Offcn Education Technology Co., Ltd.2019 Annual Report Summary
Stock Code：002607 Stock Abbr.：OFFCN EDU Announcement No.:2020-008
Offcn Education Technology Co., Ltd.
2019 Annual Report Summary
I. Important Notes
This summary is extracted from the full annual report. In order to fully understand the Company's operating results, financial status
and future development plan, investors should read the full annual report carefully disclosed on the media designated by the China
Securities Regulatory Commission (CSRC). The Company’s 2019 Annual Report is prepared and published in Chinese version, and
the English version is for reference only. Should there be any inconsistency between the Chinese version and English version, the
Chinese version shall prevail.
The board of directors, the supervisor committee, the directors, supervisors, and senior management of the company shall hereby
guarantee the authenticity, accuracy and completeness of the annual report also without misrepresentations, misleading statements, or
material omissions, and bear individual and joint legal liabilities.
All directors of the Company personally attended the board meeting to review this annual report.
Notes of non-standard audit opinion
□ Applicable √ N/A
The plan for the common stock profit distribution or the plan for converting reserved funds into share capital during the reporting
period was reviewed by the board meeting
√ Applicable □ N/A
Whether to convert reserved funds into share capital
□ Yes √ No
According to the profit distribution proposal reviewed and approved by the Company’s Board of Directors on March 9, 2020, based
on the total share capital of 6,167,399,389 shares as of December 31, 2019, a cash dividend of RMB 2.40 (including tax) will be
distributed for every 10 shares to all shareholders in a total of RMB 1,480,175,853.36. No equity dividends will be distributed and the
equity reserves will not be converted to share capital.
The plan for the distribution of preferred stock profits during the reporting period is adopted by the board of directors through resolution.
□ Applicable √ N/A
II. Basic Situation of the Company
1. Company Profile
OFFCN EDU (Yaxia Auto has
been renamed as
Stock Abbreviation Stock Code 002607
OFFCN EDU on
February 21, 2019)
Stock Exchange for Stock Listing Shenzhen Stock Exchange
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
Stock Abbreviation before
Yaxia Auto
change
Contact Person and Contact
Secretary of the Board Representative of Securities Affairs
Information
Name Gui Hongzhi Gu Pan
Block B, Hanhua Century Mansion, No.23 Block B, Hanhua Century Mansion, No.23
Address Xueqing Road, Haidian District, Beijing, Xueqing Road, Haidian District, Beijing,
China China
Tel 010-83433677 010-83433677
E-mail ir@offcn.com ir@offcn.com
2. Main Business or Product Introduction During the Reporting Period
（1）The main business, products and business model of the Company during the reporting period
Offcn Education is a leading full-category vocational education institution in China, and it is also the pioneer and leader in the field of
enrollment examination training. The company bravely undertakes the mission of the times, continues to create new markets, and
serves the society with friendliness and altruism.
For hundreds of millions of knowledge-based people, the Company's main business covers three major sectors including enrollment
examination training, academic qualification preparation and vocational ability training, and it provides more than 100 categories of
comprehensive vocational training services. The company operates in more than 1,000 outlets across the country, covering more than
300 prefecture-level cities, and is rapidly expanding into thousands of counties and universities.
Offcn Education mainly serves knowledge-based employment population including college students, university graduates, and various
professionals. Their age is from 18 to 45. This huge group of hundreds of millions of people is spread throughout the country, cities
and towns at all levels and in all walks of life. Employment and vocational ability improvement are their two core demands.
Vocational ability determines labor productivity which is the key to China's success in overcoming the “middle income trap”. And
employment is not only a barometer of economic growth, but also a fulcrum of the entire vocational education. It is also the ultimate
arena for vocational education institutions.
For this reason, the vocational education institutions that can get closer to the employment needs in the largest scope and to the greatest
extent can get more opportunities to turn the flywheel of multi-category growth and can become a dominator in the overall vocational
education.
After a long term exploration and accumulation, Offcn Education has a large-scale full-time R&D team of more than 2,000 people, a
large-scale teacher team of more than 13,000 people, and a total staff of more than 35,000 people. Relying on outstanding team
execution and nationwide vertical integration and rapid response capabilities, the Company has developed into an innovation-driven
high-growth enterprise platform.
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
（2） Overview of the industry and business environment in 2019
① The acceleration of economic transformation and public service investment is creating robust momentum both for the
public recruitment test training and for the overall vocational education.
Shortage of public services is a fundamental reality in our country. It forces families to spend more on public consumption by reducing
personal consumption, which significantly limits the economies of scale in consumption, and brings a negative effect on economic
growth. Therefore, it is a popular sentiment to expand public services such as education, medical care, social service and other public
services, so as to benefit both the country and the people.
In the past several years, the demands for recruitment of teachers, civil servants and other public service divisions continuously
remained at a high level. The long term trend of driving economic growth model transformation by expanding public consumption is
formed gradually. Such trend has been confirmed in the second half of 2019, when the state council and relevant department delivered
policies to promote the employment. The outbreak of novel corona virus accelerates the involvement of the trend. Expanding both in
recruitment of public services and enrollment of graduate schools has become a clear orientation of government policy.
② The industry of vocational education bids farewell to the state of dispersal and has entered into a new stage of the demand
release led by the top players of large scale.
From the beginning, the lack of cost-effective products and services with high quality has been the principal contradiction for the
industry. The scale of demand is depressed by the capability of supplying . Except the sector of public service recruitment training,
many sub-tracks of the two larger sectors of academic qualification improvement and vocational training have been in the small-sized
and scattered state for a long time.
There are two main aspects accounting for such situation. Firstly, these two sectors serve the existing labor force mainly as a part-time
learner. The working population is not as concentrated in colleges or universities as those fresh graduates who have the graduation
employment season and demand of employment is highly dispersed. And it is not a direct employment service of colleges or universities,
but only indirectly enhances their employment competitiveness, so the demand is rigid but cannot be compared with the recruitment
field. The external and institutional environment appears more mild and has not produced significant revolutionary forces.
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
By contrast, the booming of the recruitment sector over the past two decades has been driven by the superposition of the forces of
economic and social change in urbanization and the expansion of universities. More importantly, It provides high-value-added services
related to direct employment for the incremental labor force centered on fresh graduates of universities. There are profound market
environment reasons behind the recruitment section that can produce enterprises with billions of revenues. such as Offcn Education. .
Therefore, without the accumulation and transferring of enterprise power formed by the employment market of the incremental labor
population, it is difficult for the pioneers of the existing labor employment market to break the scale ceiling of 1 billion revenues, and
it seems hard for a single track to break the 5 billion scale boundary. .
The emergence of large scale enterprises will have a profound impact on the structure of the existing labor force. From the operation
of the training market related to incremental labor employment to the creation of a training market related to the employment of existing
labor, it will be a great leap forward, and the overall vocational education industry will gain a geometric progression.
The formation of large scale enterprises is an essential prerequisite for the leap. Only large companies can break through the difficult
obstacles brought by the extreme fragmentation of the market. Through full investment in the core areas of management such as R&D,
channels, and management, we can create cost-effective products and detonate the huge demand in order to rotate the high-growth
flywheel to create a tens of billions of vocational education tracks.
③ Main industry characteristics and cyclical characteristics
The industry of vocational education distributes vastly all over the county and demonstrates a significant long-tail
effect. Different from both the K12 tutoring industry and English language training industry which are concentrated
in big cities, the demand of vocational education distributes vastly in every province and every city, especially in
the prefecture-level cities and the counties. Almost every county has a vocational high school, every prefecture-
level city has vocational colleges. The recruitment demand of public employers from prefecture-level cities and
counties also occupies a large proportion, which stimulates lots of local small training institutions to get into the
market and provides a wide space for the large scale players to expand their network of channels. Meanwhile, the
nation-wide operation adds more difficulties to management on one hand, and lifts the barriers to competition on
the other hand.
The training of public services recruitment test is seasonal. Students always take training classes within 1-2
years before or after their graduations.
The national civil servant test takes place once a year, and the provincial examinations for each province are
basically once a year and provinces form a common sense that in the first half of the year, there is a relatively
concentrated large-scale entrance and a small-scale entrance examination in the second half of the year. Institutes
and teachers are recruited according to the needs of the provinces and cities, which are evenly distributed throughout
the year. It is obvious that the number of exams amounts to tens of thousands.
This seasonal fluctuation has caused major growth bottlenecks for small and medium-sized training institutes and
has also provided large institutes with continuous motivation to constantly challenge the scale boundary. With the
rapid increase in examination categories, large institutes will increasingly enjoy the results of scale effects and
obtain a more sound resource allocation structure. In recent years, the momentum of recruitment examinations has
been switched to new areas such as public institutes, teachers and comprehensive recruitment, which has led to the
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
rapid concentration of market share in leading enterprises.
3. Key Accounting Information and Financial Indicators
（1）Major accounting data and financial indicators in the past three years
Does the Company need to adjust its financial information retrospectively or restate its previous year accounting information?
□ Yes √ No
Increase/Decrease
2019 2018 Over Previous Year 2017
End
Revenue (RMB) 9,176,129,995.89 6,236,987,812.57 47.12% 4,031,257,331.70
Net profit attributable to shareholders
1,804,548,688.01 1,152,887,416.22 56.52% 524,837,228.26
of the parent company (RMB)
Net profit after deducting non-
recurring profit or loss attributable to
1,700,369,663.16 1,112,879,085.16 52.79% 495,080,555.61
shareholders of the parent company
(RMB)
Net cash flow from operating
2,473,986,085.19 1,407,946,376.93 75.72% 999,410,591.54
activities (RMB)
Basic earnings per share (RMB/share) 0.29 0.22 31.82% 0.10
Diluted earnings per share
0.29 0.22 31.82% 0.10
(RMB/share)
Weighted average return on net assets 60.71% 71.89% -11.18% 66.93%
Increase/Decrease
Year End 2019 Year End 2018 Over Previous Year Year End 2017
End
Total assets (RMB) 9,960,705,427.94 7,202,071,521.23 38.30% 3,234,754,509.88
Total equity attributable to
shareholders of the parent company 3,431,545,903.82 2,953,951,905.00 16.17% 1,000,314,049.84
(RMB)
（2）Quarterly major accounting data
Unit: RMB
The First Quarter The Second Quarter The Third Quarter The Fourth Quarter
Revenue 1,311,632,662.04 2,325,786,853.44 2,521,688,418.01 3,017,022,062.40
Net profit attributable to
shareholders of the parent 106,193,482.28 386,831,982.87 465,837,656.14 845,685,566.72
company
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
Net profit after deducting non-
recurring profit or loss
107,644,815.54 364,790,101.80 416,140,588.66 811,794,157.16
attributable to shareholders of
the parent company
Net cash flow from operating
2,422,743,973.91 1,932,022,824.62 -1,312,107,088.75 -568,673,624.59
activities
Do the above financial indicators differ significantly from those disclosed in the Company’s quarterly and semi-annual reports
□ Yes √ No
4. Share Capital and Shareholders
（1）Number of common stockholders and preferred stockholders with voting rights restored and the
shareholding conditions of the top 10 shareholders
Unit: share(s)
Total number of
Total number Total number preferred
Total number of common of preferred shareholders
of common shareholders at shareholders with voting
shareholders the end of last with voting rights restored at
31,629 26,733 0 0
at the end of month before rights restored the end of last
reporting the disclosure at the end of month before the
period date of the reporting disclosure date
annual report period of the annual
report
Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them
Total shares Increase/decre Pledged or frozen
Number of Number of
Shareholding held at the end ase of shares
Name of Nature of shares held shares held
Percentage of the during the Status of
shareholder shareholder with sales without sales Amount
(%) reporting reporting shares
restrictions restrictions
period period
Domestic
400,000,00
Lu Zhongfang natural 41.36% 2,550,549,260 2,550,549,260 2,550,549,260 0 Pledged
0
person
Domestic
782,850,00
Li Yongxin natural 18.35% 1,131,415,121 1,131,415,121 1,058,718,560 72,696,561 Pledged
0
person
Domestic
Wang
natural 15.61% 962,471,418 962,471,418 962,471,418 0 Pledged 78,600,000
Zhendong
person
Beijing Domestic
Aerospace non-state- 4.33% 267,353,171 267,353,171 267,353,171 0
Industry owned legal
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
Investment person
Fund (Limited
Partnership)
境内非国有
Beijing
法人
Guangyin
Domestic
Venture Capital 2.89% 178,235,447 178,235,447 178,235,447 0 Pledged 30,000,000
non-state-
Center (Limited
owned legal
Partnership)
person
Beijing Kerui
Technology Domestic
Innovation non-state-
1.44% 89,117,723 89,117,723 89,117,723 0
Investment owned legal
Center (Limited person
Partnership)
Beijing Offcn
Future Domestic
Information non-state-
1.30% 80,000,000 80,000,000 0 80,000,000
Consulting owned legal
Center (Limited person
Partnership)
Domestic
Zhou Xiayun natural 1.28% 78,848,640 0 0 78,848,640 Pledged 62,148,845
person
Domestic
Zhou Hui natural 1.17% 72,277,920 0 0 72,277,920 Pledged 18,249,020
person
Domestic
Zhou Li
natural 0.78% 48,185,280 0 0 48,185,280
person
Particulars about the strategic
investor or general
N/A
legal person who becomes the
top 10 shareholders due to the
placement of new shares
（2）The total number of preferred shareholders and the top 10 preferred shareholders' shareholdings of
the Company
□ Applicable √ N/A
During the reporting period, the Company did not have preferred stockholders holding shares.
（3）The property rights and control relationship between the Company and the actual controller are
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
disclosed in block diagram
5. Corporate Bond
Whether the Company has bonds publicly issued and listed on the stock exchange that have not expired or expired
but not paid in full on the date of approval of the annual report
No
III. Discussion about and Analysis of Business Operation
1. Overview of Business Operation during the Reporting Period
The year of 2019 was the closing year for the reform of national governmental institutions. During the last year, the
overall demand of civil servant recruitment was not meeting our forecast. However, with all your attention and
supports, and thanks to all the great efforts, courage, perseverance and excellent performance of the team, our
company’s performance realized a substantial growth. The amount of performance profits significantly exceeded
the commitment we made for the last year at the time of the company’s major assets restructuring, as well as the
high expectations in the capital market. We are even happier to see that after working wholeheartedly together in
the last year, the will of our team has become stronger, and the fast-response ability of the company’s rapid-growing
platform was again systematically improved. With our performance surpassing the line of 10 billion RMB, it marked
a new fast-growing era of the company under the scale economies effect.
(1) Outstanding execution triggered the superposition of high-growth culture, and the performance of the
current period has been drastically improved.
Under an overall bleak public services recruitment trend throughout the year, the company still achieved rapid
growth against the trend , and laid a solid foundation for the business growth brought about by the 2020 national
employment stabilization policy. During the reporting period, the Company achieved a gross revenue of RMB
9,176,129,995.89, representing an increase of 47.12% as compared with the same period of last year. Accordingly,
the net profits attributable to shareholders of the parent company amounted to RMB 1,804,548,688.01, increased
by 56.52% as compared with the same period of last year; and net profits attributable to shareholders of the parent
company after deducing non-recurring profits and losses amounted to RMB 1,700,369,663.16, increased by 52.79%
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
as compared with the same period of last year.
To achieve such a significant growth in a short period of time with adversity, excellent execution of the team would
be the most important factor, which is embedded in the high-growth culture accumulated and shaped in the long-
term exploration. the company could grow fast naturally when the business climate is good, while under unsound
circumstances, the high-growth culture itself would trigger the superposition of high-growth culture itself and
refresh the team’s understanding of refined operations and actions and thus greatly increase the current business
performance . Then the company can reverse the potential energy of falling and ultimately achieve high growth in
performance. Furthermore, it can solidify this high level of current business performance.
The key Operating Resources and Performance Indicators Shown in the Table Below：
At the End of the Year-on-year
Item Indicators At the End of Last Year
Reporting Period Change (%)
Directly Operated Branches 1,104 701 57.49%
Employees 35,209 25,718 36.90%
Operating
Resources R&D personnel 2,051 1,350 51.93%
Teachers 13,475 9,424 42.99%
Face-to-face Training Students 1,508,160 1,192,103 26.51%
Online Training Students 1,779,196 1,115,779 59.46%
Business
Face-to-face Training Income (RMB) 8,083,730,102.79 5,770,250,029.33 40.09%
Online Training Students (RMB) 1,035,595,638.64 443,502,944.37 133.50%
Revenue (RMB) 9,176,129,995.89 6,236,987,812.57 47.12%
Revenues &
Net profits Attributable to
Profits 1,804,548,688.01 1,152,887,416.22 56.52%
Shareholders of the Company(RMB)
（2）Digital Operation Deeply Matched with the Fast Response System with the Explosive Growth of Online
and Offline Integration Business.
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
During the reporting period, the company proactively embrace innovation, promote the in-depth matching between
digital operations and the vertically integrated rapid response system, and use the power of digital operation to seek
a more effective level of rapid response, further enhancing the company’s core competitiveness based on the speed
economy.
Specifically, the company actively deploy and build a smart teaching platform based on AI and big data technology.
An interactive live broadcast teaching platform of version 3.0, a private cloud platform for education, a new
generation of intelligent learning analysis engine and a strong capability of online R&D and comprehensive service
have enabled the company’s online education business to grow steadily, further consolidating the company’s
industry-leading position of online education and online and offline integrated education.
During the reporting period, the online training business exceeded RMB 1 billion and achieved revenue of RMB
1,035,595,638.64, representing an increase of 133.50%, as compared with the same period of last year.
（3）The scale economy effect of recruitment sector revenue broke the resistance line of RMB 10 billions
During the reporting period, despite the overall severe public services recruitment climate, the performance of the
sector still grew rapidly against the headwind, which made decisive contribution to go beyond the annual
performance target. Among the four major categories of the sector, except the category of training for civil servant
test, all of the rest three categories held growth rate of more 50%.
Such an achievement was not only a progress both in the total amount and in the incremental amount, but also a
critical breakthrough in the magnitude of the scale economy effect of the sector revenue, which demonstrated the
sector’s annual revenue would step into a new level of 10 billions from the previous level of billions. With a stronger
stable employment policy, the sector has got into a new high-growth circle.
Behind the breakthrough of growth level, there came significantly structural change in the momentum of growth
within the sector. The other three categories had achieved a total annual revenue with the same size of civil servant
category. Every category had an annual revenue of more than RMB 1billion on average, which showed a new well-
balanced fast growth mode driven by multicategories.
During the reporting period, the category of training for civil servant test achieved revenue of RMB
4,171,091,369.87, an increase by 30.15%, from revenue of RMB 3,204,932,785.69 last year. Training for public
institution test achieved revenue of RMB 1,401,287,171.43, representing an increase of 58.44%, from revenue of
RMB 884,449,895.82 of the corresponding period of last year. The category of training for teachers’ recruitment
test achieved revenue of RMB 1,932,698,035.79, representing an increase of 60.85%, from revenue of RMB
1,201,551,528.55 of the corresponding period of last year. Besides, although the category of training for other public
service test hasn’t been separated from the item of new businesses statistically, it achieved nearly the same high
growth rate with the category of training for public institution test and the category of training for teachers’
recruitment test.
Training for civil servant test seemed growing steadily in comparison with other categories, but if considered in
the latter period of the institutional reform, both the recruitment of national civil servant and recruitment of the
provincial civil servant declined sharply more than 30% on average, such growth might nominate different
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
meaning. On the one hand, this was the combined achievement of business innovation and excellent execution.
On the other hand, this also revealed significant progress both in training attendance rate and in the concentration
degree of market share. The students orders of the category increased 27.09%, as compared to the corresponding
period of last year. In the meanwhile, the sharp drop in the recruitment put much pressure on the operation of
contractual class, under such circumstance, the unit price of the category still got a positive growth rate, which
proved the leading edge effect of the company in this category again. All of the above also confirmed the early
judgement that there is still strong potential for the growth of the category.
Training for public institution test achieved such a high growth rate out of our expectation. The student orders of
the category increased 43.63%, and the unit price of the category increased by 10.31%, as compared to the
corresponding period of last year. At the beginning of last year, the company reinforced the management team of
the category. So when the recruitment soared in Q3, the team had been well prepared and grasped this valuable
opportunity. More importantly, the warm-up of the recruitment climate demonstrated that after the institutional
reform, public institutions revealed a much more nominating position to offer public services. Accordingly, the
size of recruitment would get into the new orbit of steady rebound. In such a highly fragmented market distributing
mostly in the low-tie cities, the company’s competitiveness of owned channels, capability of teaching and overall
lean operational services could be optimized both in the penetration to the low-tier regional market and in the
expansion in market shares.
Training for teachers’ recruitment test grew robustly. Because some provincial governments postponed their routine
recruitment plan, it finally did not double the revenue. Even though, we still regarded this as short-term change from
outside, the fast-growth trend driven by expansion of recruitment and penetration of operation has never been
changed. Given the upcoming peak of retirement and promotion in the investment of education, the long-term
shortage for K12 teachers would be more than 10 millions people. Expansion of teachers’ recruitment was a key
sparkle in the recent employment stabilizing policy. Actually, it’s not a new situation coming up suddenly, the high-
growth trend has been forged long time ago. The outbreak of novel coronavirus only accelerates the evolvement of
the trend from outside. The category also reveal a trend of increase both in volume and in price. During the reporting
period, the student orders of the category increased 52.89%, and the unit price of the category increased 5.21%, as
compared to the corresponding period of last year respectively. In the first half of the year, the company adjusted
the management team forcefully, and invested in the business decisively. Such experience of expansion verify the
truth that keeping a positive operation standing point would always be paid off by the market.
Training for other public service test kept fast growth with plenty of niche categories, and responded to the tendency
of current policy. During the reporting period, military reform, the policies such as poverty reduction and medical
care promotion create strong opportunity for growth. The team of the category monetized the opportunity quickly,
not only realize the increase both in volume and in price, but also extend the scale of relevant niche categories,
leading the category of small size and fragmented originally head to the milestone of 1 billions in annual revenue.
From the long-term perspective, this category would evolve into another category of training for public institution
test in the region of grass root, since it share the attributes of public services and the diversities of the recruiter. On
the other hand, the incremental amount of recruitment might have more potential to surpass those of the category
of training for public institution test.
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
（4）The leading-geese of the two emerging sectors have been confirmed again. The flock-of-geese of all
categories grew fast and will redefine the border of the industry for next ten years.
After successfully replicating the model of the sector of training for public services recruitment test, training for
graduate school entrance examination and IT skills training enter a new fast-growth business. During the reporting
period, training for graduate school entrance exam achieved a growth rate beyond 100%, and IT skills training even
achieved a high growth rate of more than 300%. More importantly, there comes up a cluster of active categories
with the revenue size of more than RMB 10 million, and more and more categories show their potential to grow
into large scale players.
For a long time, there seldom came up with large scale leading company that could generate a revenue of more than
RMB 1 billion per year in these two sectors. This might be the results of the capability of the operators, but more
importantly, the result lies in the inner developmental logic of the vocational education market. Amid the three
major sectors of vocational education oriented to the college students and graduates, only the training for public
services recruitment test has the chance to cultivate large scale companies, while the other two sectors are not able
to gestate large nationwide companies with annual revenue of RMB billions through its own self development. This
can be explained by the current situation in this industry and its slow development process in such a long time.
This is decided by both the fragmented distribution of working personnel and the characteristic of low-pace from
the demand end. To activate the potential demand within the two sectors, there must the participation of large scale
companies from other industries, which have strong teaching and research capabilities as well as vertically
integrated operation ability. With heavy investment in the long run, exploration the categories one by one, creating
cost-effective products and aggressively cultivate both on the demand side and the supply side, these companies can
eventually trigger out the eruption of the growth potential hidden deeply under separate categories in the market.
It takes this industry 5 years to layout its business resources and explore the developmental opportunities in more
than a hundred programs in these two sectors. Since more and more sectors have generated a revenue above 10
millions and even 100 millions, the scale growth in the next 5-10 years can be expected. Given the large-scale
growth brought by both single category and multi-categories development, the two new sectors will reshape the
future of the company in the next ten years.
2. Is there any major change in the main business during the reporting period?
□ Yes √ No
3. Overview of products which account for more than 10% of the revenue or profit of the company’s main
business
□Applicable √ N/A
4. Is there any seasonal or periodical characteristics in the operation which needs special attention?
□ Yes √ No
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
5. Presentation of major changes in revenue, cost of revenue, total amount or composition of net profits
attributable to shareholders of common stock of public company during the reporting period when compared
to the previous reporting period
□Applicable √ N/A
In 2019, the Company achieved operating revenue of RMB 9,176,129,995.89, representing an increase of 47.12%
as compared to the corresponding period of last year. Accordingly, operating profit amounted to RMB
2,090,668,843.03, representing an increase of 56.02%, and total profit amounted to RMB 2,089,327,430.78,
increased by 55.97%, and net profits attributable to shareholders of the Company amounted to RMB
1,804,548,688.01, increased by 56.52% as compared to the corresponding period of last year respectively.
The rapid growth attributes to the enhancement of the company's leading position in the market and the advantage
in the economies of scale. We have been promoting our management effectiveness and capability of research.
Besides, we have been taking advantage of super execution power of the team. As more and more technology is
implemented in our product and services, our overall competitiveness both in brand and platform becomes much
nominating, accelerating the market shares to concentrate towards the leading player.
6. Conditions of suspension and termination of listing
□Applicable √ N/A
7. Matters related to financial statements
(1) Changes in accounting policy, estimation, and methods when compared to the previous financial year
√Applicable □ N/A
1.Since 1 January 2019, the company has adopted the relevant provisions of "Notice on Revising and Issuing the
Format of General Enterprise Financial Statements for 2019" [Cai Kuai (2019) No. 6] and “Notice on Revision of
the Consolidated Financial Statement format (2019 edition)”([Cai Kuai (2019) No.16] , hereinafter referred to as
"Amendment Notice").Accounting policy changes and the resulting effects are as follows：
Table 1
Projects Adjustment Item
(1) The item "Notes and accounts receivable" is divided into the item "Notes Receivable" and
the item "Accounts Receivable";
(2) The item "Notes and accounts payable" is divided into the item "Notes Payable" and the
item "Accounts Payable"；
Balance Sheet
(3) A new "Financing receivables” item reflects notes and accounts receivable that are
measured at fair value and their changes are included in other comprehensive income;
(4) The new item of "Special reserve" reflects the book value at the end of the period of the
safety production expenses drawn by enterprises in high-risk industries according to state
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
regulations.
(5) New "Right-of-use assets" and "Lease liabilities" items.
(1) A new item entitled "Income generated from the derecognition of financial assets measured
at amortized cost" shall be added to reflect the gains or losses incurred by an enterprise as a
result of the termination of recognition of financial assets at amortized cost due to transfer or
other circumstances;
(2) The items of "Impairment losses of assets" and "Impairment losses of creditability " are
moved to the position after "Gains from changes in fair value" ;
(3) The Income Statement "MINUS: Impairment losses of assets" is adjusted to "PLUS:
The Income Statement Impairment losses of assets(Losses are indicated by "-")" ;
(4) Adjusting the "MINUS: Impairment losses of creditability" in the Income Statement to
"PLUS: Impairment losses of creditability (Losses are indicated by "-") " ;
(5) In the Income Statement, under the item "Investment income" , add the item " Income
generated from the derecognition of financial assets measured at amortized cost (losses are
represented by '-')" ;
(6) The "Net increase in financial assets held for trading purposes" and "Cash received on
issuance of bonds" were deleted from the Income Statement.
The Statement of Cash Flows specifies the scope of the government subsidy, and the actual
Statement of Cash Flow government subsidy received by the enterprise, whether related to assets or income, is listed
under the item " Cash received relating to other operating activities " .
(1) Specifying the scope of the item "Other equity instrument owner's invested capital" and
the item "Other equity instrument owner's invested capital" , the amount of capital invested by
the holders of financial instruments classified as equity instruments other than common shares
Statement of Changes
issued by the Enterprise;
in Owners' Equity
(2) Adding "Extraction and use of special reserve" items to the statement of changes in
owners' equity.
Table 2
The contents and reasons for the
Affected financial statements line items
changes of accounting policies
As of 31 December 2019, the amount of notes receivables and accounts
Divide the “Notes receivable and receivables presented in the statement of the consolidated financial position were
Accounts receivable” into “Notes RMB 0.00 and RMB 2,721,638,09;As of 31 December 2018, the amount of notes
receivables” and “Accounts receivables and accounts receivables were RMB 0.00and RMB 6,804,330.67.
receivables” As of 31 December 2019,both of the notes receivables and accounts receivables are
presented as RMB 0.00. As of 31 December 2018, both of the notes receivables and
14
Offcn Education Technology Co., Ltd.2019 Annual Report Summary
The contents and reasons for the
Affected financial statements line items
changes of accounting policies
accounts receivables are also presented as RMB 0.00.
As of 31 December 2019, the amount of notes payable and accounts payable
presented in the statement of the consolidated financial position were RMB 0.00
and RMB 236,481,990,86;As of 31 December 2018, the amount of notes payables
Divide the “Notes payable and
and accounts receivables were RMB 0.00and RMB 144,564,705.50.
Accounts payable” into “Notes
As of 31 December 2019, the amount of notes payable and accounts payable
payable” and “Accounts payable”
presented in the statement of the parent financial position were RMB 0.00 and RMB
561,752,26 ;As of 31 December 2018, the amount of notes payables and accounts
receivables were RMB 0.00 and RMB 19,854,802.89.
2. Since 1 January 2019, the company has adopted the relevant regulations of the Accounting Standards for
Business Enterprises No.22--Recognition and Measurement of Financial Instruments (Accounting [2017] No.7) and
Accounting Standards for Business Enterprises No.23--Transfer of Financial Assets (Accounting [ 2017] No.8),、
Accounting Standards for Business Enterprises No.24-- Hedging Accounting (Accounting [ 2017] No.9) (and
Accounting Standards for Business Enterprises No.37-- Presentation of Financial Instruments (Accounting [ 2017]
No.14),and based on the cumulative impact, the retained earnings at the beginning of the year and other relevant
items in the financial statements are adjusted, and information for comparable periods is not adjusted. Changes in
accounting policies resulted in an increase of RMB 247,170.28 in the undistributed profit of the consolidated
financial statements on 1 January 2019. The financial statements of the parent company on 1 January 2019 had no
impact.
3. The company has adopted the relevant provisions of the Accounting Standards for Business Enterprises No.7--
Monetary Assets Exchange (Accounting [2019] No.8) from 10 June 2019. The company shall adjust non-monetary
asset exchanges between 1 January 2019 and the implementation date of this standard according to the standards.
The company does not need to make retrospective adjustments to non-monetary asset exchanges that occurred
before 1 January 2019. Changes in accounting policies have no impact on the company's consolidation and the
parent company's financial statements.
4. The Company has adopted the relevant provisions of the Accounting Standards for Business Enterprises No.12--
Monetary Assets Exchange (Accounting [2019] No.9) since 17 June 2019. The company shall adjust the debt
restructuring that occurred between 1 January 2019 and the implementation date of this standard in accordance with
the standards. The company does not need to make retrospective adjustments to debt restructurings that occurred
before 1 January 2019. Changes in accounting policies have no impact on the company's consolidation and the
parent company's financial statements.
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Offcn Education Technology Co., Ltd.2019 Annual Report Summary
(2) Explanation of ratification of major accounting error in the reporting period which needs to be tracked
and restated
□Applicable √ N/A
No ratification of major accounting error in the reporting period which needs to be tracked and restated.
(3) Explanation of changes in the scope of combined financial statements when compared with financial
statements of the previous year
√Applicable □ N/A
Proportion of
The name of the subsidiary Reason for changes
shareholding (%)
Tonghua Offcn Co., Ltd. 100.00 New establishment
Hunan Lightsalt Offcn Co., Ltd. 90.00 New establishment
Tianjin Hexi Offcn Co., Ltd. 100.00 New establishment
Chengdu Offcn Co., Ltd. 100.00 New establishment
Shandong Zuoda Business Management Co., Ltd. 100.00 New establishment
Liaoning Zhongcheng Real Eestate Development Co., Ltd. 100.00 Acquisition
(4) Expected operating performance in the first three months of 2019
□Applicable √ N/A
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