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中公教育:2020年半年度报告摘要(英文版)2020-08-31  

						                                                            Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary

Stock Code:002607                                    Stock Abbr.:OFFCN EDU                      Announcement No.:2020-029


                                Offcn Education Technology Co., Ltd.
                                  2020 Semi-Annual Report Summary

I. Important Notes

This summary is extracted from the full semi-annual report. In order to fully understand the Company's operating results, financial
status and future development plan, investors should read the full semi-annual report carefully disclosed on the media designated by
the China Securities Regulatory Commission (CSRC). The Company’s 2020 Semi-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 here by
guarantee the authenticity, accuracy and completeness of the annual report also without misrepresentations, misleading s tatements, or
material omissions, and bear individual and joint legal liabilities.

All directors of the Company personally attended the board meeting to review this semi-annual report.

Notes of non-standard audit opinion
□ Applicable      √ Not applicable

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      √ Not applicable

There is no plan of cash bonus, dividend distribution and capitalizing of common reserves carried out by the Company

The plan for the distribution of preferred stock profits during the reporting period is adopted by the board of directors thr ough
resolution.

□ Applicable      √ Not applicable


II. Basic Situation of the Company

1. Company Profile


Stock Abbreviation                   OFFCN EDU                                       Stock Code              002607

Stock Exchange for Stock Listing Shenzhen Stock Exchange

   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, China Xueqing Road, Haidian District, Beijing, China

Tel                                  010-83433677                                    010-83433677

E-mail                               ir@offcn.com                                    ir@offcn.com
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                                                                Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary

2. Key Accounting Information and Financial Indicators

Does the Company need to adjust its financial information retrospectively or restate its previous year accounting information?

□ Yes    √ No

                                                                                                                         Increase/Decrease Over
                                                         During the Reporting             Same Period of the
                                                                                                                           Same Period of the
                                                                  Period                     Previous Year
                                                                                                                              Previous Year

Revenue (RMB)                                                    2,807,980,480.60              3,637,419,515.48                            -22.80%

Net profit attributable to shareholders of the
                                                                  -233,026,645.16                  493,025,465.15                         -147.26%
parent company (RMB)

Net profit after deducting non-recurring profit
or loss attributable to shareholders of the                       -367,542,382.83                  472,434,917.34                         -177.80%
parent company (RMB)

Net cash flow from operating activities (RMB)                    4,063,675,504.19              4,354,766,798.53                             -6.68%

Basic earnings per share (RMB/share)                                         -0.04                             0.08                       -150.00%

Diluted earnings per share (RMB/share)                                       -0.04                             0.08                       -150.00%

Weighted average return on net assets                                       -9.00%                        16.56%                           -25.56%

                                                                                                                         Increase/Decrease over
                                                            At the end of this             At the end of the
                                                                                                                         the end of the previous
                                                            reporting period                 previous year
                                                                                                                                  year

Total assets (RMB)                                              13,263,976,215.43              9,960,705,427.94                            33.16%

Total equity attributable to shareholders of the
                                                                 1,745,243,405.30              3,431,545,903.82                            -49.14%
parent company (RMB)


3. Number of Shares and Shareholders

                                                                                                                                   Unit: share(s)


                                                                  Total number of preferred
 Total number of common shareholders at                           shareholders with restored voting
                                                        33,231                                                                                  0
 the end of reporting period                                      rights at end of the reporting
                                                                  period (if any)

                                          Particulars about shares held by the top 10 shareholders

                                                 Shareholding                           Number of                     Pledged or frozen
                              Nature of
 Name of shareholder                               percentage       Shares held      shares held with
                             shareholder
                                                      (%)                            sales restrictions   Status of shares         Amount


                         Domestic natural
 Lu Zhongfang                                          41.36%       2,550,549,260      2,550,549,260           Pledged              450,000,000
                         person




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                                                          Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary


                        Domestic natural
Li Yongxin                                          18.35%     1,131,415,121      1,095,063,560        Pledged             774,495,000
                        Person

                        Domestic natural
Wang Zhendong                                       15.61%       962,471,418        962,471,418        Pledged             107,100,000
                        person

Beijing Aerospace
                        Domestic non-
Industry Investment
                        state- owned legal           4.33%       267,353,171        267,353,171
Fund(Limited
                        person
Partnership)

Beijing Guangyin
                        Domestic non-
Venture Investment
                        state-owned legal            2.89%       178,235,447        178,235,447
Center (Limited
                        person
Partnership)

Beijing Kirui Venture
                        Domestic non-
Investment
                        state-owned legal            1.44%         89,117,723        89,117,723
Center(Limited
                        person
Partnership)

Beijing Offcn Future

Information             Domestic non-

Consulting              state-owned legal            1.30%         80,000,000                  0

Center(Limited          person

Partnership)

                        Domestic natural
Zhou Xiayun                                          1.28%         78,848,640                  0       Pledged              37,148,845
                        person

                        Domestic natural
Zhou Hui                                             1.17%         72,277,920                  0       Pledged                9,450,000
                        person

Hong Kong Securities Overseas legal
                                                     0.84%         52,098,611                  0
Clearing Co.,Ltd.       person

                                             The controlling shareholders and the actual controllers of the Company Lu Zhongfang
Explanation on the related relationship      and Li Yongxin are mother and son. Lu Zhongfang, Li Yongxin and Beijing Offcn
and concerted actions among the above-       Future Information Consulting Center (Limited Partnership) are acting in concert. Zhou
mentioned shareholders                       Xiayun and Zhou Hui are father and son. The Company does not know whether the
                                             other shareholders are related parties or whether they are acting-in-concert parties.

Explanation on the top 10 shareholders’
                                             N/A
participation in margin financing (if any)



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                                                  Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary

4.Changes of controlling shareholders or actual controller

Controlling shareholder changed in the period

□ Applicable √ Not applicable

Controlling shareholders had no change in reporting period.

Actual controller changed in the period

□ Applicable √ Not applicable
Actual controller had no change in reporting period

5.The total number of preferred shareholders and the top 10 preferred shareholders' shareholdings of the
Company

□ Applicable √ Not applicable

During the reporting period, the Company did not have preferred stockholders holding shares.

6. 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

In the first half of this year, the outbreak of the pandemic led to the national suspension from work and classes. As
a result, a large number of recruitment examinations were postponed.These significant changes have had a huge
impact on the entire education and training industry. With the gradual lifting of the pandemic, the industry has
fully recovered and achieved rapid growth.

In response to the new situation after the pandemic, the central government put forward policies to ensure stability
and security in six areas (Ensure stability in employment, financial operations, foreign trade, foreign investment,
domestic investment, and expectations; ensure security in job, basic living needs, operations of market entities,
food and energy security, stable industrial and supply chains, and the normal functioning of primary-level
governments). These policies make the "employment" a top priority, which is evident in three measures. The first
is to expand employment in public sectors. The number of civil servants, governmental institutions, state-owned
enterprises and other recruitment increased by more than 20% year-on-year. The second is to expand admissions
of postgraduate students, college students applying for university study, students pursuing second bachelor's
degrees, and students aimed at vocational education, the number of whom has reached 1.7 million. These
measures indicate a clear expansion trend in the mid-term and long-term recruitment sector. In this case, the
education and training industry will still be developing at a medium and high speed in the next 5 to 10 years.
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                                                 Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary

Faced with the sudden outbreak of the pandemic, which had a huge impact on the operating environment, the
Company responded quickly and effectively to maximize the enterprise’s strengths of digital resources, to
considerably increase the total number of online classes, and to fully explore the potential of online and offline
curriculum integration, which not only ensures the continuity of operation and teaching, but also strengthens the
enterprise’s leading force of online and offline curriculum integration, an innovative product. Besides, the
Company continues to expand teacher-reserve and branches, focusing on the long-term expansion trend. Due to
the postponement of related examinations, part of the revenue was delayed for nearly 4 months, which made the
Company’s recognized operating revenue decreased during the reporting period, compared with the same period
of last year. With the resumption of all kinds of recruitment examinations, the Company has entered a period of
explosive growth.

The number of college graduates reached 8.74 million in this year of 2020, creating a new record. However, the
nationwide pandemic has further increased employment pressures. Two decades after the expansion of university
enrollment, the employment population structure has undergone significant changes, and the number of college
graduates has reached more than half of the total of new employees.The focus of stabilized employment will also
be shifted from the general job seekers to college graduates.

With the changes of the international situation, the central government put forward a new policy of internal
circulation; and an important support for the development of internal circulation is the new urbanization. The new
urbanization is not only the reconfirmation of the trend of mid-term and long-term urbanization, but also the
refinement of the urbanization path, which presents diverse patterns of urban clusters with different levels, such as
metropolitan areas, central cities, counties, featured towns ,etc, which can further expand the development
space.More importantly, the new urbanization will also be a deepening process and the most important aspect of
which is the deepening and upgrading of public services.Therefore, the following expansion of public sector’s
recruitment will be strongly guided by the new policy on internal circulation..

(1)The postponement of recruitment examinations result in the delay of income recognition, but the
trend of enrollment expansion is again confirmed.

The civil servant provincial joint examination was postponed for nearly 4 months, and other recruitment
examinations were also postponed to a certain extent in the first half of this year. In the case that the agreement
class accounted for a relatively high proportion, the delay of the examination resulted in a significant discrepancy
between the level of revenue recognition for the reporting period and that of actual operation.During the reporting
period, the Company achieved a total income of RMB 2,807,980,480.60 , down 22.80% from
RMB3,637,419,515.48 in the same period of last year.

Contrary to the decrease in recognized revenue, the number of students increased by 37.08% year-on-year, from
1,788,952 to 2,452,252 during the reporting period; the contract liabilities (advanced payment after deducting the
VAT ) was RMB 7,222,148,935.39, an increase of 31.50% over the same period of last year.

Normally, the first half of the year is an intensive period for civil service examinations. As a result of the

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                                                      Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary

pandemic, the focus of the civil service examinations was delayed by 3-4 months and moved back to the second
half of the year. Nevertheless, not only did the examination resume successfully, but the number of recruits also
achieved a more consistent or even higher growth rate than expected. Compared with civil servants recruitment,
there is much more room for recruitment in public services such as teachers, doctors and police. Therefore, the
reconfirmation of expansion trend in civil servants recruitment clearly indicates the expansion trend in the
recruitment of public service categories.

The key operating resources and performance indicators are shown in the table below:

                                                                                                      Change at the end of this

                                                        At the end of the                                 reporting period
         Item                   Indicators                                  At the end of last year
                                                        reporting period                              compared with the end of

                                                                                                              last year

                        Directly operated branches           1,335                  1,104                     20.92%

                               Employees                     41,911                35,209                     19.03%
  Operating resources
                             R&D personnels                  2,702                  2,051                     31.74%

                         Teaching professionals              18,036                13,475                     33.85%

                                                        At the end of the                                  Year-on-year
         Item                   Indicators                                  Same period last year
                                                        reporting period                                    change (%)

                         Revenue of face-to-face
                                                       1,622,095,227.36       3,167,825,822.38               -48.79%
                             training (RMB)

                        Revenue of online training
                                                       1,166,091,772.30       444,519,141.21                 162.33%
                                 (RMB)

      Business &            Training Students
                                                           2,452,252              1,788,952                   37.08%
       Revenues

                             Revenue (RMB)              2,807,980,480.60      3,637,419,515.48                -22.80%

                        Net profits Attributable to

                           Shareholders of the          -233,026,645.16        493,025,465.15                -147.26%

                            Company(RMB)

(2) The outbreak of Covid-19 is preventable, controllable, and predictable, and the Company has
established a comprehensive response system as a countermeasure, which greatly enhanced its leading force
in education and training industry.

The outbreak of the pandemic has caused great distress to the whole education industry. With the advantages of
the enterprise’s platform and its excellent execution, the Company quickly created an effective response system,
which not only enabled itself to go through the special period smoothly, but also took the opportunity to expand its
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                                                  Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary

leading force and dominance.

In response to the problem that face-to-face teaching could not be carried out smoothly within a certain period of
time, the Company made every effort to explore the digital resources in the enterprise platform. With the
advantageous and standardized teaching and researching ability as a lever, digital penetration is carried out on the
main course products, which again strengthens the leading advantage of online and offline integrated curriculum,
so that more students can obtain the convenience of online learning and the effectiveness of face-to-face learning
at the same time. As a result, the number of students in the reporting period increased significantly.

After the second quarter, with the pandemic gradually put into normalized prevention and control, people all over
the country return to work and production. The second round of the epicemic in Beijing, Dalian and other places
has been controlled rapidly and effectively, which once again reflects the relevant judgment that the pandemic is
preventable, controllable and predictable.

(3)Focusing on the future long-term growth, the Company significantly expands talent reserve and
branches, though moving against general trend.

Based on a clearer med-term and long-term trends in recruitment expansion and the expectation that the pandemic
can be prevented and controlled, the company did not reduce the number of staff or eliminate branches but
considerably expanded talent reserve and the scale of branches.

At the end of this reporting period, the total number of employees of the company was 41911, an increase of 6,702
compared with 35,209 in 2019, an increase of 19.03%. Among them, there are 18,036 teaching professionals,
4,561 more than 13,475 in 2019, an increase of 33.85%. There are 2,702 full-time R&D personnels, 651 more
than 2,051 in 2019, an increase of 31.74%.

There are 1,335 outlets, 231 more than 1,104 in 2019, an increase of 20.92%.

(4) The “take-off action” of the new business sector has been fruitful, and the capacity of talent reserve
has been gradually released.

During the reporting period, new businesses such as postgraduate entrance examinations and medical services still
remained highly active, and new businesses seldom adopted the product model of agreement classes. The revenue
recognition was not affected by examination delays,thus driving the comprehensive sequence in which they were
located with revenue increased by 26.04% year-over-year increase.At the same time, as delays of recruitment
examinations led to a decrease in revenue recognition of the relevant sequences,the revenue share of integrated
sequence increased to 34.58 percent from 21.18 percent in the same period of last year .

Around 2019, the Company completed a round of intensive investments in resources of the active new businesses,
especially in key categories such as postgraduate entrance examinations to achieve the leading scale of core
teaching and research resources at one time.In addition, starting from the second half of 2019, the Company has
taken "take-off action" for the new business segments, investing more management resources in the new
businesses from the top level.


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                                                         Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary

The outbreak of the pandemic strengthened the Company's determination to expand its operations across sectors,
which also verified the rationality of strengthening the development of the marketing part for recruitment
examinations. As a result, the special actions have been further strengthened and deepened.It has also boosted the
current performance of related categories,and more importantly, further improved the overall layout advantages,
which is conducive to realizing the medium and long-term sector’s rotating growth trend.

In terms of the external situation, the academic qualification improvement sector has directly benefited from the
strengthening of the employment stabilization policy since the pandemic. The Ministry of Education has increased
its enrollment for further studies this year. The three expanded enrollments for postgraduates, undergraduates and
second bachelors will absorb more than 1.7 million people, including about 1.4 million fresh graduates. According
to relevant departments, 189,000 more graduate students will be admitted this year. It is estimated that the
enrollment expansion will exceed 20%. The enrollment expansion of ordinary junior college students is 322,000.
The enrollment expansion will mainly favor college applicants who will apply for majors that are promoted by
national strategy or urgently needed by the society; and the enrollment expansion will take place in colleges and
universities which are in the central and western regions and northeast China.


2. Matters related to financial statements

(1) Changes in accounting policy, estimation, and methods when compared to the previous financial period

√Applicable    □ Not applicable

Content and reasons of changes in accounting policies                  Approval procedures                  Remarks

According to the revised Accounting Standards for                               The Company adjusted the
                                                    Approved by the 10th
Business Enterprises No. 14 - Revenue (Accounting                               amount of relevant items in
                                                    Meeting of the 5th Board of
[2017] No. 22) (hereinafter referred to as the new                              the    opening      financial
                                                    Directors and the 9th
revenue standard) issued by the Ministry of Finance                             statements, not adjusting the
                                                    Meeting of the 5th Board of
on July 5, 2017, the Company will implement the new                             information     in        the
                                                    Supervisors.
revenue standard from January 1, 2020.                                          comparable periods.

(2) Explanation of ratification of major accounting error in the reporting period which needs to be tracked
and restated
□Applicable    √ Not applicable


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    □ Not applicable




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                                              Offcn Education Technology Co., Ltd.2020 Semi-Annual Report Summary


                                                           Acquisition disposal of      Impact on overall

               The name of the subsidiary                  subsidiaries during the    production operations

                                                              reporting period          and performance

Shaanxi OFFCN Technology Co., Ltd.                            New establishment          No major impact

Beijing OFFCN Future Education Technology Co., Ltd.           New establishment          No major impact




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