China's ATA Creativity Global Q4 prelim revenue falls amid lower portfolio training demand

Overview

• China educational services provider's preliminary Q4 revenue fell about 12% yr/yr amid lower portfolio training demand

• Company posted Q4 net loss, compared to net income a year earlier

• Operating expenses rose sharply due to one-time goodwill impairment charge

Outlook

• ATA Creativity Global plans to build on operational efficiency and manage expenses to improve profitability

• Company to optimize services, improve classroom utilization and prioritize cost-effective student acquisition channels

Result Drivers

• PORTFOLIO TRAINING WEAKNESS - Lower revenue from portfolio training programs due to increased competition and adjustments to offerings and fee structure

• HIGHER OUTSOURCING AND TEACHER COSTS - Gross profit and margin declined mainly due to higher outsourcing costs for research-based learning services and increased part-time teacher costs

• GOODWILL IMPAIRMENT - Operating expenses rose sharply due to a one-time goodwill impairment charge

Company press release: ID:nACSfTQWBa

Key Details

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