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Zebra Consumption Shen Tuo

After the refund incident, Offcn Education’s Li Yongxin finally couldn’t sit still anymore.

Recently, Offcn Education announced that Li Yongxin and his mother Lu Zhongfang planned to invest no more than 400 million yuan to increase their holdings in the company to boost market confidence. Although it was a little late, the market still gave applause. Yesterday, the company's stock price rose by 3.60%.

In order to improve the company's performance, Li Yongxin is also following Yu Minhong's example and taking the road of live streaming to sell goods. In his first live broadcast half a month ago, he said that as long as it can help the company develop well, he will do anything he has never done before and dared not do.

A series of negative events in recent years have seriously affected Offcn Education, and Li Yongxin decided to take the risk.

400 million increase

For more than a month, the share price of Offcn Education Group (002607.SZ) has been falling, and Li Yongxin finally couldn't sit still anymore.

On July 16, after the market closed, the company disclosed an announcement that the controlling shareholder Li Yongxin and his person acting in concert Lu Zhongfang planned to invest 200-400 million yuan to increase their holdings within 6 months. Lu Zhongfang is Li Yongxin's mother.

Currently, Li and Lu hold 944 million and 85 million shares of the company respectively, accounting for 15.31% and 1.37% of the shares. Li Yongxin and his persons acting in concert hold a total of 1.109 billion shares, accounting for 17.98% of the company's total share capital.

After the disclosure of the share purchase plan, the sentiment of small and medium-sized investors was high. Yesterday, the intraday increase was as high as more than 8%, and the stock closed at 1.44 yuan, up 3.60%, with a total market value of 8.881 billion yuan.

Since 2021, the company has suffered huge losses year after year, and has difficulty in refunding fees. The signs of distress have directly affected market sentiment. From June 3 to 5, the company's closing price decline deviation value for three consecutive trading days reached more than -20%. During this period, it fell below 2 yuan and has not returned to above the 2 yuan line so far.

Under the new policy of delisting at par value, this situation is quite dangerous and is likely to continue to affect market confidence.

At the same time, unfavorable rumors about the company came one after another, such as bankruptcy and shareholder pledge. Li Yongxin had to come forward to clarify the rumors through the media.

Live broadcast crying poor

Suffering from the double "torture" of stock prices and performance, Li Yongxin had to go on stage himself and follow the example of the bosses of educational and training institutions such as Oriental Selection and Xueersi to start live streaming to sell goods.

On the evening of July 1, he walked into the live broadcast room of Offcn and started his first live broadcast. During the live broadcast, he spent a lot of time publicly responding to questions such as students' refunds.

He said he would like to apologize to all students who have not yet received a refund or are in the process of getting a refund. "Give us some time, we will definitely pay back every penny we owe to the students."

The attitude is an attitude, but the refund timetable has not yet been clarified. It is also difficult for the outside world to know how large the refund scale of Offcn Education is.

Why is a civil service exam training institution struggling with the refund issue? This is related to the agreement class business model launched by the company.

In 2007, Li Yongxin was the first in the industry to launch a "refund if you fail" agreement class model in the civil service exam training market, preparing to squeeze out small and medium-sized players. This is equivalent to a small bet: if you fail the civil service exam or interview, the company will refund part or all of the fees.

The new "refund if not accepted" approach has attracted a large number of students to the company. However, this has also planted a major hidden danger for the company.

In February 2024, the topic of the 40 million yuan refund gap of Offcn Education in Hunan Province became a hot topic. According to an investigation by China National Radio, in addition to Hunan Province, many Offcn Education branches have been in arrears of refunds. A student in Henan Province has been trying to recover the 40,000 yuan tuition fee for nearly two years.

Public data shows that the refund amount and refund rate of Offcn Education have been rising year by year. From 2019 to 2021, the refund amount was 7.423 billion yuan, 10.009 billion yuan and 15.302 billion yuan respectively, and the refund rate was 44.14%, 46.54% and 68.46%. During the same period, the number of refunds was 816,000, 1.1315 million and 1.6212 million respectively, and the refund unit price was 9,097.19 yuan, 8,846 yuan and 9,438.59 yuan.

The success or failure of the agreement class is due to the agreement class. In January 2022, the company stopped the "refund if not passed" agreement class, and has not yet been able to get out of the shadow of refund.

Cashing out 10 billion

More than 20 years ago, Li Yongxin graduated from Peking University. He tried his hand in primary school, Mathematical Olympiad, college entrance examination and repeater training. After continuous exploration and accumulation in the education and training industry, he finally chose the track of civil service examination.

In this field, there are many experts such as Fanbi and Huatu. The company launched the killer feature of "refund if not accepted", and the business is booming. In 2015, it surpassed Huatu Education, the leader in civil service examinations, and four years later, its market share is twice that of Huatu Education.

The situation was very good, and the company went public through a backdoor listing in 2019. That year, Lu Zhongfang and Li Yongxin, mother and son, ranked first on the Hurun Education Entrepreneurs List with a wealth of 58.5 billion yuan.

Before the backdoor listing, Li Yongxin, Lu Zhongfang and others made performance commitments, stating that the non-GAAP net profit from 2018 to 2020 would be no less than 930 million yuan, 1.3 billion yuan and 1.65 billion yuan respectively, totaling 3.88 billion yuan.

After completing the performance commitment, the company's operating conditions immediately changed. From 2021 to 2023, operating income dropped from 6.912 billion yuan to 3.086 billion yuan, and net profit attributable to the parent company was in the red for three consecutive years, with a cumulative loss of 3.68 billion yuan.

This year, the situation has improved. In the first quarter, the company's operating income was 764 million yuan and its net profit attributable to the parent company was 82.7928 million yuan, down 14.08% and 240.67% year-on-year respectively.

However, the financial situation remains grim. As of the end of March this year, the company's asset-liability ratio was as high as 91.08%, with short-term debts and non-current liabilities due within one year totaling 954 million yuan, which was difficult to cover with the 624 million yuan in cash on hand.

Looking back, Li Yongxin was so high-spirited. In 2021, a year of great losses, he donated 1 billion yuan to his alma mater, the highest single donation since the founding of Peking University, and he also vowed to donate another 10 billion yuan in the future.

As of the announcement on June 27, Li Yongxin and Lu Zhongfang have pledged a total of 644 million and 59 million shares, accounting for 68.17% and 69.67% of the total shares held, respectively. In the next six months, Li Yongxin will have 570 million shares pledged, corresponding to a financing balance of 400 million yuan.

In the past two years, Li Yongxin's family has cashed out nearly 10 billion yuan through a series of share reductions. Could he be short of money?