AACG - Earnings call transcript Q2 2022

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Operator

Greetings, and welcome to the ATA Creativity Global's Second 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 proceed.

Alice Zhang

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

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

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

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

I are of call Regarding the presentation conference the X like for exchange historical buying disclaimer second converted of X.XXXX on dollar the information. otherwise noted. U.S. June June you otherwise X Slide USD language, ended and results financial the RMB the All all would GAAP are RMB the to in to conference from XX, of noted. using for The of XXXX, months refer presentation its call quarter as noon XX, XXXX. also in financial on to RMB X, further an amounts time unless to this relating and reported, All conversions and U.S. are percentages as reports R&D the calculated results unless rate company accurate based rate

company the you of presentation, is Slide with on of PowerPoint those accompanying an along following the there For X. overview

investor today's we addition, via during to to Q&A In e-mail than or company. are take a more the happy questions session

go With floor ahead, Zhang, for update before follow questions. opening company's and Sima. with that, growth the of Sima President, highlights for e-mailing the Alice CEO, Kevin Sima. e-mails financial on call, Mr. and will Mr. Jun call second and over the XXXX; Ruobai a Ma; On company's by turn ACG's me, I'll long-term its to and operating You will of avhang@equityny.com. Mr. CFO, Mr. outlook made Chairman CFO, interview to some strategy the an today's brief Ruobai the Zhang quarter provide Please

Ruobai Sima

to the continue of students during online and to America, who art and fulfilling Alice, our pleased Thank education due time. welcome, and deliveries XXXX, our while and continue including second chose COVID-XX we quarter creative resurgence and core in good Beijing. we of evening to critics, local their in Shanghai supporting some and of those appreciate everyone, that And you, were everyone's we

late March closed lockdown to early our For temporarily local to some June, procedures. of with comply we centers training

have XXXX. Total are to at lifted, that since like our period able compared during quarter remained We person pleased these and stable X,XXX are the in restrictions second we X,XXX been enrollment serve the students of again. to in studio

portfolio financials center for our As training total closures training revenue lockdowns, period, in increased hours the situation credit the which China were period. again. prior learning a program training on The year once research-based portfolio revenues and future contributions by study compared from counselling overseas public to health improving result of by and delivered impact during decreased with partially offset impacted temporary XX.X% services

We expect demand training research-based programs and for our learning rebound. to portfolio

share demand oversea study confident increase see education industry. Creative market we to for significant in in continue international the to We its program, ACG's ability Arts and are

second the our a programs. XXXX, quarter of hours for of delivered XX,XXX training During total credit portfolio we

XXXX in to evident half second revenue million to We training were first that, we program the have for of the let's our With XXXX. favor in in XX highlights the quarter the the move mix the RMB second shift continued versus second breakdown, hours quarter delivered quarter during time-based year. million project-based financial of over compared RMB programs, of are net project-based credit for and period. XX.X to hours Total for of in programs. ongoing account total credit portfolio encourage XX.X% This is

a services and As XX.X% decrease lockdowns will Beijing. primarily and prior contribution was was that during attributable period. difference net in of research-based XX.X stable to in of the quarter as primarily year the a was portfolio gain in revenues The XX.X the ACG Gross million, were some by the million XXXX. relatively period. investment Shanghai decreased the education decrease here including cities, impacted loss and of RMB the year mentioned RMB for XX.X%, compared earlier, to income to COVID-XX remained ACG Net result key second revenues was which onetime of due due million, cost compared the The margin the decreased subsequent of a was to assessment resurgence our in due disposal from of to XX.X to period, local year-over-year. attributable RMB company's learning prior K-XX primarily the training business

XX.X% XXXX. Gross Net Turning RMB XXXX. increased slightly the to half XX.X was to same remained compared the XX.X% compared million RMB first period stable to Net million RMB to to the year of in XX.X compared to loss in prior revenue RMB of attributable ACG million, million. period. margin at X.X XX.X

balance the to Moving sheet.

USD over at and deficit cash in like XX.X With be in solid USD adjusted it to million, cash XXXX. XX, Working capital Kevin? turn will compared XX, to our was that, shareholder were Kevin, capital working shareholder position strategy. XX.X with expand and X equity We million total million of of USD December growth financial our XXXX, million upon outlook June and to XX.X equity equivalents. continue I'd at who XX USD respectively to million, and USD

Kevin Ma

Thank Sima. you,

and Shanghai, [Indiscernible] formats. with were ongoing This study as cities with we the expected [Indiscernible] continue year, lockdown tier the of Beijing cities is to with during impacted adopts [Indiscernible] as using first as ability pleased such the online training top in where half [Indiscernible]. the of significance While some centers to where were lot the our and increases local second ACG prepay ACG's by the a such our well tier choose as students environment

Master this formats XXXX, the to began quarter in-person deliver We for when X early continued we vision or second was runs create our high-quality go seen as over students ongoing Oversees such past program our years is especially and of whether Our ACG met XXXX, had even in quicker remote. the introduced in learning we a public they In via it's the and Program. qualities interest have online to the support the students experience situation regardless when improving. first to

continues for creativity During believe [Indiscernible] [Indiscernible] coalition a with us into of to help internal the and in we've day-to-day efforts to and structure, to understand need. our deployed able bid, our be our full-time we roles current quarter, an our ACG potential opportunity offerings their responsibilities, We to believe their event our create introducing students our management incorporate they [Indiscernible] received communication to more society [Indiscernible] to by of prepared ACG's to development of this the portfolio organizational enhance education drive must product our related involving quickly [Indiscernible] direct improving our line the growth we and sense leaving to strategy from to presents to streamline staffing marketplace. are also sales teaching arts today's We to and reach operations. campaign to efforts teaching began be

Zhang, look hand and provide about ahead. to translation. initiatives. optimistic we students. comps Jun it half to ACG's the can for the to growth please which on coming outlook our forward season followed the positive in English Jun XXXX our where application have go make Jun, will Mandarin, now I'd remarks are his to over be in will current of like to an drive second President, our by update We

Jun Zhang

[Foreign Language]

Unidentified Company Representative

response seamless Thank technology, and centers. an the the you, COVID-XX we supporting early the one and learn Kevin. end techniques. us when process visited and we're given our ceramic invest learning The also in organization pleasant that has glass faced experience through the continue melting to our students. in remain words and continued master for own Since has foundation blue in ceramic pandemic renowned understand to have XXXX for provided The enabled at to any our we worsen in named to circumstances. have [Indiscernible] summer, into a ongoing that program. an centers environment cooperated and service their advancing delivery exhibit We studios program hot alert exclusive with at we Jingdezhen the flexible white have students porcelain word XXXX, pandemic work art the be famous which that students experience shaving, maintaining some opportunity training ensure operate our creation to of in the to we place strong could of moment, towards put and a and of procedures in enrolled painting to systems the of building, with and the about we launched situations monitoring and This unexpected

system business in and side, invest operations across new On to teaching our major the lines. continues developing upgrading programs ACG

will to customizing upgrading to and the acknowledge our as We in responsive committed our of products needs provide we being various educational remain and flexible population. continue online student adjusting, and offerings

we with their will our Creativity and remainder that ACG of more. to Arts the programs content reflect to cutting-edge supporting In continue addition, in created ever-evolving XXXX, students In related including industry, study. introduce focus the new will Metaverse, programs NFTs on

our their precisely for education to As students' Kevin business. allow audience We're mentioned, call teaching confident target this season student to institutional marketing busy we efforts and and strategies streamline our also learning staff, grow that expect new to for committed is overseas. mission with a to enhance relationships partners the to application quality first-class who and to that enter organization our structure to internal those our provide will floor solidifying remain potential that the enable us us experiences our ACG's curative. choose

and to I'll continue back will of to competitors. stuff We rate that, our positive turn to With outcomes achieve our us Kevin. offering helping differentiate students believe that from our it over mystery

Kevin Ma

it ACG contrary student conclusion, we have in are with pleased achieve improving serve that, to with been the long portfolio in to and committed financial a the term. questions. able our of device With population expect serving In operator, expanding for offerings and strengths we the to are continue over we despite to the up results XXXX. their base Jun. our to arts them bring assisting challenges the creative to let's be Thanks, pursuing growth is and proud

Kevin Ma

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

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

Operator

This today's conference. concludes

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

ATA Creativity Global (AACG) 13 Aug 222022 Q2 Earnings call transcript