the probable threshold used to record a contingent obligation. The guarantee liabilities are generally reduced by recording a credit to guarantee service revenue as the guarantor is released from the underlying guaranteed risk. Subsequent to initial recognition, the guarantee obligation’s release from risk has typically been recognized over the term of the guarantee using a rational amortization method. The other component is a contingent liability determined based on probable loss considering the actual historical performance and current conditions, representing the obligation to make future payouts under the guarantee liability in excess of the stand-ready liability, measured using the guidance in ASC Topic 450, loans with similar risk characteristics are pooled into cohorts. The ASC 450 contingent component is recognized as part of operating expenses. At all times the recognized liability (including the stand ready liability and contingent liability) is at least equal to the probable estimated losses of the guarantee portfolio. (n) Selling and marketing expenses Selling and marketing expenses are expensed as incurred. Selling and marketing expenses primarily consist of compensation expenses relating to personnel involved in selling and marketing, including enrollment advisors and university cooperation representatives based at learning centers, advertising expenses relating to marketing activities, and, to a lesser extent, rental expenses relating to selling and marketing functions. Among them, advertising costs were RMB297,484, RMB229,571 and RMB175,648 for the years ended December 31, 2020, 2021 and 2022, respectively. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) Operating leases The Company adopted Accounting Standards Update (“ASU”) 2016-02 Leases (“ASC 842”) as of January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11. Therefore, the Company has not restated comparative period financial information for the effects of ASC 842, and will not make the new required lease disclosures for comparative periods beginning before January 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among others things (i) allowed the Company to carry forward the historical lease classification; (ii) did not require the Company to reassess whether any expired or existing contracts are or contain leases; (iii) did not require the Company to reassess initial direct costs for any existing leases. The Company identifies lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. For all operating leases except for short-term leases, the Company recognizes operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less are short-term lease and not recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term. The operating lease liabilities are reco |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | 3 ACCOUNTS RECEIVABLE, NET Accounts receivable consists of the following: December 31, 2021 2022 RMB RMB Accounts receivable: Gross 64,596 100,578 Unearned interest (1,061) (1,145) Total accounts receivable 63,535 99,433 Less: allowance for credit losses 14,987 30,518 Accounts receivable, net 48,548 68,915 The classification of accounts receivable is as follows: December 31, 2021 2022 RMB RMB Accounts receivable – current portion 48,458 68,733 Accounts receivable – non-current portion 90 182 Total accounts receivable, net 48,548 68,915 The movements of the allowance for doubtful accounts are as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Balance at the beginning of the year 2,251 9,214 14,987 Additions charged to bad debt expense 6,963 5,773 15,531 Balance at the end of the year 9,214 14,987 30,518 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 4 PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Prepaid expenses and other current assets consist of the following: December 31, 2021 2022 RMB RMB Prepaid expenses and other current assets: Prepaid deposits (a) 24,518 29,915 Loans made to employees (b) 20,584 34,421 Prepaid value-added tax 18,350 16,736 Professional fee 18,244 16,078 Prepaid rental expenses 15,669 6,837 Long-term investment disposal receivable 13,000 — Inventory 5,870 7,186 Prepaid advertising expenses 2,654 9,743 Others 28,273 20,163 Total prepaid expenses and other current assets 147,162 141,079 Less: allowance for credit losses (c) 7,405 29,740 Prepaid expenses and other current assets, net 139,757 111,339 (a) It mainly included prepaid advertising deposits. (b) The Company provides short-term interest-free loans to employees for their purchase of residence or other personal needs. (c) It mainly included the allowance for credit losses on loans made to employees, including housing loans, living loans and imprest fund loans. The movements of the allowance for doubtful accounts are as follows: December 31, 2020 2021 2022 RMB RMB RMB Balance at the beginning of the year — 7,405 7,405 Additions charged to bad debt expense 7,405 — 22,335 Balance at the end of the year 7,405 7,405 29,740 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 5 PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: December 31, 2021 2022 RMB RMB Office buildings 169,761 32,988 Furniture 43,061 39,228 Office equipment 393,561 375,930 Leasehold improvements 247,652 220,113 Total property and equipment 854,035 668,259 Less: accumulated depreciation 554,594 545,425 Property and equipment, net 299,441 122,834 Depreciation expense for property and equipment was allocated to the following: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Cost of revenues 132,898 93,503 73,797 Selling and marketing expenses 18,137 11,999 7,098 General and administrative expenses 18,867 15,345 10,535 Research and development expenses 1,354 913 252 Total 171,256 121,760 91,682 |
LONG-TERM INVESTMENTS, NET
LONG-TERM INVESTMENTS, NET | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM INVESTMENTS, NET | |
LONG-TERM INVESTMENTS, NET | 6 LONG-TERM INVESTMENTS, NET Long-term investments consist of the following: December 31, 2021 2022 RMB RMB Equity investments without readily determinable fair values A company providing mechanic training (a) 12,000 12,000 Other equity investments without readily determinable fair values (b) 17,880 15,000 Impairment of equity investments without readily determinable fair values — — Total equity investments without readily determinable fair values, net 29,880 27,000 Equity method investments Companies providing hockey program management 2,079 2,156 A company providing Internet product solutions (c) 15,014 17,551 Impairment of equity method investments (524) (524) Total equity method investments, net 16,569 19,183 Total long-term investments, net 46,449 46,183 (a) In October 2015, the Company paid RMB 12,000 in cash to acquire 2.86% of the total equity interest in an education company, which provides training for senior mechanic in vehicle maintenance and repair. No impairment loss was recognized as of December 31, 2021 and 2022, and for the years then ended. (b) During the years ended December 31, 2018 and 2019, the Company acquired minority equity interests in several third-party companies. The Company recognized no impairment loss for the years ended December 31, 2021 and 2022, respectively, and with an impairment balance of RMB 13,000 as of December 31, 2020, which has been written off during the year of 2021. (c) In January 2018, the Company paid RMB 14,000 in cash to acquire 20% of equity interest of a company which provides IT consulting services and programming and accounted for the investment using equity method. No impairment loss was recognized as of December 31, 2021 and 2022, and for the years then ended. |
OTHER NON-CURRENT ASSETS, NET
OTHER NON-CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS, NET | |
OTHER NON-CURRENT ASSETS, NET | 7 OTHER NON-CURRENT ASSETS, NET Other non-current assets consist of the following: December 31, 2021 2022 RMB RMB Other non-current assets: Rent and property management deposits 48,531 34,830 Loans made to employees (a) 16,825 220 Prepayment for equipment and leasehold improvement 8,443 4,979 Others 2,241 8,838 Total other non-current assets, net 76,040 48,867 (a) Starting from 2016, the Company began to provide five-year loans with annual interest rates within a range from 3.325% to 5.0% to the employees for their purchase of houses. Some employees’ loans are pledged by their share options. The interest was paid monthly and the principal was repaid upon maturity . |
SHORT-TERM BANK LOANS
SHORT-TERM BANK LOANS | 12 Months Ended |
Dec. 31, 2022 | |
SHORT-TERM BANK LOANS | |
SHORT-TERM BANK LOANS | 8 SHORT-TERM BANK LOANS On August 7, 2021, the Company signed a credit extension contract with the China Merchants Bank. The carrying value of office buildings pledged for the borrowing was RMB95,044, which was classified as asset held for sale as of December 31, 2022. As of December 31, 2021, the Company has drawn RMB30,000, which will mature during the period from August 2022 to November 2022 and the annual interest rate is 5.3%. On March 9, 2022, the Company signed a credit extension contract with the Bank of Beijing with a limit of RMB3,000. On October 12, 2022, the Company signed a credit extension contract with the China Merchants Bank with a limit of RMB30,000. On December 8, 2022, the Company signed another credit extension contract with the China Merchants Bank with a limit of RMB20,000. As of December 31, 2022, the Company has drawn RMB52,000, which will mature in 12 months from the drawdown date. The applicable interest rate for the loan is 4.0% to 4.9% per annum. Interest expenses of the loans were RMB5,047, RMB322 and RMB1,508 for the years ended December 31, 2020, 2021 and 2022, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, 2021 2022 RMB RMB Accrued payroll and employee benefits 201,657 153,631 Refund liability 147,210 148,245 Recharge card (a) 76,060 156,003 Professional service fee 41,276 35,469 Accrued compensation for minority shareholder litigation — 20,894 VAT and other tax payables 18,513 19,597 Payable for advertisement 18,231 18,696 Guarantee liability 9,744 11,647 Rental fee 7,414 5,850 Others 43,498 33,484 Total 563,603 603,516 (a) Recharge card is the amount that customers paid in advance without desginated enrollment contract for IT-focused supplementary STEAM education training courses. |
NET REVENUES
NET REVENUES | 12 Months Ended |
Dec. 31, 2022 | |
NET REVENUES | |
NET REVENUES | 10 NET REVENUES (a) Net revenues recognized under ASC Topic 606 for the years ended December 31, 2020, 2021 and 2022 consist of the following: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Tuition fee 1,786,230 2,281,098 2,316,428 Certification service fee 41,961 60,892 123,064 Loan referral service fee 7,801 6,332 691 Others 53,135 37,383 20,749 Business taxes and surcharges (4,252) (7,070) (5,361) Total net revenues 1,884,875 2,378,635 2,455,571 Others mainly include AI and software development revenues, franchise fee and miscellaneous revenues. Year Ended December 31, 2020 2021 2022 RMB RMB RMB Timing of revenue recognition Services transferred at a point in time 102,897 104,607 144,504 Services transferred over time 1,781,978 2,274,028 2,311,067 Total net revenues 1,884,875 2,378,635 2,455,571 (b) Net revenues recognized under ASC Topic 460 for the years ended December 31, 2020, 2021 and 2022 consist of the following: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Guarantee service 13,008 7,885 12,503 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 11 INCOME TAXES Under the current laws of the Cayman Islands, Tarena International is not subject to tax on its income or capital gains. For the period from its inception on October 22, 2012 to December 31, 2022, Tarena HK did not have any assessable profits arising in or derived from HK SAR. Tarena International’s PRC subsidiaries and consolidated VIEs and the subsidiaries of the VIEs file separate tax returns in the PRC. Effective from January 1, 2008, the PRC statutory income tax rate is 25% according to the Corporate Income Tax (“CIT”) Law which was passed by the National People’s Congress on March 16, 2007. Under the CIT Law, entities that qualify as “High and New Technology Enterprise” (“HNTE”) are entitled to a preferential income tax rate of 15%. In 2015, Tarena Tech renewed its HNTE qualification, which entitled it to the preferential income tax rate of 15% from January 1, 2015 to December 31, 2017. In 2018, Tarena Tech renewed its HNTE qualification, which entitled it to the preferential income tax rate of 15% from January 1, 2018 to December 31, 2020. In 2021, Tarena Tech renewed its HNTE qualification, which entitled it to the preferential income tax rate of 15% from January 1, 2021 to December 31, 2023. 11 INCOME TAXES (CONTINUED) One of the Chinese subsidiaries of the Company was qualified as “High and New Technology Enterprise” (“HNTE”) in 2020. And its income tax rate is 15% for the years ended December 31, 2020, 2021 and 2022. In 2016, another Chinese subsidiary of the Company was qualified as an eligible software enterprise, and was entitled to a tax holiday of a two-year full exemption followed by a three-year 50% exemption, commencing from the year in which its taxable income is greater than zero. As a result, the income tax rate of this Chinese subsidiary for the year ended December 31, 2017 was nil, and for the years ended December 31, 2018, 2019 and 2020 was 12.5%. In December 2019, the entity was qualified as “High and New Technology Enterprise” (“HNTE”), which has a valid term of three years, thus its income tax rate was 15% in 2022. Certain Tarena International’s subsidiaries and branches in China have been qualified as “Small Profit Enterprises” since 2017 and 2018, and therefore are entitled to enjoy a preferential income tax rate of 20% on 50% of the assessable profit before tax. From January 1, 2019, to December 31, 2020, 25% of the first RMB1.0 million of the assessable profit before tax is subject to preferentail tax rate of 20%, and the 50% of the assessable profit before tax exceeding RMB1.0 million but not exceeding RMB3.0 million is subject to preferential tax rate of 20%. From January 1, 2021 to December 31, 2021, 12.5% of the first RMB1.0 million of the assessable profit before tax is subject to preferential tax rate of 20% and the 50% of the assessable profit before tax exceeding RMB1.0 million but not exceeding RMB3.0 million is subject to preferential tax rate of 20%. From January 1, 2022 to December 31, 2022, 12.5% of the first RMB1.0 million of the assessable profit before tax is subject to preferential tax rate of 20% and the 25% of the assessable profit before tax exceeding RMB1.0 million but not exceeding RMB3.0 million is subject to preferential tax rate of 20%. From January 1, 2023 to December 31, 2024, 25% of the first RMB1.0 million of the assessable profit before tax is subject to the tax rate of 20% for the Company’s subsidiaries that are qualified as “Small Profit Enterprises”. In 2017, one of the Chinese subsidiaries of the Company was established in Horgus and qualified to be entitled to a special tax holiday that from the tax year of the first operating income, the subsidiary would be exempted from enterprise income tax for five years. As a result, the income tax rate of this Chinese subsidiary for the years ended December 31, 2020, 2021 and 2022 was nil. The company was canceled in 2022. Since the Company wound up some PRC subsidiaries for the year ended December 31, 2022, deferred tax assets consisting mainly of net operating loss carryforwards will no longer be utilizable in the future due to their cancellation. As a result, these deferred tax assets of RMB293 along with related full valuation allowance provided from prior years were written-off by the management as of December 31, 2022. The components of (loss) income before income taxes are as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB PRC (739,036) (342,944) 161,340 Hong Kong (8,280) (1,751) (669) Cayman Islands (54,913) (13,562) (50,283) Taiwan (1,549) (1,905) (2,318) Canada (2,449) (1,561) (2,003) Total (loss) income before income taxes (806,227) (361,723) 106,067 11 INCOME TAXES (CONTINUED) Income tax benefit (expense) consists of the following: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Current income tax expense (7,397) (12,837) (19,961) Deferred income tax benefit (expense) 42,431 (101,220) (873) Total 35,034 (114,057) (20,834) The actual income tax expense reported in the consolidated statements of comprehensive loss for each of the years ended December 31, 2020, 2021 and 2022 differs from the amount computed by applying the PRC statutory income tax rate to income before income taxes due to the following: Year Ended December 31, 2020 2021 2022 PRC statutory income tax rate 25.0 % 25.0 % 25.0 % Increase (decrease) in effective income tax rate resulting from: Impact of different tax rates in other jurisdictions (1.8) % (1.1) % 12.3 % Research and development bonus deduction 2.0 % 3.4 % (6.1) % Non-deductible expenses (1.6) % (2.0) % 7.1 % Tax impact of investment loss — — (14.1) Preferential tax rates (11.2) % (9.5) % (47.4) % Change of tax rates (2.9) % (5.5) % (2.4) % Change in valuation allowance (5.2) % (41.8) % 45.2 % Actual income tax expense 4.3 % (31.5) % 19.6 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2021 2022 RMB RMB Deferred income tax assets: Impairment of long-term investments 11,750 11,750 Tax loss carry forwards 281,813 354,806 Advertising expense 30,955 35,210 Others 5,326 6,069 Total deferred income tax assets 329,844 407,835 Valuation allowance (288,844) (367,708) Deferred income tax assets, net 41,000 40,127 Deferred income tax liabilities: Valuation appreciation of intangible assets 1,067 750 Deferred income tax liabilities* 1,067 750 * Deferred income tax liabilities are combined in other non-current liabilities. 11 INCOME TAXES (CONTINUED) The movements of the valuation allowance are as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Balance at the beginning of the year 139,177 146,371 288,844 Additions of valuation allowance 46,755 168,163 79,445 Reduction of valuation allowance (4,643) (16,752) (20,162) Reversal of valuation allowance — (188) (11,297) Change of tax rates (30,671) (8,038) 31,171 Change of decrease related to subsidiary disposals and expiration (4,247) (712) (293) Balance at the end of the year 146,371 288,844 367,708 The valuation allowance as of December 31, 2021 and 2022 was primarily provided for the deferred income tax assets of certain Tarena International’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIEs, which were at cumulative loss positions. In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable. Management has considered projected future taxable income and tax planning strategies in making this assessment. As of December 31, 2022, the Company had tax losses carryforwards of RMB2,830,342, including which from Hong Kong subsidiary of RMB6,300 that does not have an expiring date. Tax losses of RMB238,014, RMB752,012, RMB751,920, RMB661,690, and RMB420,406 will expire, if unused, by 2023, 2024, 2025,2026 and 2027, respectively. The CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax. The Company did not distribute any dividend for the years ended December 31, 2021 and 2022. The Company has considered temporary differences on the book to tax differences pertaining to all investment in subsidiaries including the determination of the indefinite reinvestment assertion that would apply to each foreign subsidiary. The Company evaluated each entity’s historical, current business environment and plans to indefinitely reinvest all earnings accumulated in its respective jurisdiction for purpose of future business expansion. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 12 RELATED PARTY TRANSACTIONS The following is a list of related parties which the Company has major transactions with: (1) Chuanbang Business Consulting (Beijing) Co., Ltd. (“Chuanbang”), a company wholly owned by Mr. Shaoyun Han (“Mr. Han”), the founder, chairman of the Company’s board of directors and former chief executive officer of the Company. (2) Xi’an Beilin District Bolton vocational skill training school (“Bolton School”), a company controlled by Mr. Han’s brother-in-law. (3) Ningxia Tarena Technology Co., Ltd (“Ningxia Company”), a company wholly owned by Ms.Han Liping, a sister of Mr. Han. (4) Beijing Huimoer Technology Co., Ltd (“Beijing Huimoer”), a company provides IT consulting services and programming, which is 20% owned by the Company since January 2018. 12 RELATED PARTY TRANSACTIONS (CONTINUED) (5) Ms. Han Lijuan, a sister of Mr. Han. (6) Anyue School (Beijing) Education Technology Co., Ltd(“An Yue”) is a company for provide educational degree improvement service, and cooperates with Beijing Tarena, which provides students and temporary collects tuition fees on its behalf. Beijing Tarena recommends AnYue’s services through its own sales channel, and will not charge intermediary fees. An Yue is 19% owned by Beijing Tarena since July 2022. The Company mainly had the following balances and transactions with related parties: Related party balances December 31, 2021 2022 RMB RMB Amounts due from related parties Ningxia Company (i) 202 251 Others 637 447 Total 839 698 Notes: (i) The balance resulted from the franchise service income. Related party transactions The major related party transactions for the years ended December 31, 2020, 2021 and 2022 are summarized as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Cash collection service expense to Chuanbang (a) 79 39 — Franchise income from Bolton School 518 462 453 Franchise, training and consulting service income from Ningxia Company (11) — — Training service expense to Bolton School 305 811 429 Technical consulting service expenses and labor expenses to Beijing Huimoer 148 — — Interest income from loan to Ms. Han Lijuan 81 — — Cash collection on behalf of An Yue — — 1,225 Notes: (a) Pursuant to an agreement between Chuanbang and the Company, beginning August 2013, Chuanbang provides cash collection service on the Company’s accounts receivable. The fee for the service is calculated based on 2% ~ 20% of the amount collected. |
ORDINARY SHARES AND STATUTORY R
ORDINARY SHARES AND STATUTORY RESERVE | 12 Months Ended |
Dec. 31, 2022 | |
ORDINARY SHARES AND STATUTORY RESERVE | |
ORDINARY SHARES AND STATUTORY RESERVE | 13 ORDINARY SHARES AND STATUTORY RESERVE (a) Treasury shares In the second quarter of 2018, the board of directors authorized an increase to the size of the share repurchase plan from US$30 million to US$70 million and an extension of the term of the plan to June 20, 2019. For the year ended December 31, 2018, 3,768,495 ordinary shares were repurchased on the open market in the amount of RMB202,066. For the year ended December 31, 2020, 100,729 ordinary shares were repurchased with the amount of RMB2,646. No ordinary shares were repurchased for the year ended December 31, 2021. For the year ended December 31, 2022, 3,409,080 ordinary shares were repurchased with the amount of RMB17,103. (b) Statutory reserves and restricted net assets Under PRC rules and regulations, Tarena International’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIEs (the “PRC Entities”) are required to appropriate 10% of their net profit, as determined in accordance with PRC accounting rules and regulations, to a statutory surplus reserve until the reserve balance reaches 50% of their registered capital. In addition, private schools (held by the PRC Entities) which require reasonable returns are required to appropriate 25% of their net profit, as determined in accordance with PRC accounting rules and regulations, to a statutory development fund, whereas in the case of private schools which do not require reasonable return, 25% of the annual increase of their net assets. The appropriation to these statutory reserves must be made before distribution of dividends to Tarena International can be made. For the years ended December 31, 2020, 2021 and 2022, the PRC Entities made appropriations to the statutory reserves of RMB5,307, RMB16,736 and RMB19,037, respectively. As of December 31, 2021 and 2022, the accumulated balance of the statutory reserves was RMB175,564 and RMB194,601, respectively, which is combined in accumulated deficit. Relevant PRC laws and regulations restrict the WFOE, VIE and VIE’s subsidiary from transferring a portion of their net assets, equivalent to the balance of their paid-in-capital, additional paid-in-capital and statutory reserves to the Company in the form of loans, advances or cash dividends. Relevant PRC statutory laws and regulations restrict the payments of dividends by the Company’s VIE and VIE’s subsidiary from their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The balances of restricted net assets as of December 31, 2021 and 2022 were RMB1,523,198 and RMB1,558,879 respectively. Under applicable PRC laws, loans from PRC companies to their offshore affiliated entities require governmental approval, and advances by PRC companies to their offshore affiliated entities must be supported by bona fide business transactions. (c) Dividend No cash dividend was declared for the years ended December 31, 2020, 2021 and 2022. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE BASED COMPENSATION | |
SHARE BASED COMPENSATION | 14 SHARE BASED COMPENSATION Share incentive plans On February 1, 2014, Tarena International adopted the 2014 Share Plan (the “2014 Plan”), pursuant to which Tarena International was authorized to issue options, non-vested shares and non-vested share units to qualified employees, directors and consultants of the Company. The maximum aggregate number of shares which may be issued pursuant to all awards under the 2014 Plan, or the Award Pool, is 1,833,696, provided that the shares reserved in the Award Pool shall be increased on the first day of each fiscal year, commencing with January 1, 2015, if the unissued shares reserved in the Award Pool on such day account for less than 2% of the total number of shares issued and outstanding on a fully-diluted basis on December 31 of the immediately preceding fiscal year, as a result of which increase the shares unissued and reserved in the Award Pool immediately after each such increase shall equal 2% of the total number of shares issued and outstanding on a fully-diluted basis on December 31 of the immediately preceding fiscal year. Share options During the year ended December 31, 2020, the board of the directors of Tarena International approved the grant of options to certain officers and employees to purchase 1,236,146 ordinary shares of Tarena International at exercise prices ranging from US$1.00 to US$2.51 per share. These options vest over a period ranging between 0.25 and 5 years. The options have a contractual term of ten years. During the year ended December 31, 2021, the board of the directors of Tarena International approved the grant of options to certain officers and employees to purchase 879,000 ordinary shares of Tarena International at exercise prices ranging from US$0.00 to US$0.37 per share. These options vest over a period ranging between 1 and 2 years. The options have a contractual term of ten years. During the year ended December 31, 2022, the board of the directors of Tarena International approved the grant of options to certain officers and employees to purchase 1,166,980 ordinary shares of Tarena International at exercise price of US$0.01 per share. These options vest over a period ranging between 0.00 and 10 years. The options have a contractual term of ten years. 14 SHARE BASED COMPENSATION (CONTINUED) Share options (Continued) A summary of share options activity for the year ended December 31, 2022 is as follows: Weighted Weighted Average Number of Average Remaining Aggregate Share Exercise Price Contractual Intrinsic Options US$ Years Value US$ Outstanding at December 31, 2021 2,740,020 1.67 6.90 1,976 Granted 1,166,980 0.01 — — Exercised (398,000) 0.01 — — Forfeited (152,365) 2.44 — — Outstanding at December 31, 2022 3,356,635 0.10 6.89 2,994 Vested and expected to vest as of December 31, 2022 4,821,350 0.29 5.70 4,378 Exercisable as of December 31, 2022 2,408,105 0.65 5.96 2,118 The total intrinsic value of options exercised during the years ended December 31, 2020, 2021 and 2022 were RMB26,301, RMB6,261 and RMB2,543, respectively. The Company calculated the fair value of the share options on the grant date using the Binomial option-pricing valuation model. The assumptions used in the valuation model are summarized in the following table. Year Ended December 31, 2020 2021 2022 Expected volatility 72.22%-78.51% 73.76%-75.78% 75.77%-77.77% Expected dividends yield 0% 0% 0% Exercise multiple 2.2-2.8 2.2-2.8 2.2-2.8 Risk-free interest rate per annum 0.79%-2.08% 1.09%-1.66% 1.66%-4.10% The fair value of underlying ordinary shares (per share) US$1.71-US$4.65 US$0.20-US$2.92 US$0.36-US$1.13 The expected volatility was based on the historical volatilities of the Company and comparable publicly traded companies engaged in the similar industry. No income tax benefit was recognized in the consolidated statements of comprehensive loss as the share-based compensation expense was not tax deductible. 14 SHARE BASED COMPENSATION (CONTINUED) Share options (Continued) The fair values of the options granted for the years ended December 31, 2020, 2021 and 2022 are as follows: Year Ended December 31, 2020 2021 2022 US$ US$ US$ Weighted average grant date fair value of option per share 2.52 0.82 0.92 Aggregate grant date fair value of options 3,115 720 1,079 As of December 31, 2022, there was approximately RMB 6,721 of total unrecognized compensation cost related to unvested share options and the unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 4.38 years. Non-vested shares On January 1, 2020, the board of directors of Tarena International approved the grant of 35,912 non-vested shares to 1 independent director, of which the vesting period is one year. On March 1, 2020, the board of directors of Tarena International approved the grant of 74,000 non-vested shares to 1 independent director and 1 executive officer, of which the vesting period is one year. On April 9, 2020, the board of directors of Tarena International approved the grant of 143,628 non-vested shares to 1 independent director, 1 director and executive officer, of which the vesting period is one year. On March 1, 2021, the board of directors of Tarena International approved the grant of 69,355 non-vested shares to 1 independent director and 1 executive officer, of which the vesting period is one year. On April 9, 2021, the board of directors of Tarena International approved the grant of 48,690 non-vested shares to 1 independent director and 1 executive director, of which the vesting period is one year. On March 1, 2022, the board of directors of Tarena International approved the grant of 50,000 non-vested shares to 1 former independent director, of which the vesting period is one year. On April 9, 2022, the board of directors of Tarena International approved the grant of 337,170 non-vested shares to 1 independent director and 1 former independent director, of which the vesting period is one year. A summary of the non-vested shares activity under the 2014 Share Plan for the year ended December 31, 2022 is summarized as follows: Number of Non- Weighted Average vested Shares Grant Date Fair Value US$ Outstanding as of December 31, 2021 159,385 7.11 Granted 387,170 0.47 Vested (185,685) 2.62 Forfeited (215,950) 0.89 Outstanding as of December 31, 2022 144,920 4.38 As of December 31, 2022, there was approximately RMB4,382 of total unrecognized compensation cost related to non-vested shares, which is expected to be recognized over a weighted average period of approximately 0.71 year. The total fair value of shares vested during the years ended December 31, 2020, 2021 and 2022 was RMB9,013, RMB5,930 and RMB3,358, respectively. |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
(LOSS) EARNINGS PER SHARE | |
(LOSS) EARNINGS PER SHARE | 15 (LOSS) EARNINGS PER SHARE Basic and diluted (loss) earnings per share is calculated as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Numerator: Net (loss) income attributable to Class A and Class B ordinary shareholders for basic and diluted earnings per share (766,643) (474,547) 83,520 Denominator: Denominator for basic earnings per share: Weighted average number of Class A and Class B ordinary shares outstanding 54,341,213 56,260,925 54,657,222 Dilutive effect of outstanding share options — — 3,073,450 Denominator for diluted (loss) earnings per share 54,341,213 56,260,925 57,730,672 Basic (loss) earnings per ADS (70.54) (42.17) 7.64 Diluted (loss) earnings per ADS (70.54) (42.17) 7.23 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | 16 LEASES The Company’s leases consist of operating leases for learning centers and office spaces in different cities in the PRC. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. As of December 31, 2022, the Company had no long-term leases that were classified as a financing lease, and the Company’s lease contracts only contain fixed lease payments and do not contain any residual value guarantee. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheets. The Company recognizes rental expense on a straight-line basis over the lease term. The components of rental expense for the years ended December 31, 2020, 2021 and 2022 consist as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Short-term rental expense 114,723 35,707 20,379 Operating lease expense excluding short-term rental expense 170,022 250,043 194,742 Other information related to operating leases is as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: 244,491 228,857 173,352 Right-of-use assets obtained in exchange for newlease liabilities: 484,202 185,875 112,966 As of December 31, 2021 and 2022, the weighted average remaining lease term was 2.76 years and 2.46 years, respectively, and the weighted average discount rate was 5.60% and 5.61% for the Group’s operating leases, respectively. The Company’s lease agreements do not have a discount rate that is readily determinable. The incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The weighted-average discount rate was calculated using the discount rate for the lease that was used to calculate the lease liability balance for each lease and the remaining balance of the lease payments for each lease as of December 31, 2021 and 2022. 16 LEASES (CONTINUED) The weighted-average remaining lease terms were calculated by using the remaining lease term and the lease liability balance for each lease as of December 31, 2021 and 2022. As of December 31, 2022, maturities of lease liabilities were as follows: RMB Year ending December 31, 2023 211,376 2024 104,068 2025 50,572 2026 18,296 2027 4,499 2028 and thereafter 1,021 Total lease payments 389,832 Less: imputed interest 23,127 Total 366,705 Less: current portion 197,969 Non-current portion 168,736 Gross rental expenses incurred under operating leases were RMB284,745, RMB285,750 and RMB215,121 for the years ended December 31, 2020, 2021 and 2022, respectively. Sublease rental income of RMB971, RMB583, and RMB330 for the years ended December 31, 2020, 2021 and 2022, respectively, were recognized as reductions of gross rental expenses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 17 COMMITMENTS AND CONTINGENCIES The Company and certain of its current and former officers and directors have been named as defendants in a putative securities class action captioned Yili Qiu v. Tarena International, Inc. et al., (Case No. 1:21-cv-03502) filed on June 22, 2021 in the U.S. District Court for the Eastern District of New York. The complaint asserts that defendants made false or misleading statements in certain SEC filings between August 16, 2016 and November 1, 2019 related to the Company’s business and operating results in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On September 1, 2021, the court entered an order appointing lead plaintiff in this action. On September 14, 2021, the parties filed a joint status report and proposed scheduling stipulation, pursuant to which, the lead plaintiff filed an amended complaint on November 1, 2021. On December 16, 2021, the Company filed its pre-motion letter and the plaintiffs filed their opposition on December 23, 2021. On January 18, 2022, the Company moved to dismiss the complaint. On April 4, 2022, lead plaintiff served its opposition to the motion. Briefing was completed on May 19, 2022. While the motion to dismiss was pending, Plaintiff and the Company reached an agreement in principle to settle all claims. On July 13, 2022, Plaintiff filed a letter informing the court of the settlement in principle. On August 31, 2022, the parties filed a motion for preliminary approval of the proposed settlement agreement. Preliminary approval hearing took place on November 8, 2022, and the Court reserved judgement on the motion pending submission of additional information. In December 2022, the parties submitted revised settlement materials to the Court. The Court decision on the revised settlement papers is pending. An estimated loss amounting to $3.0 million from this litigation was accrued by a charge to general and administrative expenses. There will have no material adverse effect on the Company’s financial position, results of operations or liquidity. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 18 SEGMENT INFORMATION The Company has organized its operations into two segments: IT Professional Education and IT-focused Supplementary STEAM Education Services, which reflects the way the Company evaluates its business performance and manages its operations by the Company’s CODM. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment’s revenues, cost of revenues, and gross profit. The CODM doesnot review balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM. Net revenues, cost of revenues, and gross profit by segment for the years ended December 31, 2020, 2021 and 2022 were as follows. Year Ended December 31, 2022 IT IT-focused Professional Supplementary STEAM Education Education Total RMB RMB RMB Net revenues 1,068,230 1,399,844 2,468,074 Cost of revenues (320,961) (735,082) (1,056,043) Gross profit 747,269 664,762 1,412,031 Year Ended December 31, 2021 IT IT-focused Professional Supplementary STEAM Education Education Total RMB RMB RMB Net revenues 1,150,247 1,236,273 2,386,520 Cost of revenues (409,326) (792,093) (1,201,419) Gross profit 740,921 444,180 1,185,101 Year Ended December 31, 2020 IT IT-focused Professional Supplementary STEAM Education Education Total RMB RMB RMB Net revenues 1,136,043 761,840 1,897,883 Cost of revenues (420,349) (646,493) (1,066,842) Gross profit 715,694 115,347 831,041 |
PARENT ONLY FINANCIAL INFORMATI
PARENT ONLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
PARENT ONLY FINANCIAL INFORMATION | |
PARENT ONLY FINANCIAL INFORMATION | 19 PARENT ONLY FINANCIAL INFORMATION The following presents condensed parent company financial information of Tarena International. Condensed Balance Sheets December 31, 2021 2022 2022 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 23,506 1,844 267 Prepaid expenses and other current assets 24 550 80 Due from subsidaries 407,795 437,987 63,502 Total current assets 431,325 440,381 63,849 Investment in subsidiaries (1,700,223) (1,574,974) (228,350) Total assets (1,268,898) (1,134,593) (164,501) LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other current liabilities (1) 5,781 30,392 4,406 Due to intercompany 309,241 334,909 48,557 Total current liabilities 315,022 365,301 52,963 Total liabilities 315,022 365,301 52,963 Commitments and contingencies — — — Shareholders’ deficit: Class A ordinary shares (US$0.001 par value, 860,000,000 shares authorized, 56,593,157 and 57,176,842 shares issued, 49,393,287 and 46,567,892 shares outstanding as of December 31, 2021 and 2022, respectively) 355 359 52 Class B ordinary shares (US$0.001 par value, 40,000,000 shares authorized, 7,206,059 shares issued outstanding December 31, 2021 74 74 11 Treasury shares (7,199,870 and 10,608,950 Class A ordinary shares as of December 31, 2021 and 2022, at cost) (459,815) (476,918) (69,147) Additional paid-in capital 1,347,205 1,363,845 197,739 Accumulated other comprehensive income 48,699 49,664 7,201 Accumulated deficit (2,520,438) (2,436,918) (353,320) Total shareholders’ deficit (1,583,920) (1,499,894) (217,464) Total liabilities and shareholders’ deficit (1,268,898) (1,134,593) (164,501) (1) Mainly related to repurchase of treasury shares. 19 PARENT ONLY FINANCIAL INFORMATION (CONTINUED) Condensed Statements of Comprehensive (Loss) Income Year Ended December 31, 2020 2021 2022 2022 RMB RMB RMB US$ Selling and marketing expenses (693) (323) (8) (1) General and administrative expenses (16,890) 5,955 (34,558) (5,010) Operating (loss) income (17,583) 5,632 (34,566) (5,011) Equity in (loss) income of subsidiaries (748,006) (480,114) 117,266 17,001 Foreign currency exchange (loss) gains (1,109) (268) 2,480 360 Interest income (expense) 55 203 (1,660) (241) (Loss) income before income taxes (766,643) (474,547) 83,520 12,109 Income tax expense — — — — Net (loss) income (766,643) (474,547) 83,520 12,109 Other comprehensive (loss) income Foreign currency translation adjustment (2,266) (421) 965 140 Comprehensive (loss) income (768,909) (474,968) 84,485 12,249 Condensed Statements of Cash Flows Year Ended December 31, 2020 2021 2022 2022 RMB RMB RMB US$ Operating activities: Net cash (used in) provided by operating activities (8,010) 14,458 (5,699) (826) Financing activities: Issuance of Class A ordinary shares in connection with exercise of share options 3,354 3,947 107 16 Repurchase of treasury shares — — (17,103) (2,480) Net cash provided by (used in) financing activities 3,354 3,947 (16,996) (2,464) Changes in cash and cash equivalents (4,656) 18,405 (22,695) (3,290) Effect of foreign currency exchange rate changes on cash and cash equivalents 850 1,308 1,033 150 Net (decrease) increase in cash and cash equivalents (3,806) 19,713 (21,662) (3,140) Cash and cash equivalents at beginning of year 7,599 3,793 23,506 3,407 Cash and cash equivalents at end of year 3,793 23,506 1,844 267 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 20 SUBSEQUENT EVENTS A Proposed Disposal The board of directors has held a meeting on December 30, 2022, agreed to a proposed transaction to dispose of the Company’s controlling interest in its university and college joint academic programs and related peripheral services to colleges and students (the “Target Business”), to a consortium (the “Proposed Disposal”). The consortium includes Beijing WeiKeXinNeng Education Technology Company Ltd. (“Beijing WeiKe”), and Shaoyun Han, the Chairman of the Board of Directors of the Company. The Company signed a non-binding letter of intent with the consortium in December 2022. On April 26 and 28, 2023, the Company held two board meetings to approve the Proposed Disposal and the Investment agreement and related restructuring agreement were signed on April 28, 2023. The consortium will inject a total of RMB50 million cash into the Target Business. After the transaction, the Company’s ownership interest will change from 100% to 20% of the Target Business and Beijing Weike and Shaoyun Han will hold 70% and 10% equity ownership of the Target Business respectively. The Company is in the process of related restructuring which is subject to certain closing conditions. The business revenue and proportion of assets of the Target Business are both an insignificant portion of the Company’s consolidated financial statements. Therefore, the Proposed Disposal is not a strategic shift that has (or will have) a major effect. The Company has not identified any other events with material financial impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of consolidation | (a) Principles of consolidation The consolidated financial statements include the financial statements of Tarena International, its wholly-owned subsidiaries, and VIEs which Tarena International is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant intercompany balances and transactions have been eliminated upon consolidation. |
Use of estimates | (b) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include goodwill impairment and long term investments, the allowance for credit losses of accounts receivable, amounts due from related parties, prepaid expenses and other current assets and other non-current assets, the realizability of deferred income tax assets, the accruals for other contingencies, the useful lives of property and equipment and the recoverability of the carrying amounts of property and equipment and right-of-use assets. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. To allocate the transaction price for contracts with multiple deliverables and estimate the standalone selling price, the Company considers market data, including its pricing strategies for the products being evaluated and other similar products it offers, competitor pricing to the extent data is available, and costs to determine whether the estimated selling price yields an appropriate profit margin. |
Foreign currency | (c) Foreign currency The functional currency of Tarena International and Tarena Hong Kong Limited (“Tarena HK”) is the USD. The functional currency of Techarena Canada Inc. is the Canadian Dollar (“CAD”). The functional currency of Taiwan Tarena Counseling Software Co., Ltd. is the Taiwan New Dollar (“TWD”). The functional currency of Tarena International’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIE is the RMB. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rate at the balance sheet date. The resulting exchange differences are recorded in foreign currency exchange loss in the consolidated statements of comprehensive loss. Assets and liabilities of entities with functional currencies other than RMB are translated into RMB using the exchange rate on the balance sheet date. Revenues and expenses are translated into RMB at average rates prevailing during the reporting period. The resulting foreign currency translation adjustment are recorded in accumulated other comprehensive loss within shareholders’ equity. Since the RMB is not a fully convertible currency, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. |
Cash, cash equivalents, restricted cash and time deposits | (d) Cash, cash equivalents, restricted cash and time deposits Cash consists of cash in bank and deposits placed in third party payment processors of Alipay, Wechat wallet and Baidu wallet, which are unrestricted as to withdrawal. Cash equivalents consist of interest-bearing certificates of deposit with initial term of no more than three months when purchased. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. As of December 31, 2022, restricted cash was the bank acceptances at maturity March 1, 2023, frozen foreign exchange and letter of guarantee. Cash, cash equivalents, time deposits and restricted cash maintained at financial institutions consist of the following: December 31, 2021 2022 RMB RMB RMB denominated bank deposits with financial institutions in the PRC 405,296 377,040 US dollar denominated bank deposits with financial institutions in the PRC 1,234 743 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 22,001 574 HK dollar denominated bank deposits with financial institutions in HK SAR 64 37 RMB denominated bank deposits with a financial institution in HK SAR 409 797 US dollar denominated bank deposits with a financial institution in the U.S. 229 251 TWD denominated bank deposits with a financial institution in Taiwan 1,035 184 CAD denominated bank deposits with financial institutions in HK SAR — 2 CAD denominated bank deposits with a financial institution in Canada 133 844 Total 430,401 380,472 To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, Taiwan, Canada and the U.S. |
Accounts receivable | (e) Accounts receivable Accounts receivable primarily represent tuition fees due from students, universities and colleges and financial service providers. Accounts receivable which are due over one year as of the balance sheet date are presented as non-current assets. The unearned interest on accounts receivable which are due over one year is reported in the consolidated balance sheets as a direct deduction from the principal amount of accounts receivable. The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its students, universities and colleges or financial service providers to make required payments. Accounts receivable is considered past due based on its contractual terms. In establishing the allowance, management considers historical losses, the financial condition, the accounts receivable aging, the payment patterns and the forecasted information in pooling basis upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC Topic 326. Accounts receivable that are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. |
Prepaid expenses and other current assets | (f) Prepaid expenses and other current assets Prepaid expenses and other current assets primarily represent prepaid advertising deposits, loans made to employees, prepaid value-added tax, professional fee, prepaid rental expenses and so on. Prepaid expenses and other current assets which are due over one year as of the balance sheet date are presented as other non-current assets. The Company maintains an allowance for credit losses for the part that is not expected to be recovered. In establishing the allowance, management considers overdue employee loan upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC Topic 326. Prepaid expenses and other current assets that are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. |
Property and equipment | (g) Property and equipment Property and equipment are recorded at cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The estimated useful life of property and equipment is as follows: Office buildings 45 years Furniture 5 years Office equipment 3 Leasehold improvements Shorter of the lease term or the estimated useful life of the assets Ordinary maintenance and repairs are charged to expenses as incurred, while replacements and betterments are capitalized. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value of the item disposed of and proceeds realized thereon. Property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized for any of the years presented. |
Assets held for sale | (h) Asset held for sale The Company determine whether assets are classified as asset held for sale in accordance with ASC 360-10, Initial Criteria for Classification as Held for Sale ● Management, having the authority to approve the action, commits to a plan to sell the asset; ● The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; ● An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; ● The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; ● The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and ● Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. In 2016, the Company purchased two office buildings in Beijing and Qingdao for an aggregate price of RMB102.8 million and RMB24.6 million, respectively. The office buildings are mainly for teaching purposes, and to a lesser extent for administrative functions. The Company intended to sell the Beijing and Qingdao buildings and the board of director began to review the proposal of the building in 2022. As of December 31, 2022, the carrying amount of Beijing and Qingdao buildings were RMB95.0 million and RMB23.1 million, respectively. As the criteria for classifying assets as held for sale were met, it was confirmed as assets held for sale on December 31, 2022, and an impairment loss of RMB11.6 million was provided for Beijing Building. In March 2023, the Company signed a housing sale contract of Beijing building with a consideration of RMB93.0 million and received a deposit of RMB18.6 million. In February 2023, the Company received a letter of intent to purchase the Qingdao building from a third party with a total consideration of RMB26.1 million, and a deposit of RMB0.2 million was received in March 2023. |
Goodwill | (i) Goodwill In January 2017, the FASB issued ASU 2017-04, simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating Step two from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step two to measure the impairment loss. The Company adopted this guidance on a prospective basis on January 1, 2020 with no material impact on its consolidated financial statements and related disclosures as a result of adopting the new standard. The Company assess goodwill for impairment on annual basis in accordance with ASC 350-20, Intangibles – Goodwill and Other: Goodwill Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company performs the annual goodwill impairment assessment using qualitative and quantitative impairment test on December 31, 2022 and no impairment recorded for the years ended 2022. |
Long-term investments | (j) Long-term investments ● Equity investments without readily determinable fair values Equity investments without readily determinable fair values are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes in accordance with ASC Topic 321, Investments – Equity Securities. ● Equity method investments For an investee company over which the Company has the ability to exercise significant influence, but does not have a controlling interest, the Company accounted for those using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investment is recognized in the consolidated statements of comprehensive loss; and the Company’s share of post-acquisition movements in equity is recognized in equity in the consolidated balance sheets. Unrealized gains on transactions between the Company and an entity in which it has recorded an equity investment are eliminated to the extent of the Company’s interest in the entity. To the extent of the Company’s interest in the investment, unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Company’s share of losses in an entity in which it has recorded an equity investment equals or exceeds the Company’s interest in the entity, it does not recognize further losses, unless it has incurred obligations or made payments on behalf of the equity investee. The Company evaluates the equity method investments for impairment. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. |
Revenue recognition | (k) Revenue recognition The Company evaluated and recognized revenue based on the five steps set forth in ASC 606 by: ● identifying the contract(s) with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”). These criteria as they relate to each of the following major revenue generating activities are described below. Revenue is presented net of value added taxes (“VAT”) at rates ranging between 3% and 13%, and surcharges. VAT to be collected from customers, net of VAT paid for purchases, is recorded as a liability in the consolidated balance sheets until it is paid to the tax authorities. Tuition revenue The Company provides IT and non-IT related training courses to both IT professional education and IT-focused supplementary STEAM education services. The Company also cooperate with universities and colleges in China to offer joint-major degree programs in accordance with the higher education reform policies of each province. The Company integrates its selected courses into universities and colleges’ standard undergraduate curriculum for students enrolled in such joint-major programs. Students can attend part of the courses in the Company’s established on-campus learning sites and part of the courses at the Company’s learning centers. A majority of contract of tuition service is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fees are recognized as revenue proportionately as the training courses are delivered, with unearned portion of tuition fees being recorded as deferred revenue. For certain students who borrow the tuition fee from financial service providers, the Company also provides a guarantee service to financial service providers whereas in the event of default, the financial service providers are entitled to receive unpaid interest and principal from the Company. Given that the Company effectively takes on all of the credit risk of the borrowers and are compensated by the tuition fees charged, the guarantee is deemed as a service and the guarantee exposure is recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees (see accounting policy for Guarantee Liabilities). The Company first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees, which requires the guarantee to be measured initially at fair value based on the stand ready obligation. Then the remaining considerations are allocated to the tuition fees consistent with the guidance in ASC 606. Certain qualified students are allowed to pay their tuition fees on installment for a period of time exceeding one year. When tuition services are sold on installment terms that exceeds one year beyond the point in time that revenue is recognized, the contract contains a significant financing component, and the consideration promised by the customer is variable. The receivable, and therefore the revenue is recorded at the present value of the payments. The difference between the present value of the receivable and the nominal or principal value of the tuition fees is recognized as interest income over the contractual repayment period using the effective interest rate method. The interest rate used to determine the present value of total amount receivable is the rate subject to management decision on the date of the transaction and it reflects the rate that the students can obtain financing of a similar nature from other sources at the date of the transaction. The Company enters into arrangements with certain students that purchase multiple services. The performance obligations identified include tuition service and practical tutoring service. The Company treats training contracts with multiple performance obligations as separate units of accounting for revenue recognition purposes and recognizes revenue during the contract period when each performance obligation is satisfied. The Company allocates the transaction price to each performance obligations based on stand-alone selling price. Refunds are provided to students if they withdraw from classes, and usually only those unearned portions of the fee which is available will be refunded. A refund liability represents the amounts of consideration received but are not expected to be entitled to earn, and thus are not included in the transaction price because these amounts are expected to be eventually refunded to students. The Company determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Reclassification was made from deferred revenue to refund liabilities, which was recorded under accrued expenses and other current liabilities. Certification service revenue The Company provides certification service to students who complete the training course and enroll for the exams. The Company is responsible for the certification service, including organization, proctoring and grading of exams, and providing the certificates to students. All certificates are issued by third parties to the students who pass the exam. The Company is the principal to end customers. The Company acts as the principal in providing the certificate service to the students and recognizes revenue on gross basis because the Company is able to determine the price, acts as the main obligor in the arrangement, and, is responsible for fulfilling the services ordered by the students. Cash received before the students taking the exam is recorded as deferred revenue. Each contract of certification service is accounted for as a single performance obligation which is satisfied at a point in time. The performance obligation is satisfied when the certificates are provided to the students and the consideration are received, then the received consideration is recognized as certification service revenue. AI and software development revenue The Company provides AI and software development service to universities and colleges. The Company is responsible for the installation, debugging and development of AI software. The Company is the principal to end customers. The Company acts as the principal in providing the AI and software development service to universities and colleges and recognizes revenue on gross basis because the Company is able to determine the price, acts as the main obligor in the arrangement, and, is responsible for fulfilling the services ordered by the universities and colleges. Cash received before inspection and acceptance is recorded as deferred revenue. Each contract of AI and software development service is accounted for as a single performance obligation which is satisfied at a point in time. The performance obligation is satisfied when the AI and software development service are inspected and accepted, then AI and software development service revenue is recognized. Loan referral service revenue The Company promotes loan products of financial service providers to its adult students, who need financial assistance for the payment of their tuition fees, in exchange for a referral fee generally at a rate of the principal amount of the loans. Each contract of loan referral service is accounted for as a single performance obligation which is satisfied at a point in time. Generally, the early repayment and default loan are excluded from the effective principal amount of the loans, and thus are not included in the transaction price because these amounts are expected to be eventually refunded to financial service providers. The Company determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Refund liability was recorded under accrued expenses and other current liabilities. Historically, the Company has not had material refunds. Loan referral service revenue is recognized upon the initiation of the loans as the performance obligation is satisfied and confirmed with the financial service providers on a monthly basis. Contract acquisition costs The Company has used practical expedients as allowed under ASC 606 to generally expenses sales commissions when incurred, because the amortization period would be one year or less. These costs are recorded as sales and marketing expenses. Contract liability The Company does not have amounts of contract assets since the Company transfers the promised services to customers and have the billing right or after the customers pay consideration. The contract liabilities consist of deferred revenue, which represent the Company has received consideration but has not satisfied the related performance obligations. The revenue recognized for years ended December 31, 2021 and 2022 that was previously included in the deferred revenue balances as of December 31, 2020 and December 31, 2021 was RMB1,221,729 and RMB1,370,448, respectively. The Company’s deferred revenue amounted to RMB2,024,852 and RMB1,702,661 as of December 31, 2021 and 2022, respectively. Starting from the second half of year 2019, the Company has entered into contracts that have an original expected length of more than one year with certain students. The remaining performance obligations of these contracts are as following: For the years ending December 31, 2023 2024 Total RMB RMB RMB Revenue expected to be recognized on these contracts 6,691 7,360 14,051 The Company has selected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations in contracts that have an original expected length of one year or less. Refund liability mainly related to the estimated refunds that are expected to be provided to students if they decide they no longer want to take the course. Refund liability estimates are based on historical refund ratio on a portfolio basis using the expected value method. |
Cost of revenues | (l) Cost of revenues Cost of revenues consists of payroll and employee benefits, rent expenses of learning centers, depreciation relating to property and equipment used for operating the learning centers, and other operating costs that are directly attributed to the provision of training services. |
Guarantee liabilities | (m) Guarantee liabilities For certain students who borrow the tuition fee from financial service providers, the Company provides a guarantee service to financial service providers whereas in the event of default, the financial service providers are entitled to receive unpaid interest and principal from the Company. In general, any unpaid interest and principal are paid when the borrower does not repay as scheduled. For accounting purposes, at the inception of each loan, the Company recognizes the guarantee liability in accrued expenses and other current liabilities at fair value in accordance with ASC 460-10, which incorporates the expectation of potential future payments under the guarantee and takes into both non-contingent and contingent aspects of the guarantee. Subsequent to the loan’s inception, the guarantee liability is composed of two components: (i) ASC Topic 460 component; and (ii) ASC Topic 450 component. The liability recorded based on ASC Topic 460 is determined on a loan by loan basis and it is reduced when the Company is released from the underlying risk, i.e. as the loan is repaid by the borrower or when the investor is compensated in the event of a default. This component is a stand ready obligation which is not subject to the probable threshold used to record a contingent obligation. The guarantee liabilities are generally reduced by recording a credit to guarantee service revenue as the guarantor is released from the underlying guaranteed risk. Subsequent to initial recognition, the guarantee obligation’s release from risk has typically been recognized over the term of the guarantee using a rational amortization method. The other component is a contingent liability determined based on probable loss considering the actual historical performance and current conditions, representing the obligation to make future payouts under the guarantee liability in excess of the stand-ready liability, measured using the guidance in ASC Topic 450, loans with similar risk characteristics are pooled into cohorts. The ASC 450 contingent component is recognized as part of operating expenses. At all times the recognized liability (including the stand ready liability and contingent liability) is at least equal to the probable estimated losses of the guarantee portfolio. |
Selling and marketing expenses | (n) Selling and marketing expenses Selling and marketing expenses are expensed as incurred. Selling and marketing expenses primarily consist of compensation expenses relating to personnel involved in selling and marketing, including enrollment advisors and university cooperation representatives based at learning centers, advertising expenses relating to marketing activities, and, to a lesser extent, rental expenses relating to selling and marketing functions. Among them, advertising costs were RMB297,484, RMB229,571 and RMB175,648 for the years ended December 31, 2020, 2021 and 2022, respectively. |
Operating lease | (o) Operating leases The Company adopted Accounting Standards Update (“ASU”) 2016-02 Leases (“ASC 842”) as of January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11. Therefore, the Company has not restated comparative period financial information for the effects of ASC 842, and will not make the new required lease disclosures for comparative periods beginning before January 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among others things (i) allowed the Company to carry forward the historical lease classification; (ii) did not require the Company to reassess whether any expired or existing contracts are or contain leases; (iii) did not require the Company to reassess initial direct costs for any existing leases. The Company identifies lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. For all operating leases except for short-term leases, the Company recognizes operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less are short-term lease and not recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term. The operating lease liabilities are recognized based on the present value of the lease payments not yet paid, discounted using the Company’s incremental borrowing rate over a similar term of the lease payments at lease commencement. Some of the Company’s lease agreements contain renewal options; however, the Company do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at inception or when a triggering event occurs. The right-of-use assets consist of the amount of the measurement of the lease liabilities and any prepaid lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Government grant | (p) Government grant Government grant is recognized when there is reasonable assurance that the Company will comply with the conditions attached to it and the grant will be received. Government grant for the purpose of giving immediate financial support to the Company with no future related costs or obligation is recognized in the Company’s consolidated statements of comprehensive (loss) income when the grant becomes receivable. Government grants of RMB4,735, RMB3,760 and RMB6,741 were recognized and included in other income for the years ended December 31, 2020, 2021 and 2022, respectively. |
Research and development expense | (q) Research and development costs Research and development costs are expensed as incurred. Research and development expenses primarily consist of a portion of the personnel costs of instructors as determined based on the amount of time that they devote to research and development-related activities, as well as the personnel costs of software engineers. Research and development expenses were RMB 100,466, RMB 106,098 and RMB 72,028 in 2020, 2021 and 2022 respectively. |
Employee benefits | (r) Employee benefits Pursuant to relevant PRC regulations, the Company is required to make contributions to various defined contribution plans organized by municipal and provincial PRC governments. The contributions are made for each PRC employee at rates ranging from 16.3% to 26.5% on a standard salary base as determined by local social security bureau. Contributions to the defined contribution plans are charged to the consolidated statements of comprehensive (loss) income when the related service is provided. For the years ended December 31, 2020, 2021 and 2022, the costs of the Company’s obligations to the defined contribution plans amounted to RMB53,750, RMB133,012, and RMB133,013, respectively. The Company has no other obligation for the payment of employee benefits associated with these plans beyond the contributions described above. |
Income taxes | The Company follows the asset and liability method in accounting for income taxes in accordance to ASC Topic 740 “Taxation” (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Company adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Company recognizes in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company has elected to classify interest and penalties related to an unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of comprehensive loss. For the year ended December 31, 2022, there were no uncertain tax positions and the Company does not expect that the position of unrecognized tax benefits will materially change within the next twelve months. In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on above. |
Share based compensation | (t) Share based compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, net of estimated forfeitures, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. Forfeiture rates are estimated based on historical of employee turnover rates. |
Commitments and contingencies | (u) Commitments and contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. |
Loss per share | (v) (Loss) Earnings per share Basic (loss) earnings per Class A and Class B ordinary share is computed by dividing net (loss) earnings attributable to Tarena International’s Class A and Class B ordinary shareholders by the weighted average number of Class A and Class B ordinary shares outstanding during the year using the two-class method. Under the two-class method, net (loss) earnings attributable to Tarena International’s Class A and Class B ordinary shareholders is allocated between Class A and Class B ordinary shares and other participating securities, if any, based on participating rights in undistributed loss. Diluted (loss) earnings per share is calculated by dividing net (loss) earnings attributable to Tarena International’s Class A and Class B ordinary shareholders as adjusted for the effect of dilutive Class A and Class B ordinary share equivalents, if any, by the weighted average number of Class A and Class B ordinary and dilutive Class A and Class B ordinary share equivalents outstanding during the year. Class A and Class B ordinary share equivalents include the Class A and Class B ordinary shares issuable upon the exercise of the outstanding share options (using the treasury stock method). Potential dilutive securities are not included in the calculation of diluted (loss) earnings per Class A and Class B ordinary share if the impact is anti-dilutive. If there is a loss from continuing operations, diluted earnings per share (“EPS”) would be computed in the same manner as basic EPS is computed, even if an entity has net income after adjusting for a discontinued operation or an extraordinary item. |
Segment reporting | (w) Segment reporting The Company uses the management approach in determining its operating segments. The management approach considers the internal reporting used by the Company’s chief operating decision maker (“CODM”). The Company’s CODM has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the Company. Management has determined that the Company has two operating segments, which is the IT Professional Education segment and IT-focused Supplementary STEAM Education Services segment. The majority of the Company’s operations and customers are located in the PRC. Consequently, no geographic information is presented. |
Fair value measurements | (x) Fair value measurements ● Level 3 inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. In situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects management’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by management based on the best information available in the circumstances. Fair value measurements on a recurring basis The carrying amounts of cash and cash equivalents, current time deposits, accounts receivable, loans to employees, amounts due from related parties, accounts payable, amounts due to related parties, short-term bank loans, accrued expenses and other current liabilities as of December 31, 2021 and 2022 approximate their fair value because of short maturity of these instruments. The carrying amounts of non-current time deposits as of December 31, 2021 and 2022 approximates their fair value since the interest rates of the time deposits did not differ significantly from the market interest rates for similar types of time deposits. Fair value measurements on a non-recurring basis The Company measures certain financial assets, including the long-term investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. The Company’s non-financial assets, such as property and equipment, intangible assets, right-of-use assets and goodwill, would be measured at fair value only if they were determined to be impaired. |
Recently issued accounting standards | (y) Recently issued accounting standards The Company has evaluated pronouncements recently issued but not yet adopted. The adoption of these pronouncements is not expected to have a material impact on the Company’s consolidated financial statements. |
DESCRIPTION OF BUSINESS, ORGA_2
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |
Schedule of Variable Interest Entity Information | December 31, 2021 2022 RMB RMB Cash 8,204 29,567 Amounts due from Tarena International and its wholly-owned subsidiaries 141,104 106,922 Amounts due from a related party 4 4 Prepaid expenses and other current assets 27,435 10,602 Total current assets 176,747 147,095 Property and equipment, net 2,801 3,009 Long term investments, net 29,880 27,000 Right-of-use assets 11,108 8,738 Other non-current assets 1,057 647 Total assets 221,593 186,489 Short-term bank loans — 20,000 Accounts payable 320 42 Deferred revenue-current 167,224 166,542 Operating lease liabilities-current 3,949 4,124 Income taxes payable 2,045 1,213 Accrued expenses and other current liabilities 22,344 14,537 Amounts due to Tarena International and its wholly-owned subsidiaries 56,052 7,631 Total current liabilities 251,934 214,089 Deferred revenue-non current 134 135 Operating lease liabilities-non current 5,953 4,176 Other non-current liabilities 122 122 Total liabilities 258,143 218,522 Year Ended December 31, 2020 2021 2022 RMB RMB RMB Net revenues 127,043 140,541 158,347 Net (loss) income 32,869 (39,072) 1,255 Net cash provided by operating activities 112,106 10,308 7,722 Net cash provided by investing activities — — 19,975 Net cash (used in) provided by financing activities (110,985) (3,437) 5,762 |
Net revenues | Product concentration | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |
Schedule of Revenue Concentration | Year Ended December 31, 2020 2021 2022 Childhood & adolescent Robotics Programming 15.7 % 27.9 % 30.3 % Childhood & adolescent Computer Programming 20.6 % 19.4 % 20.4 % Java 13.8 % 11.8 % 10.3 % Digital Arts 16.8 % 11.0 % 6.2 % Total 66.9 % 70.1 % 67.2 % |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Cash, cash equivalents, time deposits and restricted cash | December 31, 2021 2022 RMB RMB RMB denominated bank deposits with financial institutions in the PRC 405,296 377,040 US dollar denominated bank deposits with financial institutions in the PRC 1,234 743 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 22,001 574 HK dollar denominated bank deposits with financial institutions in HK SAR 64 37 RMB denominated bank deposits with a financial institution in HK SAR 409 797 US dollar denominated bank deposits with a financial institution in the U.S. 229 251 TWD denominated bank deposits with a financial institution in Taiwan 1,035 184 CAD denominated bank deposits with financial institutions in HK SAR — 2 CAD denominated bank deposits with a financial institution in Canada 133 844 Total 430,401 380,472 |
Schedule of Property, Plant and Equipment, Useful Life | Office buildings 45 years Furniture 5 years Office equipment 3 Leasehold improvements Shorter of the lease term or the estimated useful life of the assets |
Schedule of Change In Refund Liability | For the years ending December 31, 2023 2024 Total RMB RMB RMB Revenue expected to be recognized on these contracts 6,691 7,360 14,051 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of Accounts receivable | December 31, 2021 2022 RMB RMB Accounts receivable: Gross 64,596 100,578 Unearned interest (1,061) (1,145) Total accounts receivable 63,535 99,433 Less: allowance for credit losses 14,987 30,518 Accounts receivable, net 48,548 68,915 |
Summary of classification of accounts receivable | December 31, 2021 2022 RMB RMB Accounts receivable – current portion 48,458 68,733 Accounts receivable – non-current portion 90 182 Total accounts receivable, net 48,548 68,915 |
Summary of allowance for doubtful accounts | Year Ended December 31, 2020 2021 2022 RMB RMB RMB Balance at the beginning of the year 2,251 9,214 14,987 Additions charged to bad debt expense 6,963 5,773 15,531 Balance at the end of the year 9,214 14,987 30,518 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |
Schedule of Prepaid expenses and other current assets | December 31, 2021 2022 RMB RMB Prepaid expenses and other current assets: Prepaid deposits (a) 24,518 29,915 Loans made to employees (b) 20,584 34,421 Prepaid value-added tax 18,350 16,736 Professional fee 18,244 16,078 Prepaid rental expenses 15,669 6,837 Long-term investment disposal receivable 13,000 — Inventory 5,870 7,186 Prepaid advertising expenses 2,654 9,743 Others 28,273 20,163 Total prepaid expenses and other current assets 147,162 141,079 Less: allowance for credit losses (c) 7,405 29,740 Prepaid expenses and other current assets, net 139,757 111,339 (a) It mainly included prepaid advertising deposits. (b) The Company provides short-term interest-free loans to employees for their purchase of residence or other personal needs. (c) It mainly included the allowance for credit losses on loans made to employees, including housing loans, living loans and imprest fund loans. December 31, 2020 2021 2022 RMB RMB RMB Balance at the beginning of the year — 7,405 7,405 Additions charged to bad debt expense 7,405 — 22,335 Balance at the end of the year 7,405 7,405 29,740 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of Property and Equipment | Property and equipment consist of the following: December 31, 2021 2022 RMB RMB Office buildings 169,761 32,988 Furniture 43,061 39,228 Office equipment 393,561 375,930 Leasehold improvements 247,652 220,113 Total property and equipment 854,035 668,259 Less: accumulated depreciation 554,594 545,425 Property and equipment, net 299,441 122,834 |
Schedule of Depreciation Expense | Depreciation expense for property and equipment was allocated to the following: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Cost of revenues 132,898 93,503 73,797 Selling and marketing expenses 18,137 11,999 7,098 General and administrative expenses 18,867 15,345 10,535 Research and development expenses 1,354 913 252 Total 171,256 121,760 91,682 |
LONG-TERM INVESTMENTS, NET (Tab
LONG-TERM INVESTMENTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM INVESTMENTS, NET | |
Schedule of Long-term investments | December 31, 2021 2022 RMB RMB Equity investments without readily determinable fair values A company providing mechanic training (a) 12,000 12,000 Other equity investments without readily determinable fair values (b) 17,880 15,000 Impairment of equity investments without readily determinable fair values — — Total equity investments without readily determinable fair values, net 29,880 27,000 Equity method investments Companies providing hockey program management 2,079 2,156 A company providing Internet product solutions (c) 15,014 17,551 Impairment of equity method investments (524) (524) Total equity method investments, net 16,569 19,183 Total long-term investments, net 46,449 46,183 (a) In October 2015, the Company paid RMB 12,000 in cash to acquire 2.86% of the total equity interest in an education company, which provides training for senior mechanic in vehicle maintenance and repair. No impairment loss was recognized as of December 31, 2021 and 2022, and for the years then ended. (b) During the years ended December 31, 2018 and 2019, the Company acquired minority equity interests in several third-party companies. The Company recognized no impairment loss for the years ended December 31, 2021 and 2022, respectively, and with an impairment balance of RMB 13,000 as of December 31, 2020, which has been written off during the year of 2021. (c) In January 2018, the Company paid RMB 14,000 in cash to acquire 20% of equity interest of a company which provides IT consulting services and programming and accounted for the investment using equity method. No impairment loss was recognized as of December 31, 2021 and 2022, and for the years then ended. |
OTHER NON-CURRENT ASSETS, NET (
OTHER NON-CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS, NET | |
Schedule of Other non-current assets | December 31, 2021 2022 RMB RMB Other non-current assets: Rent and property management deposits 48,531 34,830 Loans made to employees (a) 16,825 220 Prepayment for equipment and leasehold improvement 8,443 4,979 Others 2,241 8,838 Total other non-current assets, net 76,040 48,867 (a) Starting from 2016, the Company began to provide five-year loans with annual interest rates within a range from 3.325% to 5.0% to the employees for their purchase of houses. Some employees’ loans are pledged by their share options. The interest was paid monthly and the principal was repaid upon maturity . |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of Accrued Expenses and Other Current Liabilities | December 31, 2021 2022 RMB RMB Accrued payroll and employee benefits 201,657 153,631 Refund liability 147,210 148,245 Recharge card (a) 76,060 156,003 Professional service fee 41,276 35,469 Accrued compensation for minority shareholder litigation — 20,894 VAT and other tax payables 18,513 19,597 Payable for advertisement 18,231 18,696 Guarantee liability 9,744 11,647 Rental fee 7,414 5,850 Others 43,498 33,484 Total 563,603 603,516 (a) Recharge card is the amount that customers paid in advance without desginated enrollment contract for IT-focused supplementary STEAM education training courses. |
NET REVENUES (Tables)
NET REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET REVENUES | |
Schedule of net revenues | Year Ended December 31, 2020 2021 2022 RMB RMB RMB Tuition fee 1,786,230 2,281,098 2,316,428 Certification service fee 41,961 60,892 123,064 Loan referral service fee 7,801 6,332 691 Others 53,135 37,383 20,749 Business taxes and surcharges (4,252) (7,070) (5,361) Total net revenues 1,884,875 2,378,635 2,455,571 Year Ended December 31, 2020 2021 2022 RMB RMB RMB Timing of revenue recognition Services transferred at a point in time 102,897 104,607 144,504 Services transferred over time 1,781,978 2,274,028 2,311,067 Total net revenues 1,884,875 2,378,635 2,455,571 Year Ended December 31, 2020 2021 2022 RMB RMB RMB Guarantee service 13,008 7,885 12,503 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of of (loss) income before income taxes | The components of (loss) income before income taxes are as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB PRC (739,036) (342,944) 161,340 Hong Kong (8,280) (1,751) (669) Cayman Islands (54,913) (13,562) (50,283) Taiwan (1,549) (1,905) (2,318) Canada (2,449) (1,561) (2,003) Total (loss) income before income taxes (806,227) (361,723) 106,067 |
Schedule of Income Tax (expense) benefit | Year Ended December 31, 2020 2021 2022 RMB RMB RMB Current income tax expense (7,397) (12,837) (19,961) Deferred income tax benefit (expense) 42,431 (101,220) (873) Total 35,034 (114,057) (20,834) |
Schedule of Income Tax Rate Reconciliation | Year Ended December 31, 2020 2021 2022 PRC statutory income tax rate 25.0 % 25.0 % 25.0 % Increase (decrease) in effective income tax rate resulting from: Impact of different tax rates in other jurisdictions (1.8) % (1.1) % 12.3 % Research and development bonus deduction 2.0 % 3.4 % (6.1) % Non-deductible expenses (1.6) % (2.0) % 7.1 % Tax impact of investment loss — — (14.1) Preferential tax rates (11.2) % (9.5) % (47.4) % Change of tax rates (2.9) % (5.5) % (2.4) % Change in valuation allowance (5.2) % (41.8) % 45.2 % Actual income tax expense 4.3 % (31.5) % 19.6 % |
Schedule of Deferred Income Tax Assets | December 31, 2021 2022 RMB RMB Deferred income tax assets: Impairment of long-term investments 11,750 11,750 Tax loss carry forwards 281,813 354,806 Advertising expense 30,955 35,210 Others 5,326 6,069 Total deferred income tax assets 329,844 407,835 Valuation allowance (288,844) (367,708) Deferred income tax assets, net 41,000 40,127 Deferred income tax liabilities: Valuation appreciation of intangible assets 1,067 750 Deferred income tax liabilities* 1,067 750 * Deferred income tax liabilities are combined in other non-current liabilities. |
Summary of Valuation Allowance | The movements of the valuation allowance are as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Balance at the beginning of the year 139,177 146,371 288,844 Additions of valuation allowance 46,755 168,163 79,445 Reduction of valuation allowance (4,643) (16,752) (20,162) Reversal of valuation allowance — (188) (11,297) Change of tax rates (30,671) (8,038) 31,171 Change of decrease related to subsidiary disposals and expiration (4,247) (712) (293) Balance at the end of the year 146,371 288,844 367,708 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of Related Party Transactions | Related party balances December 31, 2021 2022 RMB RMB Amounts due from related parties Ningxia Company (i) 202 251 Others 637 447 Total 839 698 Notes: (i) The balance resulted from the franchise service income. Related party transactions The major related party transactions for the years ended December 31, 2020, 2021 and 2022 are summarized as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Cash collection service expense to Chuanbang (a) 79 39 — Franchise income from Bolton School 518 462 453 Franchise, training and consulting service income from Ningxia Company (11) — — Training service expense to Bolton School 305 811 429 Technical consulting service expenses and labor expenses to Beijing Huimoer 148 — — Interest income from loan to Ms. Han Lijuan 81 — — Cash collection on behalf of An Yue — — 1,225 Notes: (a) Pursuant to an agreement between Chuanbang and the Company, beginning August 2013, Chuanbang provides cash collection service on the Company’s accounts receivable. The fee for the service is calculated based on 2% ~ 20% of the amount collected. |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE BASED COMPENSATION | |
Summary of share options activity | Weighted Weighted Average Number of Average Remaining Aggregate Share Exercise Price Contractual Intrinsic Options US$ Years Value US$ Outstanding at December 31, 2021 2,740,020 1.67 6.90 1,976 Granted 1,166,980 0.01 — — Exercised (398,000) 0.01 — — Forfeited (152,365) 2.44 — — Outstanding at December 31, 2022 3,356,635 0.10 6.89 2,994 Vested and expected to vest as of December 31, 2022 4,821,350 0.29 5.70 4,378 Exercisable as of December 31, 2022 2,408,105 0.65 5.96 2,118 |
Summary of fair value assumptions | The Company calculated the fair value of the share options on the grant date using the Binomial option-pricing valuation model. The assumptions used in the valuation model are summarized in the following table. Year Ended December 31, 2020 2021 2022 Expected volatility 72.22%-78.51% 73.76%-75.78% 75.77%-77.77% Expected dividends yield 0% 0% 0% Exercise multiple 2.2-2.8 2.2-2.8 2.2-2.8 Risk-free interest rate per annum 0.79%-2.08% 1.09%-1.66% 1.66%-4.10% The fair value of underlying ordinary shares (per share) US$1.71-US$4.65 US$0.20-US$2.92 US$0.36-US$1.13 |
Schedule of fair values of the options granted | Year Ended December 31, 2020 2021 2022 US$ US$ US$ Weighted average grant date fair value of option per share 2.52 0.82 0.92 Aggregate grant date fair value of options 3,115 720 1,079 |
Summary of the non-vested shares activity | Number of Non- Weighted Average vested Shares Grant Date Fair Value US$ Outstanding as of December 31, 2021 159,385 7.11 Granted 387,170 0.47 Vested (185,685) 2.62 Forfeited (215,950) 0.89 Outstanding as of December 31, 2022 144,920 4.38 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
(LOSS) EARNINGS PER SHARE | |
Basic and diluted (loss) earning per share | Year Ended December 31, 2020 2021 2022 RMB RMB RMB Numerator: Net (loss) income attributable to Class A and Class B ordinary shareholders for basic and diluted earnings per share (766,643) (474,547) 83,520 Denominator: Denominator for basic earnings per share: Weighted average number of Class A and Class B ordinary shares outstanding 54,341,213 56,260,925 54,657,222 Dilutive effect of outstanding share options — — 3,073,450 Denominator for diluted (loss) earnings per share 54,341,213 56,260,925 57,730,672 Basic (loss) earnings per ADS (70.54) (42.17) 7.64 Diluted (loss) earnings per ADS (70.54) (42.17) 7.23 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Schedule of components of rental expense | The components of rental expense for the years ended December 31, 2020, 2021 and 2022 consist as follows: Year Ended December 31, 2020 2021 2022 RMB RMB RMB Short-term rental expense 114,723 35,707 20,379 Operating lease expense excluding short-term rental expense 170,022 250,043 194,742 |
Schedule of other information related to operating leases | Year Ended December 31, 2020 2021 2022 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: 244,491 228,857 173,352 Right-of-use assets obtained in exchange for newlease liabilities: 484,202 185,875 112,966 |
Schedule of maturities of lease liabilities | RMB Year ending December 31, 2023 211,376 2024 104,068 2025 50,572 2026 18,296 2027 4,499 2028 and thereafter 1,021 Total lease payments 389,832 Less: imputed interest 23,127 Total 366,705 Less: current portion 197,969 Non-current portion 168,736 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
Schedule of segment information | Year Ended December 31, 2022 IT IT-focused Professional Supplementary STEAM Education Education Total RMB RMB RMB Net revenues 1,068,230 1,399,844 2,468,074 Cost of revenues (320,961) (735,082) (1,056,043) Gross profit 747,269 664,762 1,412,031 Year Ended December 31, 2021 IT IT-focused Professional Supplementary STEAM Education Education Total RMB RMB RMB Net revenues 1,150,247 1,236,273 2,386,520 Cost of revenues (409,326) (792,093) (1,201,419) Gross profit 740,921 444,180 1,185,101 Year Ended December 31, 2020 IT IT-focused Professional Supplementary STEAM Education Education Total RMB RMB RMB Net revenues 1,136,043 761,840 1,897,883 Cost of revenues (420,349) (646,493) (1,066,842) Gross profit 715,694 115,347 831,041 |
PARENT ONLY FINANCIAL INFORMA_2
PARENT ONLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PARENT ONLY FINANCIAL INFORMATION | |
Schedule of Condensed Balance Sheets | December 31, 2021 2022 2022 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 23,506 1,844 267 Prepaid expenses and other current assets 24 550 80 Due from subsidaries 407,795 437,987 63,502 Total current assets 431,325 440,381 63,849 Investment in subsidiaries (1,700,223) (1,574,974) (228,350) Total assets (1,268,898) (1,134,593) (164,501) LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other current liabilities (1) 5,781 30,392 4,406 Due to intercompany 309,241 334,909 48,557 Total current liabilities 315,022 365,301 52,963 Total liabilities 315,022 365,301 52,963 Commitments and contingencies — — — Shareholders’ deficit: Class A ordinary shares (US$0.001 par value, 860,000,000 shares authorized, 56,593,157 and 57,176,842 shares issued, 49,393,287 and 46,567,892 shares outstanding as of December 31, 2021 and 2022, respectively) 355 359 52 Class B ordinary shares (US$0.001 par value, 40,000,000 shares authorized, 7,206,059 shares issued outstanding December 31, 2021 74 74 11 Treasury shares (7,199,870 and 10,608,950 Class A ordinary shares as of December 31, 2021 and 2022, at cost) (459,815) (476,918) (69,147) Additional paid-in capital 1,347,205 1,363,845 197,739 Accumulated other comprehensive income 48,699 49,664 7,201 Accumulated deficit (2,520,438) (2,436,918) (353,320) Total shareholders’ deficit (1,583,920) (1,499,894) (217,464) Total liabilities and shareholders’ deficit (1,268,898) (1,134,593) (164,501) (1) Mainly related to repurchase of treasury shares. |
Schedule of Condensed Statements of Comprehensive Profit/(Loss) | Year Ended December 31, 2020 2021 2022 2022 RMB RMB RMB US$ Selling and marketing expenses (693) (323) (8) (1) General and administrative expenses (16,890) 5,955 (34,558) (5,010) Operating (loss) income (17,583) 5,632 (34,566) (5,011) Equity in (loss) income of subsidiaries (748,006) (480,114) 117,266 17,001 Foreign currency exchange (loss) gains (1,109) (268) 2,480 360 Interest income (expense) 55 203 (1,660) (241) (Loss) income before income taxes (766,643) (474,547) 83,520 12,109 Income tax expense — — — — Net (loss) income (766,643) (474,547) 83,520 12,109 Other comprehensive (loss) income Foreign currency translation adjustment (2,266) (421) 965 140 Comprehensive (loss) income (768,909) (474,968) 84,485 12,249 |
Schedule of Condensed Statements of Cash Flows | Year Ended December 31, 2020 2021 2022 2022 RMB RMB RMB US$ Operating activities: Net cash (used in) provided by operating activities (8,010) 14,458 (5,699) (826) Financing activities: Issuance of Class A ordinary shares in connection with exercise of share options 3,354 3,947 107 16 Repurchase of treasury shares — — (17,103) (2,480) Net cash provided by (used in) financing activities 3,354 3,947 (16,996) (2,464) Changes in cash and cash equivalents (4,656) 18,405 (22,695) (3,290) Effect of foreign currency exchange rate changes on cash and cash equivalents 850 1,308 1,033 150 Net (decrease) increase in cash and cash equivalents (3,806) 19,713 (21,662) (3,140) Cash and cash equivalents at beginning of year 7,599 3,793 23,506 3,407 Cash and cash equivalents at end of year 3,793 23,506 1,844 267 |
DESCRIPTION OF BUSINESS, ORGA_3
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (VIE and Non-VIE Financial Information) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Cash | ¥ 356,237 | ¥ 423,766 | $ 51,650 | ||
Amounts due from related parties | 698 | 839 | 101 | ||
Prepaid expenses and other current assets | 111,339 | 139,757 | 16,142 | ||
Total current assets | 667,553 | 619,332 | 96,786 | ||
Property and equipment, net | 122,834 | 299,441 | 17,809 | ||
Right-of-use assets | 350,501 | 495,936 | 50,818 | ||
Other current assets | 20,163 | 28,273 | |||
Inter-Group balances due from VIE and VIE Subsidiaries/Non-VIE | 698 | 839 | 101 | ||
Net cash used in financing activities | (48,867) | (76,040) | (7,085) | ||
Total Assets | 1,337,500 | 1,641,782 | 193,919 | ||
Short-term bank loans | 52,000 | 30,000 | 7,539 | ||
Accounts payable | 6,330 | 8,914 | 918 | ||
Deferred revenue- current | 1,688,610 | 2,008,078 | 244,825 | ||
Operating lease liabilities-current | 197,969 | 239,937 | 28,703 | ||
Income taxes payable | 108,434 | 89,000 | 15,721 | ||
Accrued expenses and other current liabilities | 603,516 | 563,603 | 87,502 | ||
Total current liabilities | 2,656,946 | 2,940,086 | 385,221 | ||
Deferred revenue- non current | 14,051 | 16,774 | 2,037 | ||
Operating lease liabilities-non current | 168,736 | 272,575 | 24,464 | ||
Other non-current liabilities | 4,448 | 4,767 | 645 | ||
Total liabilities | 2,844,181 | 3,234,202 | 412,367 | ||
Equity method investment | 19,183 | 16,569 | |||
Total Liabilities | 2,844,181 | 3,234,202 | $ 412,367 | ||
Net revenues | 2,468,074 | $ 357,837 | 2,386,520 | ¥ 1,897,883 | |
Net cash used in investing activities | ¥ (22,709) | $ (3,292) | ¥ 33,693 | (657) | |
Equity Method Investments, Percentage of Equity Acquired through Options | 100% | 100% | |||
Mr. Han | Tarena Entities | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Equity Method Investments, Percentage of Equity Acquired through Options | 69% | 69% | 67.20% | ||
Equity Method Investment, Ownership Percentage | 69% | 69% | |||
Mr. Han | Tongcheng Jinqiao | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Equity Method Investments, Percentage of Equity Acquired through Options | 70% | 70% | |||
Mr. Li | Tarena Entities | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Equity Method Investment, Ownership Percentage | 0.30% | 0.30% | |||
Loan Agreements | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Debt Instrument, Initial Expiration Year | 2026 | 2026 | |||
Loan Agreements | Tongcheng Jinqiao | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Debt Instrument, Face Amount | ¥ 5,000 | ||||
Loan Agreements | Equity Holders | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Debt Instrument, Face Amount | 6,000 | ||||
Parent Company | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Cash | 127,043 | ||||
Amounts due from related parties | 437,987 | ¥ 407,795 | 32,869 | $ 63,502 | |
Prepaid expenses and other current assets | 550 | 24 | 80 | ||
Total current assets | 440,381 | 431,325 | 63,849 | ||
Other current assets | 112,106 | ||||
Inter-Group balances due from VIE and VIE Subsidiaries/Non-VIE | 437,987 | 407,795 | 32,869 | 63,502 | |
Net cash used in financing activities | ¥ (110,985) | ||||
Total Assets | (1,134,593) | (1,268,898) | (164,501) | ||
Accrued expenses and other current liabilities | 30,392 | 5,781 | 4,406 | ||
Total current liabilities | 365,301 | 315,022 | 52,963 | ||
Total liabilities | 365,301 | 315,022 | 52,963 | ||
Total Liabilities | 365,301 | 315,022 | $ 52,963 | ||
Parent Company | Tarena Entities | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Cash | 8,204 | ||||
Amounts due from Tarena International and its wholly-owned subsidiaries | 141,104 | ||||
Amounts due from related parties | 4 | ||||
Prepaid expenses and other current assets | 27,435 | ||||
Total current assets | 176,747 | ||||
Property and equipment, net | 2,801 | ||||
Long term investments, net | 29,880 | ||||
Right-of-use assets | 11,108 | ||||
Inter-Group balances due from VIE and VIE Subsidiaries/Non-VIE | 4 | ||||
Net cash used in financing activities | (1,057) | ||||
Total Assets | 221,593 | ||||
Accounts payable | 320 | ||||
Deferred revenue- current | 167,224 | ||||
Operating lease liabilities-current | 3,949 | ||||
Income taxes payable | 2,045 | ||||
Accrued expenses and other current liabilities | 22,344 | ||||
Amounts due to Tarena International and its wholly-owned subsidiaries | 56,052 | ||||
Total current liabilities | 251,934 | ||||
Deferred revenue- non current | 134 | ||||
Operating lease liabilities-non current | 5,953 | ||||
Other non-current liabilities | 122 | ||||
Total liabilities | 258,143 | ||||
Total Liabilities | 258,143 | ||||
VIE and VIE Subsidiaries Consolidated | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Cash | 140,541 | ||||
Amounts due from related parties | 39,072 | ||||
Other current assets | 10,308 | ||||
Inter-Group balances due from VIE and VIE Subsidiaries/Non-VIE | 39,072 | ||||
Net cash used in financing activities | ¥ (3,437) | ||||
VIE and VIE Subsidiaries Consolidated | Tarena Entities | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Cash | 29,567 | ||||
Amounts due from Tarena International and its wholly-owned subsidiaries | 106,922 | ||||
Amounts due from related parties | 4 | ||||
Prepaid expenses and other current assets | 10,602 | ||||
Total current assets | 147,095 | ||||
Property and equipment, net | 3,009 | ||||
Long term investments, net | 27,000 | ||||
Right-of-use assets | 8,738 | ||||
Inter-Group balances due from VIE and VIE Subsidiaries/Non-VIE | 4 | ||||
Net cash used in financing activities | (647) | ||||
Total Assets | 186,489 | ||||
Short-term bank loans | 20,000 | ||||
Accounts payable | 42 | ||||
Deferred revenue- current | 166,542 | ||||
Operating lease liabilities-current | 4,124 | ||||
Income taxes payable | 1,213 | ||||
Accrued expenses and other current liabilities | 14,537 | ||||
Amounts due to Tarena International and its wholly-owned subsidiaries | 7,631 | ||||
Total current liabilities | 214,089 | ||||
Deferred revenue- non current | 135 | ||||
Operating lease liabilities-non current | 4,176 | ||||
Other non-current liabilities | 122 | ||||
Total liabilities | 218,522 | ||||
Total Liabilities | 218,522 | ||||
Non-VIE Subsidiaries Consolidated | |||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||||
Cash | 158,347 | ||||
Amounts due from related parties | 1,255 | ||||
Other current assets | 7,722 | ||||
Inter-Group balances due from VIE and VIE Subsidiaries/Non-VIE | 1,255 | ||||
Net cash used in financing activities | 5,762 | ||||
Equity method investment | ¥ 19,975 |
DESCRIPTION OF BUSINESS, ORGA_4
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (Significant Concentrations and Risks) (Details) - Net revenues | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Product concentration | K-12 Robotics Programming | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 30.30% | 27.90% | 15.70% |
Product concentration | K-12 Programming | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 20.40% | 19.40% | 20.60% |
Product concentration | Java | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 10.30% | 11.80% | 13.80% |
Product concentration | Digital Arts | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 6.20% | 11% | 16.80% |
Product concentration | Major Products | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 67.20% | 70.10% | 66.90% |
Geographic concentration | Beijing | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 14.50% | 16.20% | 17.20% |
Geographic concentration | Hangzhou | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 10.20% | 11.10% | 13.90% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2022 CNY (¥) building segment | Dec. 31, 2022 USD ($) building segment | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2024 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 USD ($) | Aug. 07, 2021 CNY (¥) | Dec. 31, 2019 CNY (¥) | |
Significant Accounting Policies [Line Items] | |||||||||
Net loss | ¥ (85,233) | $ (12,357) | ¥ 475,780 | ¥ 771,193 | |||||
Total shareholders deficit | 1,506,681 | 1,592,420 | 1,139,269 | ¥ 403,064 | |||||
Net cash provided by/(used in) operating activities | (27,528) | $ (3,992) | 8,610 | (108,821) | |||||
Deferred revenue liability | 1,370,448 | 1,221,729 | |||||||
Restricted cash | ¥ 17,730 | 255 | 38,369 | $ 2,571 | |||||
Number of office buildings | building | 2 | 2 | |||||||
Cash, cash equivalents, time deposits and restricted time deposits | ¥ 380,472 | 430,401 | |||||||
Impairment of long-lived assets | 0 | ||||||||
Aggregate price | 102,800 | ||||||||
Carrying amount | 122,834 | 299,441 | $ 17,809 | ||||||
Impairment loss | 11,600 | ||||||||
Goodwill Impairment | 0 | 0 | |||||||
Deferred revenue | 1,702,661 | 2,024,852 | |||||||
Deferred income tax (benefit) expense | 873 | $ 127 | 101,220 | (42,431) | |||||
Revenue expected to be recognized on these contracts | 14,051 | ||||||||
Advertising costs | 175,648 | 229,571 | 297,484 | ||||||
Net revenues | 2,468,074 | 357,837 | 2,386,520 | 1,897,883 | |||||
Contributions to employee benefits | 133,013 | 133,012 | 53,750 | ||||||
Carrying value of office buildings pledged for the loan | ¥ 95 | ||||||||
Research and development expenses | ¥ 72,028 | $ 10,443 | 106,098 | 100,466 | |||||
Number of operating segments | segment | 2 | 2 | |||||||
Office building in Beijing | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Aggregate price | ¥ 102,800 | ||||||||
Agreed consideration | 93,000 | ||||||||
Deposits revived | 18,600 | ||||||||
Carrying amount | 95,000 | ||||||||
Office building in Qingdao | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Aggregate price | 24,600 | ||||||||
Agreed consideration | 26,100 | ||||||||
Deposits revived | 200 | ||||||||
Carrying amount | 23,100 | ||||||||
Subsequent event | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Revenue expected to be recognized on these contracts | ¥ 7,360 | ¥ 6,691 | |||||||
Grant | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Net revenues | 6,741 | 3,760 | ¥ 4,735 | ||||||
PRC | RMB Denominated Bank Deposits | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 377,040 | 405,296 | |||||||
PRC | US Dollar Denominated Bank Deposits | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 743 | 1,234 | |||||||
Hong Kong | RMB Denominated Bank Deposits | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 797 | 409 | |||||||
Hong Kong | US Dollar Denominated Bank Deposits | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 574 | 22,001 | |||||||
Hong Kong | HK Dollar Denominated Bank Deposits | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 37 | 64 | |||||||
Hong Kong | CAD denominated bank deposits with financial institutions in HK SAR | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 2 | ||||||||
US | US Dollar Denominated Bank Deposits | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 251 | 229 | |||||||
Taiwan | TWD Denominated Bank Deposit | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | 184 | 1,035 | |||||||
Canada | CAD denominated bank deposits with financial institutions in HK SAR | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Cash, cash equivalents, time deposits and restricted time deposits | ¥ 844 | ¥ 133 | |||||||
Office buildings | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Useful life | 45 years | 45 years | |||||||
Furniture | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Useful life | 5 years | 5 years | |||||||
Minimum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Business and Value Added Taxes | 3% | 3% | |||||||
Contributions to employee benefits, percentage of salary | 16.30% | 16.30% | |||||||
Minimum | Office equipment | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Useful life | 3 years | 3 years | |||||||
Maximum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Business and Value Added Taxes | 13% | 13% | |||||||
Contributions to employee benefits, percentage of salary | 26.50% | 26.50% | |||||||
Maximum | Office equipment | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Useful life | 5 years | 5 years |
ACCOUNTS RECEIVABLE, NET - Sche
ACCOUNTS RECEIVABLE, NET - Schedule of Accounts Receivable (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts receivable: | ||
Gross | ¥ 100,578 | ¥ 64,596 |
Unearned interest | (1,145) | (1,061) |
Total accounts receivable | 99,433 | 63,535 |
Less: allowance for credit losses | 30,518 | 14,987 |
Accounts receivable, net | ¥ 68,915 | ¥ 48,548 |
ACCOUNTS RECEIVABLE, NET - Clas
ACCOUNTS RECEIVABLE, NET - Classification of Accounts Receivable (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
ACCOUNTS RECEIVABLE, NET | |||
Accounts receivable - current portion | ¥ 68,733 | $ 9,965 | ¥ 48,458 |
Accounts receivable - non-current portion | 182 | $ 26 | 90 |
Accounts receivable, net | ¥ 68,915 | ¥ 48,548 |
ACCOUNTS RECEIVABLE, NET - Summ
ACCOUNTS RECEIVABLE, NET - Summary of Allowance for Doubtful Accounts (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Balance at the beginning of the year | ¥ 7,405 | ¥ 7,405 | |
Additions charged to bad debt expense | 22,335 | ¥ 7,405 | |
Balance at the end of the year | 29,740 | 7,405 | 7,405 |
Accounts receivable | |||
Balance at the beginning of the year | 14,987 | 9,214 | 2,251 |
Additions charged to bad debt expense | 15,531 | 5,773 | 6,963 |
Balance at the end of the year | ¥ 30,518 | ¥ 14,987 | ¥ 9,214 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET - (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |||
Prepaid deposits | ¥ 29,915 | ¥ 24,518 | |
Loans made to employees | 34,421 | 20,584 | |
Prepaid value-added tax | 16,736 | 18,350 | |
Professional fee | 16,078 | 18,244 | |
Prepaid rental expenses | 6,837 | 15,669 | |
Long-term investment disposal receivable | 13,000 | ||
Inventory | 7,186 | 5,870 | |
Prepaid advertising expenses | 9,743 | 2,654 | |
Others | 20,163 | 28,273 | |
Total prepaid expenses and other current assets | 141,079 | 147,162 | |
Less: allowance for credit losses | 29,740 | 7,405 | |
Prepaid expenses and other current assets | ¥ 111,339 | $ 16,142 | ¥ 139,757 |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Allowance for doubtful debts (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Balance at the beginning of the year | ¥ 7,405 | ¥ 7,405 | |
Additions charged to bad debt expense | 22,335 | ¥ 7,405 | |
Balance at the end of the year | ¥ 29,740 | ¥ 7,405 | ¥ 7,405 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Property, Plant and Equipment [Line Items] | |||
Property and equipment | ¥ 668,259 | ¥ 854,035 | |
Less: accumulated depreciation | 545,425 | 554,594 | |
Property and equipment, net | 122,834 | $ 17,809 | 299,441 |
Office buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 32,988 | 169,761 | |
Furniture | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 39,228 | 43,061 | |
Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 375,930 | 393,561 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | ¥ 220,113 | ¥ 247,652 |
PROPERTY AND EQUIPMENT, NET -_2
PROPERTY AND EQUIPMENT, NET - Schedule of Depreciation Expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | ¥ 91,682 | ¥ 121,760 | ¥ 171,256 |
Cost of sales | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | 73,797 | 93,503 | 132,898 |
Selling and marketing expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | 7,098 | 11,999 | 18,137 |
General and administrative expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | 10,535 | 15,345 | 18,867 |
Research and development expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | ¥ 252 | ¥ 913 | ¥ 1,354 |
LONG-TERM INVESTMENTS, NET (Det
LONG-TERM INVESTMENTS, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | |
Equity investments without readily determinable fair values | ||||
Total equity investments without readily determinable fair values, net | ¥ 27,000 | ¥ 29,880 | ||
Equity method investments | ||||
Impairment of equity method investments | (524) | (524) | ||
Total equity method investments, net | 19,183 | 16,569 | ||
Total long-term investments, net | 46,183 | $ 6,696 | 46,449 | |
A company providing mechanic training | ||||
Equity investments without readily determinable fair values | ||||
Equity investments without readily determinable fair values | [1] | 12,000 | 12,000 | |
Other equity investments without readily determinable fair values | ||||
Equity investments without readily determinable fair values | ||||
Equity investments without readily determinable fair values | [2] | 15,000 | 17,880 | |
Impairment of equity investments without readily determinable fair values | 13,000 | |||
Companies providing hockey program management | ||||
Equity method investments | ||||
Total equity method investments, net | [3] | 2,156 | 2,079 | |
A company providing Internet product solutions | ||||
Equity investments without readily determinable fair values | ||||
Impairment of equity investments without readily determinable fair values | 0 | 0 | ||
Equity method investments | ||||
Total equity method investments, net | ¥ 17,551 | ¥ 15,014 | ||
[1] In October 2015, the Company paid RMB 12,000 in cash to acquire 2.86% of the total equity interest in an education company, which provides training for senior mechanic in vehicle maintenance and repair. No impairment loss was recognized as of December 31, 2021 and 2022, and for the years then ended. During the years ended December 31, 2018 and 2019, the Company acquired minority equity interests in several third-party companies. The Company recognized no impairment loss for the years ended December 31, 2021 and 2022, respectively, and with an impairment balance of RMB 13,000 as of December 31, 2020, which has been written off during the year of 2021. In January 2018, the Company paid RMB 14,000 in cash to acquire 20% of equity interest of a company which provides IT consulting services and programming and accounted for the investment using equity method. No impairment loss was recognized as of December 31, 2021 and 2022, and for the years then ended. |
LONG-TERM INVESTMENTS, NET - Ad
LONG-TERM INVESTMENTS, NET - Additional information (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Oct. 31, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Investments and Cost Method Investments [Line Items] | ||||
Impairment of long-term investments | ¥ (524) | ¥ (524) | ||
A company providing mechanic training | ||||
Schedule of Investments and Cost Method Investments [Line Items] | ||||
Payment to acquire cost method investment | ¥ 12,000 | |||
Equity investment , cost method percentage | 2.86% | |||
Impairment of equity investments without readily determinable fair values | 0 | 0 | ||
Other equity investments without readily determinable fair values | ||||
Schedule of Investments and Cost Method Investments [Line Items] | ||||
Impairment of equity investments without readily determinable fair values | 0 | 0 | ||
Impairment of equity investments without readily determinable fair values | 13,000 | |||
A company providing Internet product solutions | ||||
Schedule of Investments and Cost Method Investments [Line Items] | ||||
Equity investment percentage | 20% | |||
Impairment of equity investments without readily determinable fair values | ¥ 0 | ¥ 0 | ||
Payment to acquire investment | ¥ 14,000 |
OTHER NON-CURRENT ASSETS, NET_2
OTHER NON-CURRENT ASSETS, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Other non-current assets: | |||
Rent and property management deposits | ¥ 34,830 | ¥ 48,531 | |
Loans made to employees | 220 | 16,825 | |
Prepayment for equipment and leasehold improvement | 4,979 | 8,443 | |
Others | 8,838 | 2,241 | |
Total other non-current assets, net | ¥ 48,867 | $ 7,085 | ¥ 76,040 |
OTHER NON-CURRENT ASSETS, NET -
OTHER NON-CURRENT ASSETS, NET - Additional information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets, Noncurrent Disclosure [Line Items] | |
Term of loans receivable | 5 years |
Housing loans made to employees | Minimum | |
Other Assets, Noncurrent Disclosure [Line Items] | |
Annual interest rate (as a percent) | 3.325% |
Housing loans made to employees | Maximum | |
Other Assets, Noncurrent Disclosure [Line Items] | |
Annual interest rate (as a percent) | 5% |
SHORT-TERM BANK LOANS (Details)
SHORT-TERM BANK LOANS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 08, 2022 CNY (¥) | Oct. 12, 2022 CNY (¥) | Mar. 09, 2022 CNY (¥) | Aug. 07, 2021 CNY (¥) | |
SHORT-TERM BANK LOANS | ||||||||
Carrying value of office buildings pledged for the loan | ¥ 95 | |||||||
Proceeds from bank loan | ¥ 52,000 | $ 7,539 | ¥ 30,000 | ¥ 10,710 | ||||
Interest rate for the loan | 5.30% | |||||||
Borrowing capacity | ¥ 52,000 | |||||||
Debt term | 12 months | 12 months | ||||||
Interest expense | ¥ 1,508 | ¥ 322 | ¥ 5,047 | |||||
Minimum | ||||||||
SHORT-TERM BANK LOANS | ||||||||
Interest rate for the loan | 4% | |||||||
Maximum | ||||||||
SHORT-TERM BANK LOANS | ||||||||
Interest rate for the loan | 4.90% | |||||||
Line of credit contract with Bank of Beijing | ||||||||
SHORT-TERM BANK LOANS | ||||||||
Borrowing capacity | ¥ 3,000 | |||||||
Line Of Credit Contract With China Merchants Bank Member | ||||||||
SHORT-TERM BANK LOANS | ||||||||
Borrowing capacity | ¥ 20,000 | ¥ 30,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Accrued payroll and employee benefits | ¥ 153,631 | ¥ 201,657 | |
Refund liability | 148,245 | 147,210 | |
Recharge card | 156,003 | 76,060 | |
Professional service fee | 35,469 | 41,276 | |
Accrued compensation for minority shareholder litigation | 20,894 | ||
VAT and other tax payables | 19,597 | 18,513 | |
Payable for advertisement | 18,696 | 18,231 | |
Guarantee liability | 11,647 | 9,744 | |
Rental fee | 5,850 | 7,414 | |
Others | 33,484 | 43,498 | |
Total | ¥ 603,516 | $ 87,502 | ¥ 563,603 |
NET REVENUES (Details)
NET REVENUES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
Net Revenues | ||||
Business taxes and surcharges | ¥ (5,361) | ¥ (7,070) | ¥ (4,252) | |
Total net revenues | 2,455,571 | 2,378,635 | 1,884,875 | |
Net revenues | 2,468,074 | $ 357,837 | 2,386,520 | 1,897,883 |
Services transferred at a point in time | ||||
Net Revenues | ||||
Net revenues | 144,504 | 104,607 | 102,897 | |
Services transferred over time | ||||
Net Revenues | ||||
Net revenues | 2,311,067 | 2,274,028 | 1,781,978 | |
Tuition fee | ||||
Net Revenues | ||||
Net revenues | 2,316,428 | 2,281,098 | 1,786,230 | |
Certification service fee | ||||
Net Revenues | ||||
Net revenues | 123,064 | 60,892 | 41,961 | |
Loan referral service fee | ||||
Net Revenues | ||||
Net revenues | 691 | 6,332 | 7,801 | |
Others. | ||||
Net Revenues | ||||
Net revenues | 20,749 | 37,383 | 53,135 | |
Guarantee service | ||||
Net Revenues | ||||
Net revenues | ¥ 12,503 | ¥ 7,885 | ¥ 13,008 |
INCOME TAXES - Schedule of (los
INCOME TAXES - Schedule of (loss) income before income taxes (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
INCOME TAXES | ||||
Total (loss) income before income taxes | ¥ 106,067 | $ 15,378 | ¥ (361,723) | ¥ (806,227) |
PRC | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | 161,340 | (342,944) | (739,036) | |
Hong Kong | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | (669) | (1,751) | (8,280) | |
Cayman Islands | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | (50,283) | (13,562) | (54,913) | |
Taiwan | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | (2,318) | (1,905) | (1,549) | |
Canada | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | ¥ (2,003) | ¥ (1,561) | ¥ (2,449) |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Expense benefit (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
INCOME TAXES | ||||
Current income tax expense | ¥ (19,961) | ¥ (12,837) | ¥ (7,397) | |
Deferred income tax benefit (expense) | (873) | $ (127) | (101,220) | 42,431 |
Total | ¥ (20,834) | $ (3,021) | ¥ (114,057) | ¥ 35,034 |
INCOME TAXES - Schedule of In_2
INCOME TAXES - Schedule of Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
PRC statutory income tax rate | 25% | 25% | 25% |
Impact of different tax rates in other jurisdictions | 12.30% | (1.10%) | (1.80%) |
Research and development bonus deduction | (6.10%) | 3.40% | 2% |
Non-deductible selling, general and administrative expenses | |||
Non-deductible expenses | 7.10% | (2.00%) | (1.60%) |
Tax impact of investment loss | (14.10%) | ||
Preferential tax rates | (47.40%) | (9.50%) | (11.20%) |
Change of tax rates | (2.40%) | (5.50%) | (2.90%) |
Change in valuation allowance | 45.20% | (41.80%) | (5.20%) |
Actual income tax expense | 19.60% | (31.50%) | 4.30% |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Income Tax Assets And Liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred income tax assets: | ||||
Impairment of long-term investments | ¥ 11,750 | ¥ 11,750 | ||
Tax loss carry forwards | 354,806 | 281,813 | ||
Advertising expense | 35,210 | 30,955 | ||
Others | 6,069 | 5,326 | ||
Total deferred income tax assets | 407,835 | 329,844 | ||
Valuation allowance | (367,708) | (288,844) | ¥ (146,371) | ¥ (139,177) |
Deferred income tax assets, net | 40,127 | 41,000 | ||
Deferred income tax liabilities: | ||||
Valuation appreciation of intangible assets | 750 | 1,067 | ||
Deferred income tax liabilities | ¥ 750 | ¥ 1,067 |
INCOME TAXES - Summary of Valua
INCOME TAXES - Summary of Valuation Allowance (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Balance at the beginning of the year | ¥ 288,844 | ¥ 146,371 | ¥ 139,177 |
Additions of valuation allowance | 79,445 | 168,163 | 46,755 |
Reduction of valuation allowance | (20,162) | (16,752) | (4,643) |
Reversal of valuation allowance | (11,297) | (188) | |
Change of tax rates | 31,171 | (8,038) | (30,671) |
Change of decrease related to subsidiary disposals and expiration | (293) | (712) | (4,247) |
Balance at the end of the year | ¥ 367,708 | ¥ 288,844 | ¥ 146,371 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) ¥ in Thousands | 12 Months Ended | 24 Months Ended | 36 Months Ended | 60 Months Ended | 72 Months Ended | ||||||||||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2024 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2018 | Dec. 31, 2023 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2022 CNY (¥) | |
PRC statutory income tax rate | 25% | 25% | 25% | ||||||||||||
Preferential income tax rate | 15% | 15% | 15% | 15% | |||||||||||
Entitled to a tax exemption | 0% | 0% | 0% | ||||||||||||
Preferential income tax rate small profit enterprises, percent | 20% | ||||||||||||||
Assessable tax, percent | 12.5 | 12.5 | 25 | 25 | |||||||||||
Assessable profit before tax | ¥ 1,000 | ¥ 1,000 | ¥ 1,000 | ¥ 1,000 | |||||||||||
Deferred tax assets along with valuation allowance | 293 | ¥ 293 | |||||||||||||
Tax losses carry forwards | ¥ 2,830,342 | ¥ 2,830,342 | |||||||||||||
State Administration of Taxation, China | |||||||||||||||
Withholding income tax percentage | 10% | ||||||||||||||
Maximum [Member] | |||||||||||||||
Preferential income tax rate small profit enterprises, percent | 25% | 50% | 50% | 20% | 20% | 20% | 20% | ||||||||
Following preferential income tax rate small profit enterprises, percent | 50% | ||||||||||||||
Assessable profit before tax | ¥ 3,000 | ¥ 3,000 | ¥ 3,000 | ||||||||||||
Minimum [Member] | |||||||||||||||
Preferential income tax rate small profit enterprises, percent | 20% | 20% | 20% | ||||||||||||
Assessable profit before tax | ¥ 1,000 | ¥ 1,000 | ¥ 1,000 | ||||||||||||
HK | |||||||||||||||
Tax losses carry forwards | ¥ 6,300 | ¥ 6,300 | |||||||||||||
Tarena Hangzhou | |||||||||||||||
PRC statutory income tax rate | 15% | 15% | 15% | ||||||||||||
Hanru Hangzhou | |||||||||||||||
PRC statutory income tax rate | 15% | 12.50% | 12.50% | 12.50% | 0% | ||||||||||
Entitled to a tax exemption | 50% | ||||||||||||||
2023 | |||||||||||||||
Tax losses carry forwards | ¥ 238,014 | 238,014 | |||||||||||||
2024 | |||||||||||||||
Tax losses carry forwards | 752,012 | 752,012 | |||||||||||||
2025 | |||||||||||||||
Tax losses carry forwards | 751,920 | 751,920 | |||||||||||||
2026 | |||||||||||||||
Tax losses carry forwards | 661,690 | 661,690 | |||||||||||||
2027 | |||||||||||||||
Tax losses carry forwards | ¥ 420,406 | ¥ 420,406 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party balances (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Related party balances | ||
Amounts due from related parties | ¥ 698 | ¥ 839 |
Ningxia Company | ||
Related party balances | ||
Amounts due from related parties | 251 | 202 |
Others | ||
Related party balances | ||
Amounts due from related parties | ¥ 447 | ¥ 637 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - Related Parties Transactions (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash collection on behalf of An Yue | Anyue School (Beijing) Education Technology Co., Ltd | |||
Related Party Transaction | |||
Expenses from transactions with related party | ¥ 1,225 | ||
Chuanbang | Cash collection service expense to Chuanbang | |||
Related Party Transaction | |||
Expenses from transactions with related party | ¥ 39 | ¥ 79 | |
Bolton School | Franchise income from Bolton School | |||
Related Party Transaction | |||
Revenue from related party | 453 | 462 | 518 |
Bolton School | Training service expense to Bolton School | |||
Related Party Transaction | |||
Expenses from transactions with related party | ¥ 429 | ¥ 811 | 305 |
Ningxia Company | Franchise, training and consulting service income from Ningxia Company | |||
Related Party Transaction | |||
Revenue from related party | (11) | ||
Beijing Huimoer Technology Co., Ltd | Technical consulting service expenses and labor expenses to Beijing Huimoer | |||
Related Party Transaction | |||
Expenses from transactions with related party | 148 | ||
Ms. Han Lijuan | |||
Related Party Transaction | |||
Interest income derived from the loan to related party | ¥ 81 |
RELATED PARTY TRANSACTIONS - Si
RELATED PARTY TRANSACTIONS - Significant Related Party Transactions (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Jul. 31, 2022 | Jan. 31, 2018 | |
Beijing Huimoer Technology Co., Ltd | |||
Related Party Transaction | |||
Equity investment percentage | 20% | ||
Anyue School (Beijing) Education Technology Co., Ltd | |||
Related Party Transaction | |||
Equity investment percentage | 19% | ||
Chuanbang | Service fee payable | Minimum | |||
Related Party Transaction | |||
Cash collection service fees percentage | 2% | ||
Chuanbang | Service fee payable | Maximum | |||
Related Party Transaction | |||
Cash collection service fees percentage | 20% |
ORDINARY SHARES AND STATUTORY_2
ORDINARY SHARES AND STATUTORY RESERVE (Treasury Shares) (Details) ¥ in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2021 shares | Dec. 31, 2020 CNY (¥) shares | Dec. 31, 2018 CNY (¥) shares | Jun. 30, 2018 USD ($) | |
ORDINARY SHARES AND STATUTORY RESERVE | |||||
Total consideration of Shares repurchased | ¥ | ¥ 17,103 | ¥ 2,646 | |||
Treasury Shares | |||||
ORDINARY SHARES AND STATUTORY RESERVE | |||||
Shares repurchased | shares | 3,409,080 | 0 | 100,729 | 3,768,495 | |
Total consideration of Shares repurchased | ¥ | ¥ 17,103 | ¥ 2,646 | ¥ 202,066 | ||
Treasury Shares | Minimum | |||||
ORDINARY SHARES AND STATUTORY RESERVE | |||||
Share repurchase plan, authorized amount | $ | $ 30 | ||||
Treasury Shares | Maximum | |||||
ORDINARY SHARES AND STATUTORY RESERVE | |||||
Share repurchase plan, authorized amount | $ | $ 70 |
ORDINARY SHARES AND STATUTORY_3
ORDINARY SHARES AND STATUTORY RESERVE (Statutory reserves and restricted net assets and Dividend) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ORDINARY SHARES AND STATUTORY RESERVE | |||
Statutory reserve | ¥ 194,601 | ¥ 175,564 | |
Statutory Reserves, Percentage of Appropriation From Net Profit | 10% | ||
Statutory Reserves, Balance As Percentage to Capital | 50% | ||
Statutory Reserves for Private Schools Requiring Reasonable Returns, Percentage of Appropriation From Net Profit | 25% | ||
Statutory Reserves for Private Schools Not Requiring Reasonable Returns, Percentage of Expected Annual Increase in Net Assets | 25% | ||
Appropriations | ¥ 19,037 | 16,736 | ¥ 5,307 |
Restricted net assets | 1,558,879 | 1,523,198 | |
Dividends, Common Stock, Cash | ¥ 0 | ¥ 0 | ¥ 0 |
SHARE BASED COMPENSATION - Summ
SHARE BASED COMPENSATION - Summary of share options activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Share Options | |||
Outstanding, beginning balance | 2,740,020 | ||
Granted | 1,166,980 | 879,000 | 1,236,146 |
Exercised | (398,000) | ||
Forfeited | (152,365) | ||
Outstanding, ending balance | 3,356,635 | 2,740,020 | |
Vested and expected to vest | 4,821,350 | ||
Exercisable | 2,408,105 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning balance | $ 1.67 | ||
Granted | 0.01 | ||
Exercised | 0.01 | ||
Forfeited | 2.44 | ||
Outstanding, ending balance | 0.10 | $ 1.67 | |
Vested and expected to vest | 0.29 | ||
Exercisable | $ 0.65 | ||
Weighted Average Remaining Contractual Years | |||
Outstanding | 6 years 10 months 20 days | 6 years 10 months 24 days | |
Vested and expected to vest | 5 years 8 months 12 days | ||
Exercisable | 5 years 11 months 15 days | ||
Outstanding, Aggregate Intrinsic Value | $ 2,994 | $ 1,976 | |
Vested and expected to vest, Aggregate Intrinsic Value | 4,378 | ||
Exercisable, Aggregate Intrinsic Value | $ 2,118 |
SHARE BASED COMPENSATION - Su_2
SHARE BASED COMPENSATION - Summary of fair value assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SHARE BASED COMPENSATION | |||
Expected dividends yield | 0% | 0% | 0% |
Minimum [Member] | |||
SHARE BASED COMPENSATION | |||
Expected volatility | 75.77% | 73.76% | 72.22% |
Exercise multiple | 2.2 | 2.2 | 2.2 |
Risk-free interest rate per annum | 1.66% | 1.09% | 0.79% |
The fair value of underlying ordinary shares (per share) | $ 0.36 | $ 0.20 | $ 1.71 |
Maximum [Member] | |||
SHARE BASED COMPENSATION | |||
Expected volatility | 77.77% | 75.78% | 78.51% |
Exercise multiple | 2.8 | 2.8 | 2.8 |
Risk-free interest rate per annum | 4.10% | 1.66% | 2.08% |
The fair value of underlying ordinary shares (per share) | $ 1.13 | $ 2.92 | $ 4.65 |
SHARE BASED COMPENSATION - Sche
SHARE BASED COMPENSATION - Schedule fair values of the options granted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SHARE BASED COMPENSATION | |||
Weighted average grant date fair value of option per share | $ 0.92 | $ 0.82 | $ 2.52 |
Aggregate grant date fair value of options | $ 1,079 | $ 720 | $ 3,115 |
SHARE BASED COMPENSATION - Su_3
SHARE BASED COMPENSATION - Summary of the non-vested shares activity (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Non-vested Shares | |
Outstanding, beginning balance | shares | 159,385 |
Granted | shares | 387,170 |
Vested | shares | (185,685) |
Forfeited | shares | (215,950) |
Outstanding, ending balance | shares | 144,920 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance | $ / shares | $ 7.11 |
Granted | $ / shares | 0.47 |
Vested | $ / shares | 2.62 |
Forfeited | $ / shares | 0.89 |
Outstanding, ending balance | $ / shares | $ 4.38 |
SHARE BASED COMPENSATION (Narra
SHARE BASED COMPENSATION (Narrative) (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||||||||||
Apr. 09, 2022 shares | Mar. 01, 2022 shares | Apr. 09, 2021 shares | Mar. 01, 2021 shares | Apr. 09, 2020 shares | Mar. 01, 2020 shares | Jan. 01, 2020 | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2020 CNY (¥) shares | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 $ / shares | Dec. 31, 2020 $ / shares | Dec. 31, 2014 shares | |
SHARE BASED COMPENSATION | |||||||||||||||
Options granted | 1,166,980 | 1,166,980 | 879,000 | 1,236,146 | |||||||||||
Total intrinsic value of options exercised | ¥ | ¥ 2,543 | ¥ 6,261 | ¥ 26,301 | ||||||||||||
Income tax benefit from share-based compensation | $ | $ 0 | ||||||||||||||
Non-vested shares granted | 387,170 | 387,170 | |||||||||||||
Non-vested shares vested | 185,685 | 185,685 | |||||||||||||
Unrecognized stock option compensation expense | ¥ | ¥ 6,721 | ||||||||||||||
Unrecognized stock option compensation expense, period for recognition | 4 years 4 months 17 days | 4 years 4 months 17 days | |||||||||||||
Unrecognized non-vested shares compensation expense | ¥ | ¥ 4,382 | ||||||||||||||
Unrecognized non-vested shares compensation expense, period for recognition | 8 months 15 days | 8 months 15 days | |||||||||||||
Fair value of vested restricted shares | ¥ | ¥ 3,358 | ¥ 5,930 | ¥ 9,013 | ||||||||||||
Minimum [Member] | |||||||||||||||
SHARE BASED COMPENSATION | |||||||||||||||
Exercise prices | $ / shares | $ 0.01 | $ 0 | $ 1 | ||||||||||||
Vesting period | 0 years | 0 years | 1 year | 3 months | |||||||||||
Share price | $ / shares | $ 0.36 | 0.20 | 1.71 | ||||||||||||
Maximum [Member] | |||||||||||||||
SHARE BASED COMPENSATION | |||||||||||||||
Exercise prices | $ / shares | 0.37 | 2.51 | |||||||||||||
Vesting period | 10 years | 10 years | 2 years | 5 years | |||||||||||
Share price | $ / shares | $ 1.13 | $ 2.92 | $ 4.65 | ||||||||||||
Independent Directors [Member] | |||||||||||||||
SHARE BASED COMPENSATION | |||||||||||||||
Vesting period | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | |||||||||
Non-vested shares granted | 337,170 | 50,000 | 48,690 | 69,355 | 143,628 | 74,000 | |||||||||
January 1 [Member] | |||||||||||||||
SHARE BASED COMPENSATION | |||||||||||||||
Expiration period | 10 years | 10 years | 10 years | ||||||||||||
January 1 [Member] | Maximum [Member] | |||||||||||||||
SHARE BASED COMPENSATION | |||||||||||||||
Expiration period | 10 years | ||||||||||||||
January 1 [Member] | Independent Directors [Member] | |||||||||||||||
SHARE BASED COMPENSATION | |||||||||||||||
Vesting period | 1 year | ||||||||||||||
Non-vested shares granted | 35,912 | ||||||||||||||
2014 Plan [Member] | |||||||||||||||
SHARE BASED COMPENSATION | |||||||||||||||
Authorized | 1,833,696 |
(LOSS) EARNINGS PER SHARE (Deta
(LOSS) EARNINGS PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | Dec. 31, 2020 CNY (¥) ¥ / shares shares | |
Numerator: | ||||
Net (loss) income attributable to Class A and Class B ordinary shareholders for basic and diluted earnings per share | ¥ 83,520 | $ 12,109 | ¥ (474,547) | ¥ (766,643) |
Denominator: | ||||
Weighted average number of Class A and Class B ordinary shares outstanding | 54,657,222 | 54,657,222 | 56,260,925 | 54,341,213 |
Dilutive effect of outstanding share options | 3,073,450 | 3,073,450 | ||
Denominator for diluted (loss) earnings per share | 57,730,672 | 57,730,672 | 56,260,925 | 54,341,213 |
Basic (loss) earnings per ADS | (per share) | ¥ 7.64 | $ 1.11 | ¥ (42.17) | ¥ (70.54) |
Diluted (loss) earnings per ADS | (per share) | ¥ 7.23 | $ 1.05 | ¥ (42.17) | ¥ (70.54) |
LEASES - Components of rental e
LEASES - Components of rental expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Short-term rental expense | ¥ 20,379 | ¥ 35,707 | ¥ 114,723 |
Operating lease expense excluding short-term rental expense | ¥ 194,742 | ¥ 250,043 | ¥ 170,022 |
LEASES - Other information rela
LEASES - Other information related to operating leases (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
LEASES | ||||
Cash paid for amounts included in the measurement of lease liabilities | ¥ 173,352 | ¥ 228,857 | ¥ 244,491 | |
Right-of-use assets obtained inexchange for newlease liabilities | ¥ 112,966 | $ 16,379 | ¥ 185,875 | ¥ 484,202 |
Weighted average remaining lease term | 2 years 5 months 15 days | 2 years 5 months 15 days | 2 years 9 months 3 days | |
Weighted average discount rate | 5.61% | 5.61% | 5.60% |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2022 USD ($) | |
LEASES | ||||
2023 | ¥ 211,376 | |||
2024 | 104,068 | |||
2025 | 50,572 | |||
2026 | 18,296 | |||
2027 | 4,499 | |||
2028 and thereafter | 1,021 | |||
Total lease payments | 389,832 | |||
Less: imputed interest | 23,127 | |||
Total | 366,705 | |||
Less: current portion | 197,969 | ¥ 239,937 | $ 28,703 | |
Non-current portion | 168,736 | 272,575 | $ 24,464 | |
Gross rental expenses incurred under operating leases | 215,121 | 285,750 | ¥ 284,745 | |
Sublease rental income | ¥ 330 | ¥ 583 | ¥ 971 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Amount paid | $ 3 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) segment | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
SEGMENT INFORMATION [Line Items] | ||||
Number of operating segments | segment | 2 | 2 | ||
Revenues, cost of revenues, and gross profit by segment | ||||
Net revenues | ¥ 2,468,074 | $ 357,837 | ¥ 2,386,520 | ¥ 1,897,883 |
Cost of revenues | (1,056,043) | (153,112) | (1,201,419) | (1,066,842) |
Gross profit | 1,412,031 | $ 204,725 | 1,185,101 | 831,041 |
IT Professional Education | ||||
Revenues, cost of revenues, and gross profit by segment | ||||
Net revenues | 1,068,230 | 1,150,247 | 1,136,043 | |
Cost of revenues | (320,961) | (409,326) | (420,349) | |
Gross profit | 747,269 | 740,921 | 715,694 | |
IT-focused Supplementary STEAM Education | ||||
Revenues, cost of revenues, and gross profit by segment | ||||
Net revenues | 1,399,844 | 1,236,273 | 761,840 | |
Cost of revenues | (735,082) | (792,093) | (646,493) | |
Gross profit | ¥ 664,762 | ¥ 444,180 | ¥ 115,347 |
PARENT ONLY FINANCIAL INFORMA_3
PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 CNY (¥) | Dec. 31, 2019 CNY (¥) |
Current assets: | ||||||
Cash and cash equivalents | ¥ 356,237 | $ 51,650 | ¥ 423,766 | ¥ 320,179 | ||
Prepaid expenses and other current assets | 111,339 | 16,142 | 139,757 | |||
Amounts due from related parties | 698 | 101 | 839 | |||
Total current assets | 667,553 | 96,786 | 619,332 | |||
Total assets | 1,337,500 | 193,919 | 1,641,782 | |||
Current liabilities: | ||||||
Accrued expenses and other current liabilities | 603,516 | 87,502 | 563,603 | |||
Total current liabilities | 2,656,946 | 385,221 | 2,940,086 | |||
Total liabilities | 2,844,181 | 412,367 | 3,234,202 | |||
Commitments and contingencies | ||||||
Shareholders' equity: | ||||||
Additional paid-in capital | 1,363,845 | 197,739 | 1,347,205 | |||
Accumulated other comprehensive income | 49,664 | 7,201 | 48,699 | |||
Accumulated deficit | (2,436,918) | (353,320) | (2,520,438) | |||
Total equity deficit to the shareholders of Tarena International, Inc. | ¥ | (1,506,681) | (1,592,420) | (1,139,269) | ¥ (403,064) | ||
Total liabilities and shareholders' deficit | 1,337,500 | 193,919 | 1,641,782 | |||
Class A ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | 359 | 52 | 355 | |||
Treasury shares (7,199,870 and 10,608,950 Class A ordinary shares as of December 31, 2021 and 2022, at cost) | ¥ (476,918) | $ (69,147) | ¥ (459,815) | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 860,000,000 | 860,000,000 | 860,000,000 | 860,000,000 | ||
Ordinary shares issued | 57,176,842 | 57,176,842 | 56,593,157 | 56,593,157 | ||
Ordinary shares outstanding | 46,567,892 | 46,567,892 | 49,393,287 | 49,393,287 | ||
Treasury shares | 10,608,950 | 10,608,950 | 7,199,870 | 7,199,870 | ||
Class B ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | ¥ 74 | $ 11 | ¥ 74 | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 | ||
Ordinary shares issued | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 | ||
Ordinary shares outstanding | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 | ||
Parent Company | ||||||
Current assets: | ||||||
Cash and cash equivalents | ¥ 1,844 | $ 267 | ¥ 23,506 | $ 3,407 | 3,793 | ¥ 7,599 |
Prepaid expenses and other current assets | 550 | 80 | 24 | |||
Amounts due from related parties | 437,987 | 63,502 | 407,795 | ¥ 32,869 | ||
Total current assets | 440,381 | 63,849 | 431,325 | |||
Investment in subsidiaries | (1,574,974) | (228,350) | (1,700,223) | |||
Total assets | (1,134,593) | (164,501) | (1,268,898) | |||
Current liabilities: | ||||||
Accrued expenses and other current liabilities | 30,392 | 4,406 | 5,781 | |||
Due to intercompany | 334,909 | 48,557 | 309,241 | |||
Total current liabilities | 365,301 | 52,963 | 315,022 | |||
Total liabilities | 365,301 | 52,963 | 315,022 | |||
Commitments and contingencies | ||||||
Shareholders' equity: | ||||||
Treasury shares (7,199,870 and 10,608,950 Class A ordinary shares as of December 31, 2021 and 2022, at cost) | (476,918) | (69,147) | (459,815) | |||
Additional paid-in capital | 1,363,845 | 197,739 | 1,347,205 | |||
Accumulated other comprehensive income | 49,664 | 7,201 | 48,699 | |||
Accumulated deficit | (2,436,918) | (353,320) | (2,520,438) | |||
Total equity deficit to the shareholders of Tarena International, Inc. | (1,499,894) | (217,464) | (1,583,920) | |||
Total liabilities and shareholders' deficit | (1,134,593) | (164,501) | (1,268,898) | |||
Parent Company | Class A ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | ¥ 359 | $ 52 | ¥ 355 | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 860,000,000 | 860,000,000 | 860,000,000 | 860,000,000 | ||
Ordinary shares issued | 57,176,842 | 57,176,842 | 56,593,157 | 56,593,157 | ||
Ordinary shares outstanding | 46,567,892 | 46,567,892 | 49,393,287 | 49,393,287 | ||
Treasury shares | 10,608,950 | 10,608,950 | 7,199,870 | 7,199,870 | ||
Parent Company | Class B ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | ¥ 74 | $ 11 | ¥ 74 | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 | ||
Ordinary shares issued | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 | ||
Ordinary shares outstanding | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 |
PARENT ONLY FINANCIAL INFORMA_4
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive (Loss) Income (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
Condensed Statements of Comprehensive Profit/(Loss) | ||||
Selling and marketing expenses | ¥ 642,937 | $ 93,217 | ¥ 878,130 | ¥ 906,337 |
General and administrative expenses | (604,028) | (87,576) | (569,985) | (630,618) |
Operating (loss) income | 93,038 | 13,489 | (369,112) | (806,380) |
Foreign currency exchange (loss) gains | (954) | (138) | (518) | (4,849) |
Interest income (expense) | 2,700 | 391 | 2,335 | (199) |
(Loss) income before income taxes | 106,067 | 15,378 | (361,723) | (806,227) |
Income tax expense | (20,834) | (3,021) | (114,057) | 35,034 |
Net (loss) income | 85,233 | 12,357 | (475,780) | (771,193) |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustment | 965 | 140 | (421) | (2,266) |
Comprehensive (loss) income | 86,198 | 12,497 | (476,201) | (773,459) |
Parent Company | ||||
Condensed Statements of Comprehensive Profit/(Loss) | ||||
Selling and marketing expenses | (8) | (1) | (323) | (693) |
General and administrative expenses | (34,558) | (5,010) | 5,955 | (16,890) |
Operating (loss) income | (34,566) | (5,011) | 5,632 | (17,583) |
Equity in (loss) income of subsidiaries | 117,266 | 17,001 | (480,114) | (748,006) |
Foreign currency exchange (loss) gains | 2,480 | 360 | (268) | (1,109) |
Interest income (expense) | (1,660) | (241) | 203 | 55 |
(Loss) income before income taxes | 83,520 | 12,109 | (474,547) | (766,643) |
Net (loss) income | 83,520 | 12,109 | (474,547) | (766,643) |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustment | 965 | 140 | (421) | (2,266) |
Comprehensive (loss) income | ¥ 84,485 | $ 12,249 | ¥ (474,968) | ¥ (768,909) |
PARENT ONLY FINANCIAL INFORMA_5
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | |
Financing activities: | ||||
Issuance of Class A ordinary shares in connection with exercise of share options | ¥ 107 | $ 16 | ¥ 3,947 | ¥ 3,354 |
Repurchase of treasury shares | (17,103) | (2,480) | ||
Changes in cash, cash equivalents and restricted cash | (52,342) | (7,590) | 65,540 | (177,777) |
Effect of foreign currency exchange rate changes on cash and cash equivalents | 2,288 | 332 | (67) | (1,376) |
Net change in cash, cash equivalents and restricted cash | (50,054) | (7,258) | 65,473 | (179,153) |
Cash and cash equivalents at beginning of year | 423,766 | 320,179 | ||
Cash and cash equivalents at end of year | 356,237 | 51,650 | 423,766 | 320,179 |
Parent Company | ||||
Operating activities: | ||||
Net cash (used in) provided by operating activities | (5,699) | (826) | 14,458 | (8,010) |
Financing activities: | ||||
Issuance of Class A ordinary shares in connection with exercise of share options | 107 | 16 | 3,947 | 3,354 |
Repurchase of treasury shares | (17,103) | (2,480) | ||
Net cash provided by (used in) financing activities | (16,996) | (2,464) | 3,947 | 3,354 |
Changes in cash, cash equivalents and restricted cash | (22,695) | (3,290) | 18,405 | (4,656) |
Effect of foreign currency exchange rate changes on cash and cash equivalents | 1,033 | 150 | 1,308 | 850 |
Net change in cash, cash equivalents and restricted cash | (21,662) | (3,140) | 19,713 | (3,806) |
Cash and cash equivalents at beginning of year | 23,506 | 3,407 | 3,793 | 7,599 |
Cash and cash equivalents at end of year | ¥ 1,844 | $ 267 | ¥ 23,506 | ¥ 3,793 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) ¥ in Thousands, $ in Thousands | Apr. 26, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Cash | ¥ 356,237 | $ 51,650 | ¥ 423,766 | |
Subsequent event | ||||
Cash | ¥ 50,000 | |||
Subsequent event | Beijing Weilke | ||||
Equity investment percentage | 70% | |||
Subsequent event | Shaoyun Han | ||||
Equity investment percentage | 10% | |||
Maximum | Subsequent event | Target Business | ||||
Equity investment percentage | 100% | |||
Minimum | Subsequent event | Target Business | ||||
Equity investment percentage | 20% |