AACG - Earnings call transcript Q1 2022

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Operator

Greetings, and welcome to the ATA Creativity Global First Quarter 2022 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Alice Zhang of the Equity Group. Please go ahead.

Alice Zhang

Thank you, Hector, and hello, everyone. us. joining for you Thank at The press for is or results company's Creativity at announcing first quarter ATA website the the of XXXX, IR Global's, ended the ACG's, section release www.atai.net.cn. March available XX,

As this accompanying its presentation an company XX slide for also will this be part replay at available days. of the ACG's conference website of A the has call, website. broadcast on made available next

mainly growth for growth generally; of regarding Portfolio other outlook, and any we results meaning operations; started, and call Training statements subsequent that measures Programs would and this certain to prospects Litigation services, contains Reform like similar to services. ACG's on and terms overseas of operations, study of and should, include, education growth impact plans by ACG's harbor response demand of ACG's could, identified anticipate, will provision activities, the everyone among Act and other be information and get of Securities believe, research-based remind accompanying business COVID-XX forward-looking ACG's the learning The for ACG of to benefits XXXX. things, market anticipated ACG's acquisitions and Before plan I estimate, implemented safe expect, its statements within intend, including plan, herein can in discussed such future, Private conference statements as the the forward-looking and terms and forecast, strategy, future These counselling forward COVID-XX. mergers anticipated look

could of can company the those we before Information no does today, expectations about projected. encourage correct. conditions risks an investment associated subject filings those dramatically Exchange results you are included The company ACG forward-looking changes Securities its forward-looking as decision. prove be making as that events, and obligation in update statements cause of information, expectations be any except statements There with in to by to investing actual review to the to a future those to is the market differ required its are risks that in any and law. the the from new believes result not with assurance otherwise, would in assume Although uncertainties that reflected statements Commission, which or as reasonable

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Mr. Mr. questions. questions investor during floor will a Q&A ahead, Kevin go that, for Sima, an brief provide its before opening some today's the to highlights for floor long-term Please e-mail with will and Company's and Kevin President, give Zhang, turn the ACG's the update On quarter Ma. brief turning outlook CEO, financial the the we Jun operating Ruobai of opening addition, growth call to Mr. With today's over on and and Kevin. company's the follow and Chairman I'll strategy over company. than will Ma overview XXXX. take the who remarks Kevin first or to CEO, are to Chairman more Mr. session In before happy via CFO, call, of

Kevin Ma

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Ruobai Sima

like time to you, for and thank [indiscernible] And instruction. the history. ACG by joining its introduction in I'd be begin sharing at and Kevin, to Okay. kind And the

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shifts revenues fourth a the stable as gross as study This profit increased and continued contribution well as and we as in quarter, portfolio revenue and time-based margin. well programs. services achieve improvement driven to notable was able primarily year-over-year net delivered and from during increase by and project-based product hours programs our and Although in from were towards counseling remaining training overseas credit XX.X%

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despite As greater a to deliver and lockdown of where are being continue to take and appropriate, shifted and to are offering in-person ongoing few restrictions, our classes. our core online able face cities we students pandemic-related support not flexibility method

an and future and credit parallel cities. enrolled Our the stable XXX in placed year-over-year we year to that and hours students core program to enrollments prior certain in Enrollment tend indicator XXX were the students resurgence delivered, of portfolio COVID-XX the training XXXX of be fourth compared quarter with during remaining period.

fourth in increased programs. see have of and decreased training delivered making And an quarter During training shift continued XX,XXX and programs XXXX, realtime-based and hours credit our credit ongoing project-based of portfolio we for programs. Lower XX% versus to the our we remaining flat programs hours or favor total by portfolio realtime-based programs project-based XX%.

to share to the Our to opportunity continued us margin. while contributed effort gross revenue program giving operational efficiencies and grow improve improving the is

population in We a can it of which serve ACG backgrounds. have explore continued also students great ways from diverse to better

USD and compared cash working in from first represented in which and and Arts programs or I'd million are equity increased was prior of X.X improvement million diverse was total from efficiencies creative students fourth the attributable period. and improved their during various our And efforts. Center, USD center by from the for deficit September proportion USD and the received RMB quarter by depend centered portfolio We will XX.X USD raised XX, counselling. increase move training needs with of training and to equivalents. were position and both feedback and the net help further XX.X and to XXXX. optimization ACG's our for equity This And of to Total Net Portfolio training towards XXXX financial the it of ongoing service And operating to and with the services and paths to million], arts. attending who were ACG's delivered million to that, to million, increased financials and XX.X% RMB Arts compared deficit solid we nation-wide shareholders' revenues the margin with year up a XX.X capital order [USD a either period. million overseas project-based of in study quarter program growth of portfolio of shape quarter, million traffic. opened quarter from total respectively, that, revenue and International at portfolio for their fourth students cost of March training period. important continue like quarter the from Gross and in he mix in positive XXXX. to X during XX.X overseas and doors study driven which And XX and at of RMB be Working pursue and our the to Program to network XXXX. primarily XX.X% XX, XXXX, the Kevin? in of of counselling shareholders' improve and cash primarily upon during over training and December in XXXX year around Kevin, Foundation services. XX.X% have The was goals driven through XXXX. in million sheet, delivered balance moving In and to XXXX related turn XX.X Shuren-ACG online loss XX.X% and RMB XX.X capital to improved first prior an let's the study Beijing platform, revenue outlook fourth million to was ACG net

Kevin Ma

quarter Thank pleased delivered the XXXX. the you, in first stable performance We with Sima. were of

China has taking During led our the also transmission cities certain which a COVID-XX the lockdown, The of key travel Shanghai, loan Shenzhen related the country. and since place to with period, local in worsened few restrictions experienced cities. to across mandatory situation Suzhou, in major like post

person's cities still we open. reinforcing and our our of remained learning instruction, centers are where campus our the in students service to to Some has had while close have cease in

students providing for have are by online delivery certain this always instruction. may impacted in-person an be We cities. on students lockdowns short prefer who option the term, in there business, In will impact class

to continue will we [indiscernible] are majority business. support challenges overcome students believe presented to our pursuing in their divested], by are the best our the determined we However, we pandemic. and the the The studies them to of [peso of ongoing acted

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are and growth XXXX a We are see online post the era. research-based growing beyond learning in about pandemic to it of excited through pleased sentiment programs potential

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-- are on we there's -- the achieving needs. of serving their computation and our evolving remains While students our the within focus mindful

drive ahead. ahead of to about positive an current in Mandarin translation. 'XX the students. followed to we will on growth by Zhang, make I'd leading look for English Jun Jun, optimistic initiatives. like his arts and hand over our provide as will President update education in ACG's in Jun to opportunities to which go position forward the outcomes be are creative our floor continue maintaining mark please to We now us our

Jun Zhang

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to Since Kevin. platform. people early to we affected over over Delivery to for online COVID-XX have the the a years nimble when of continue work the the need world our unprecedented you, X pandemic need and developing of circumstances flexible, methods clear [indiscernible] be XXXX, Thank courses have the became technologically our all ago. in beginning We absolutely

develop to and domestic camps, reacting to team person are both quality education best temporarily operations. quickly campuses has of and online remained online travel into programs. providing feasible, short-term [influxes] the including And resources in even students, closed on due to our develop some book for programs, continued local on focused our our to resurgence. when research-based COVID-related continued certain internships, ACG learning where additional have services We have

selected group able and design XX the Hainan and have during are protection an example, environmental at creative For of believe program an first level some and organized situations and was cities over health the individual for some at over The into in island their remainder several by participating who This products improve camp and -- we of Xidao more the work center. on resume normalcy. students. We learn may opportunity was artist. the about well work marine the [indiscernible] exhibitions optimistic province, recycling the and a quarter, protection China unique can weeks the and in students public next cities pain to create Sanya, received situation to from the RPs students projects, major XXXX offering as experience the in remain culture of local

quality like And we summer camps the and the developing with team them coming that cater determined support and education We way student programs do, of in continue best to to to to summer. for continue experiences. every the travels plan always short-term in different can, needs populations. teaching We're we to

growth China. in investing maintain as our the diversified financially and colleges, and arts M&A in that provide long-term with more. establish we sales efforts and Kevin. appropriate, to our ACG's better and education as we continuously and that, based exploring positioned education operating term, to strategies cultivate quality arts are advantages learning In creative I'll creative it near market leading We population back operational education. of where in in serving have well the improve ability growing pursuing look experience ongoing of features to with needs institutions student international population, our creativity. financing, in China upon partners, and a university evolving and students' to XXXX, students to high confident resonate position with Our in strength the enable but the efficiencies competitive mission believe enhance domestic over are growth. turn forward to international schools and marketing to prospects to our been We're including our relationships are and is the With opportunities veteran experiences appropriate well

Kevin Ma

our Thanks, are and Jun closing, we is continue optimistic XXXX regardless what look about of stance Alice. prospects and In in to situation ACG the locally. forward

we arts committed help for are please students question. empowering in of to in education. to to the pursuit We our their our which can exploring students we'll ways of more success and continue achieve open mission With expand creative creative arts in operator, offering that

Kevin Ma

reach for you feel Relations please again questions Investor If us the to Group. Thanks out or us. us, to direct anyone of Equity from our has all joining for free to

you. investors We available our or call. are always during look to speak you Thank to and forward to speaking quarterly with next

Operator

This concludes today's conference.

may your at time. you You participation. Thank this for all your disconnect lines

ATA Creativity Global (AACG) 14 May 222022 Q1 Earnings call transcript