UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of March 2020

 

Commission file number: 001-38423

 

 

 

SUNLANDS TECHNOLOGY GROUP

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Building 4-6, Chaolai Science Park, No. 36

Chuangyuan Road, Chaoyang District

Beijing, 100012, the People’s Republic of China

+86-10-52413738

 


(Address of Principal Executive Offices)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F            Form 40-F  

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.

  

Description

     
99.1   Press Release

 

 

 

 

 

 

 

 

 

 

Signature

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    Sunlands Technology Group
     
     
Date: March 27, 2020   By: /s/ Yipeng Li
        Name: Yipeng Li
        Title: Chief Financial Officer

 

 

 

 

 

Sunlands Technology Group Announces Unaudited  

Fourth Quarter and Full Year 2019 Financial Results

 

Q4 net revenues decreased by 3.4% year-over-year 

Q4 gross billings (non-GAAP) decreased by 15.5% year-over-year 

Q4 new student enrollments1 decreased by 22.6% year-over-year

 

BEIJING, March 27, 2020 -- Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), a leader in China’s online post-secondary and professional education, today announced its unaudited financial results for the fourth quarter ended December 31, 2019.

 

Fourth Quarter 2019 Financial and Operational Snapshots

 

·Net revenues were RMB549.7 million (US$79.0 million), representing a 3.4% decrease year-over-year.

 

·Gross billings (non-GAAP) were RMB642.0 million (US$92.2 million), representing a 15.5% decrease year-over-year.

 

·Gross profit was RMB448.2 million (US$64.4 million), representing an 8.6% decrease year-over-year.

 

·Net loss was RMB139.5 million (US$20.0 million), representing a 24.0% decrease year-over-year. Net loss margin, defined as net loss as a percentage of net revenues, decreased to 25.4% from 32.3% in the fourth quarter of 2018.

 

·New student enrollments were 92,718, representing a 22.6% decrease year-over-year.

 

·As of December 31, 2019, the Company’s deferred revenue balance was RMB3,228.8 million (US$ 463.8 million).

 

 

 

 

________________ 

1New student enrollments for a given period refers to the total number of orders placed by students that newly enroll in at least one course during that period (including those students that enroll and then terminate their enrollment with us, excluding orders of our low-price courses). In June 2019, we introduced low-price courses, including “mini courses” and “RMB1 courses,” to strengthen our competitiveness and improve customer experience. We offer such low-price courses mainly in the formats of recorded videos or short live streaming.

 

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Full Year 2019 Financial and Operational Snapshots

 

·Net revenues were RMB2,193.9 million (US$315.1 million), representing a 11.1% increase year-over-year.

 

·Gross billings (non-GAAP) were RMB2,358.5 million (US$338.8 million), representing a 26.6% decrease year-over-year.

 

·Gross profit was RMB1,797.6 million (US$258.2 million), representing a 9.4% increase year-over-year.

 

·Net loss was RMB395.2 million (US$56.8 million), representing a 57.4% decrease year-over-year. Net loss margin, defined as net loss as a percentage of net revenues, decreased to 18.0% from 47.0% in the full year 2018.

 

·New student enrollments were 363,013, representing a 31.0% decrease from the full year 2018.

 

“In the fourth quarter of 2019, we continued to focus on our multi-pronged strategy for student acquisition and retention. Our efforts centered around the further development and differentiation of our products and services through the application of big data analytics and AI technology. This has allowed us to produce significant operational benefits to both our employees and students, facilitate our digital transformation, and further strengthen our data security and risk control capabilities,” said Mr. Tongbo Liu, Chief Executive Officer of Sunlands. “In order to satisfy the diverse needs of our students, we also continued broadening our online course offerings, with more choices for master’s-oriented and professional certificate programs. Our master’s-oriented programs accounted for 19.8% of total gross billings in the fourth quarter of 2019, significantly higher compared with 7.8% in the same period a year ago. These initiatives, coupled with and our solid track record of pass rates, position us well to capture the strong long run growth opportunity in the online post-secondary and professional education market.”

 

Mr. Steven Yipeng Li, Chief Financial Officer of Sunlands, said, “Our net revenues were RMB549.7 million in the fourth quarter of 2019, in line with our guidance. Our gross billings and new student enrollments declined 15.5% and 22.6%, respectively, year-over-year, primarily as a result of slowing macroeconomic growth in China and adjustment of marketing strategies in view of challenges in student acquisition cost. During the fourth quarter, we continued to pursue a balanced approach to grow revenue and improve profitability, by executing our student acquisition strategy while continually streamlining our cost structure. Our administrative expenses, as well as sales and marketing expenses decreased by 30.9% and

 

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10.2%, respectively, compared with the same quarter last year. Our cost efficiency improvement measures led to a reduction in net loss in the fourth quarter, to RMB139.5 million, 24.0% lower compared with a loss of RMB183.7 million in fourth quarter of 2018. Looking ahead into 2020, we are optimistic that our dedication to persistent product and service upgrades will continue to bring value to our customers, and ultimately our shareholders.

 

Financial Results for the Fourth Quarter of 2019

 

Net Revenues

 

In the fourth quarter of 2019, net revenues decreased by 3.4% to RMB549.7 million (US$79.0 million) from RMB568.8 million in the fourth quarter of 2018. The decrease was mainly due to the decrease of gross billings in 2019 compared with 2018.

 

Cost of Revenues

 

Cost of revenues increased by 29.3% to RMB101.5 million (US$14.6 million) in the fourth quarter of 2019 from RMB78.5 million in the fourth quarter of 2018, which was primarily due to an increase in our insurance-related costs as we began to offer a bundled service including an integrated online education service package with insurance coverage for tuition refund. Our insurance-related costs refer to the premium that we pay for the insurance in order to deliver such integrated online education service package purchased by students.

 

Gross Profit

 

Gross profit decreased by 8.6% to RMB448.2 million (US$64.4 million) in the fourth quarter of 2019 from RMB490.3 million in the fourth quarter of 2018.

 

Operating Expenses

 

In the fourth quarter of 2019, operating expenses were RMB599.0 million (US$86.0 million), representing a 14.4% decrease from RMB699.7 million in the fourth quarter of 2018.

 

Sales and marketing expenses decreased by 10.2% to RMB476.1 million (US$68.4 million) in the fourth quarter of 2019 from RMB530.1 million in the fourth quarter of 2018. The decrease was mainly due to reduced marketing spending, reflective of disciplined, prudent cost management, and the decrease in expenses related to sales and marketing personnel.

 

General and administrative expenses decreased by 30.9% to RMB98.6 million (US$14.2

 

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million) in the fourth quarter of 2019 from RMB142.6 million in the fourth quarter of 2018. The decrease was mainly due to the decrease in office and compensation expenses.

 

Product development expenses decreased by 9.9% to RMB24.3 million (US$3.5 million) in the fourth quarter of 2019 from RMB27.0 million in the fourth quarter of 2018. The decrease was primarily due to a decrease in the number of employees and compensation incurred related to our product and technology development personnel during the quarter.

 

Net Loss

 

Net loss for the fourth quarter of 2019 was RMB139.5 million (US$20.0 million), compared with RMB183.7 million in the fourth quarter of 2018.

 

Basic and Diluted Net Loss Per Share

 

Basic and diluted net loss per share was RMB20.46 (US$2.94) in the fourth quarter of 2019.

 

Cash and Cash Equivalents and Short-term Investments

 

As of December 31, 2019, the Company had RMB1,402.2 million (US$201.4 million) of cash and cash equivalents and RMB217.6 million (US$31.3 million) of short-term investments, compared with RMB1,248.8 million of cash and cash equivalents and RMB1,028.6 million of short-term investments as of December 31, 2018.

 

Deferred Revenue

 

As of December 31, 2019, the Company had a deferred revenue balance of RMB3,228.8 million (US$463.8 million), compared with RMB3,286.0 million as of December 31, 2018.

 

Capital Expenditures

 

Capital expenditures were incurred primarily in connection with purchases of buildings and IT infrastructure equipment necessary to support Sunlands’ operations. Capital expenditures were RMB10.4 million (US$1.5 million) in the fourth quarter of 2019, compared with RMB263.1 million in the fourth quarter of 2018.

 

Financial Results for the Year 2019

 

Net Revenues

 

In 2019, net revenues increased by 11.1% to RMB2,193.9 million (US$315.1 million) from

 

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RMB1,974.0 million in the year of 2018. The increase was mainly driven by the growth in the number of students in 2019 compared to 2018.

 

Cost of Revenues

 

Cost of revenues increased by 20.0% to RMB396.3 million (US$56.9 million) in the year of 2019 from RMB330.4 million in 2018, which was primarily due to an increase in our insurance-related costs as we began to offer a bundled service including an integrated online education service package with insurance coverage for tuition refund. Our insurance-related costs refer to the premium that we pay for the insurance in order to deliver such integrated online education service package purchased by students.

 

Gross Profit

 

Gross profit increased by 9.4% to RMB1,797.6 million (US$258.2 million) from RMB1,643.6 million in 2018.

 

Operating Expenses

 

In the year of 2019, operating expenses were RMB2,257.3 million (US$324.2 million), representing a 15.5% decrease from RMB2,672.5 million in the year of 2018.

 

Sales and marketing expenses decreased by 16.7% to RMB1,792.3 million (US$257.4 million) in 2019 from RMB2,152.8 million in 2018. The decrease was mainly due to reduced marketing spend, reflective of disciplined, prudent cost management, and a decrease in expenses related to sales and marketing personnel.

 

General and administrative expenses decreased by 18.1% to RMB363.3 million (US$52.2 million) in 2019 from RMB443.7 million in 2018.

 

Product development expenses increased by 33.8% to RMB101.7 million (US$14.6 million) in 2019 from RMB76.0 million in 2018.

 

Net Loss

 

Net loss for 2019 was RMB395.2 million (US$56.8 million), compared with RMB927.0 million in 2018.

 

Basic and Diluted Net Loss Per Share

 

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Basic and diluted net loss per share was RMB57.81 (US$ 8.30) in 2019, compared with RMB147.27 in 2018.

 

Capital Expenditures

 

Capital expenditures were incurred primarily in connection with purchases of buildings and IT infrastructure equipment necessary to support Sunlands’ operations. Capital expenditures were RMB25.5 million (US$3.7 million) in 2019, compared with RMB518.4 million in 2018.

 

Outlook

 

For the first quarter of 2020, Sunlands currently expects net revenues to be between RMB540.0 million to RMB560.0 million, which would represent a decrease of 4.3% to 0.7% year-over-year.

 

The above outlook is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to substantial uncertainty.

 

Exchange Rate

 

The Company’s business is primarily conducted in China and all revenues are denominated in Renminbi (“RMB”). This announcement contains currency conversions of RMB amounts into U.S. dollars (“US$”) solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.9618 to US$1.00, the effective noon buying rate for December 31, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2019, or at any other rate.

 

Conference Call and Webcast

 

Sunlands’ management team will host a conference call at 7:30 AM U.S. Eastern Time, (7:30 PM Beijing/Hong Kong time) on March 27, 2020, following the quarterly results announcement.

 

The dial-in details for the live conference call are:

 

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International: 1-412-902-4272
US toll free: 1-888-346-8982
Canada toll free: 1-855-669-9657
Mainland China toll free: 400-120-1203
Hong Kong toll free: 800-905-945
Hong Kong: 852-3018-4992

 

Please dial in 10 minutes before the call is scheduled to begin. When prompted, ask to be connected to the call for “Sunlands Technology Group.” Participants will be required to state their name and company upon entering the call.

 

A live webcast and archive of the conference call will be available on the Investor Relations section of Sunlands’ website at http://www.sunlands.investorroom.com/.

 

A replay of the conference call will be available 1 hour after the end of the conference call until April 3, 2020.

 

International:  1-412-317-0088
US toll free: 1-877-344-7529
Canada toll free: 855-669-9658
Replay access code: 10140418

 

About Sunlands

 

Sunlands Technology Group (NYSE: STG) (“Sunlands” or the “Company”), formerly known as Sunlands Online Education Group, is the leader in China's online post-secondary and

 

 7

 

professional education. With a one to many, live streaming platform, Sunlands offers various degree and diploma-oriented post-secondary courses as well as online professional courses and educational content, to help students prepare for professional certification exams and attain professional skills. Students can access its services either through PC or mobile applications. The Company's online platform cultivates a personalized, interactive learning environment by featuring a virtual learning community and a vast library of educational content offerings that adapt to the learning habits of its students. Sunlands offers a unique approach to education research and development that organizes subject content into Learning Outcome Trees, the Company's proprietary knowledge management system. Sunlands has a deep understanding of the educational needs of its prospective students and offers solutions that help them achieve their goals.

 

About Non-GAAP Financial Measures

 

We use gross billings and EBITDA, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes.

 

We define gross billings for a specific period as the total amount of cash received for the sale of course packages, net of the total amount of refunds paid in such period. Our management uses gross billings as a performance measurement because we generally bill our students for the entire course tuition at the time of sale of our course packages and recognize revenue proportionally over a period. EBITDA is defined as net loss excluding depreciation and amortization, interest expense, interest income, and income tax expenses. We believe that gross billings and EBITDA provide valuable insight into the sales of our course packages and the performance of our business.

 

These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their most directly comparable financial measure prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures. As gross billings and EBITDA have material limitations as an analytical metric and may not be

 

 8

 

calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider gross billings and EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

 

Safe Harbor Statement

 

This press release contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Sunlands may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Sunlands' beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Sunlands' goals and strategies; its expectations regarding demand for and market acceptance of its brand and services; its ability to retain and increase student enrollments; its ability to offer new courses and educational content; its ability to improve teaching quality and students’ learning results; its ability to improve sales and marketing efficiency and effectiveness; its ability to engage, train and retain new faculty members; its future business development, results of operations and financial condition; its ability to maintain and improve technology infrastructure necessary to operate its business; competition in the online education industry in China; relevant government policies and regulations relating to Sunlands’ corporate structure, business and industry; and general economic and business condition in China Further information regarding these and other risks, uncertainties or factors is included in the Sunlands' filings with the U.S. Securities and Exchange Commission. All information provided in this

 

 9

 

press release is current as of the date of the press release, and Sunlands does not undertake any obligation to update such information, except as required under applicable law.

 

For investor and media enquiries, please contact:

 

Yingying Liu 

IR Director 

Tel: +86 182 5691 2232 

Email: ir@sunlands.com  

 

The Piacente Group, Inc. 

Brandi Piacente 

Tel: +1-212-481-2050 

Email: sunlands@tpg-ir.com

 

Ross Warner 

Tel: +86-10-6508-0677 

Email: sunlands@tpg-ir.com 

 

SOURCE: Sunlands Technology Group

 

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except for share and per share data, or otherwise noted)

 

   As of December 31,  As of December 31,
   2018  2019
   RMB  RMB  US$
ASSETS         
Current assets         
     Cash and cash equivalents  1,248,810  1,402,226  201,417
     Short-term investments  1,028,564  217,640  31,262
     Prepaid expenses and other current assets  124,908  180,881  25,982
     Deferred costs, current  180,657  243,447  34,969
Total current assets  2,582,939  2,044,194  293,630
Non-current assets         
     Property and equipment, net  559,511  545,675  78,381
     Intangible assets, net  1,369  1,176  169
     Right-of-use assets  -  598,991  86,040
     Deferred costs, non-current  146,610  205,488  29,517
     Long-term investments  30,009  40,026  5,749
     Deferred tax assets  -  85,513  12,283
     Other non-current assets  418,700  447,639  64,299
Total non-current assets  1,156,199  1,924,508  276,438
TOTAL ASSETS  3,739,138  3,968,702  570,068
          
LIABILITIES AND SHAREHOLDERS’ DEFICIT         
          
LIABILITIES         
Current liabilities         
Accrued expenses and other current liabilities (including accrued expenses         
        and other current liabilities of the consolidated VIEs without recourse to         
        Sunlands Technology Group of RMB241,204 and RMB209,727 as of         
        December 31, 2018 and December 31, 2019, respectively)  455,284  435,225  62,516
Deferred revenue, current (including deferred revenue, current of the consolidated VIEs         
        without recourse to Sunlands Technology Group of RMB1,765,085 and         
        RMB1,162,938 as of December 31, 2018 and  December 31, 2019, respectively)  1,765,085  1,670,076  239,891
Lease liabilities, current (including lease liabilities, current of the consolidated VIEs         
        without recourse to Sunlands Technology Group of nil and         
        RMB22,659 as of December 31, 2018 and December 31, 2019, respectively)  -  40,236  5,780
Payables to acquire buildings (including payables to acquire buildings of the         
        consolidated VIEs without recourse to Sunlands Technology Group of nil and nil         
        as of December 31, 2018, and December 31, 2019, respectively)  61,540  61,540  8,840
Long-term debt, current (including long-term debt, current of the consolidated VIEs         
        without recourse to Sunlands Technology Group of  nil and nil as of December         
         31, 2018 and December 31, 2019, respectively)  32,500  32,500  4,668
Total current liabilities  2,314,409  2,239,577  321,695
          

 

 

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS-continued

(Amounts in thousands, except for share and per share data, or otherwise noted)

 

   As of December 31,  As of December 31,
   2018  2019
   RMB  RMB  US$
Non-current liabilities         
Deferred revenue, non-current (including deferred revenue, non-current of the         
consolidated VIEs without recourse to Sunlands Technology Group of         
RMB1,520,940 and RMB1,096,482 as of December 31, 2018 and December 31,         
2019, respectively)  1,520,940  1,558,694  223,892
Lease liabilities, non-current (including lease liabilities, non-current of the         
consolidated VIEs without recourse to Sunlands Technology Group of         
nil and RMB358,467 as of December 31, 2018 and December 31,         
2019, respectively)  -  616,246  88,518
    Deferred tax liabilities(including deferred tax liabilities of the consolidated         
VIEs without recourse to Sunlands Technology Group of nil and RMB4,415 as of         
December 31, 2018 and December 31, 2019, respectively)  -  87,954  12,634
Other non-current liabilities (including other non-current liabilities of the consolidated         
VIEs without recourse to Sunlands Technology Group of RMB135 and RMB135 as of         
December 31, 2018 and December 31, 2019, respectively)  17,147  11,469  1,647
Long-term debt, non-current (including long-term debt, non-current of the consolidated         
VIEs without recourse to Sunlands Technology Group of nil and nil as of         
December 31, 2018 and December 31, 2019, respectively)  225,625  193,125  27,741
Total non-current liabilities  1,763,712  2,467,488  354,432
TOTAL LIABILITIES  4,078,121  4,707,065  676,127
          
SHAREHOLDERS’ DEFICIT         
    Class A ordinary shares (par value of US$0.00005, 796,062,195 shares         
authorized; 1,818,383 and 1,830,183 shares issued as of December 31, 2018         
and December 31, 2019, respectively; 1,773,301 and 1,728,006 shares         
outstanding as of December 31, 2018 and December 31, 2019, respectively)  1  1  -
    Class B ordinary shares (par value of US$0.00005, 826,389 shares         
authorized; 826,389 and 826,389 shares issued and outstanding         
as of December 31, 2018 and December 31, 2019, respectively)  -  -  -
Class C ordinary shares (par value of US$0.00005, 203,111,416 shares         
authorized; 4,265,286 and 4,258,686 shares issued and outstanding         
as of December 31, 2018 and December 31, 2019, respectively)  1  1  -
    Treasury stock  -  -  -
    Additional paid-in capital  2,391,822  2,363,999  339,567
    Accumulated deficit  (2,849,770)  (3,244,587)  (466,056)
    Accumulated other comprehensive income  118,827  142,435  20,460
Total Sunlands Technology Group shareholders’ deficit  (339,119)  (738,151)  (106,029)
Noncontrolling interest  136  (212)  (30)
TOTAL SHAREHOLDERS’ DEFICIT  (338,983)  (738,363)  (106,059)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT  3,739,138  3,968,702  570,068
          

 

 

 

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except for share and per share data, or otherwise noted)
          
   For the Three Months Ended December 31,
   2018  2019
   RMB  RMB  US$
Net revenues  568,799  549,722  78,963
Cost of revenues  (78,515)  (101,512)  (14,581)
Gross profit  490,284  448,210  64,382
          
Operating expenses         
     Sales and marketing expenses  (530,100)  (476,090)  (68,386)
     Product development expenses  (26,956)  (24,295)  (3,490)
     General and administrative expenses  (142,613)  (98,603)  (14,163)
Total operating expenses  (699,669)  (598,988)  (86,039)
Loss from operations  (209,385)  (150,778)  (21,657)
Interest income  23,421  9,203  1,320
Interest expense  (2,171)  (3,365)  (483)
Other income, net  1,179  6,894  990
Loss before income tax expenses  (186,956)  (138,046)  (19,830)
Income tax expenses  -  (2,440)  (350)
Gain from equity method investments  3,288  949  136
Net loss  (183,668)  (139,537)  (20,044)
          
Less: Net loss attributable to noncontrolling interest  (1)  (74)  (11)
          
Net loss attributable to Sunlands Technology Group  (183,667)  (139,463)  (20,033)
Net loss per share attributable to ordinary shareholders of         
 Sunlands Technology Group:         
     Basic and diluted  (26.68)  (20.46)  (2.94)
Weighted average shares used in calculating net loss         
    per ordinary share:         
     Basic and diluted  6,883,286  6,815,041  6,815,041
          

  

 

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands)
          
   For the Three Months Ended December 31,
   2018  2019
   RMB  RMB  US$
Net loss  (183,668)  (139,537)  (20,044)
Other comprehensive income/(loss), net of tax effect of nil:         
Change in cumulative foreign currency translation adjustments  1,820  (33,578)  (4,823)
Total comprehensive loss  (181,848)  (173,115)  (24,867)
Less: comprehensive loss attributable to noncontrolling
         
interest  (1)  (74)  (11)
Comprehensive loss attributable to Sunlands Technology         
Group  (181,847)  (173,041)  (24,856)

 

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SUNLANDS TECHNOLOGY GROUP

 

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

 

(Amounts in thousands)

 

   For the Three Months Ended December 31,
   2018  2019
   RMB  RMB
Net revenues  568,799  549,722
Less: other revenues  (697)  (11,137)
Add: tax and surcharges  21,879  35,746
Add: ending deferred revenue  3,286,025  3,228,770
Add: ending refund liability  -  128,478
Less: beginning deferred revenue  (3,116,225)  (3,214,564)
Less: beginning refund liability  -  (75,046)
Gross billings (non-GAAP)  759,781  641,969
       
Net loss  (183,668)  (139,537)
Add: income tax expenses  -  2,440
depreciation and amortization  8,013  9,343
interest expense  2,171  3,365
Less: interest income  (23,421)  (9,203)
EBITDA (non-GAAP)  (196,905)  (133,592)

  

 

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(Amounts in thousands, except for share and per share data, or otherwise noted)
          
   For the Years Ended December 31,
   2018  2019
   RMB  RMB  US$
Net revenues  1,973,985  2,193,902  315,134
Cost of revenues  (330,376)  (396,316)  (56,927)
Gross profit  1,643,609  1,797,586  258,207
          
Operating expenses         
     Sales and marketing expenses  (2,152,830)  (1,792,285)  (257,446)
     Product development expenses  (76,022)  (101,717)  (14,611)
     General and administrative expenses  (443,691)  (363,307)  (52,186)
Total operating expenses  (2,672,543)  (2,257,309)  (324,243)
Loss from operations  (1,028,934)  (459,723)  (66,036)
Interest income  70,355  60,166  8,642
Interest expense  (2,171)  (14,312)  (2,056)
Other income, net  32,090  21,280  3,057
Loss before income tax expenses  (928,660)  (392,589)  (56,393)
Income tax expenses  -  (2,440)  (350)
Gain/(loss) from equity method investments  1,710  (136)  (20)
Net loss  (926,950)  (395,165)  (56,763)
          
Less: Net income/(loss) attributable to noncontrolling interest  72  (348)  (50)
          
Net loss attributable to Sunlands Technology Group  (927,022)  (394,817)  (56,713)
Net loss per share attributable to ordinary shareholders of         
 Sunlands Technology Group:         
     Basic and diluted  (147.27)  (57.81)  (8.30)
Weighted average shares used in calculating net loss         
    per ordinary share:         
     Basic and diluted  6,294,870  6,830,058  6,830,058
          

  

 

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands)
          
   For the Years Ended December 31,
   2018  2019
   RMB  RMB  US$
Net loss  (926,950)  (395,165)  (56,763)
Other comprehensive income, net of tax effect of nil:         
Change in cumulative foreign currency translation adjustments  127,586  23,608  3,391
Total comprehensive loss  (799,364)  (371,557)  (53,372)
Less: comprehensive income/(loss) attributable to noncontrolling
         
interest  72  (348)  (50)
Comprehensive loss attributable to Sunlands Technology         
Group  (799,436)  (371,209)  (53,322)

  

 

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SUNLANDS TECHNOLOGY GROUP 

RECONCILIATION OF GAAP AND NON-GAAP RESULTS 

(Amounts in thousands)

 

   For the Years Ended December 31,
   2018  2019
   RMB  RMB
Net revenues  1,973,985  2,193,902
Less: other revenues  (6,961)  (23,481)
Add: tax and surcharges  71,779  123,472
Add: ending deferred revenue  3,286,025  3,228,770
Add: ending refund liability  -  128,478
Less: beginning deferred revenue  (2,110,428)  (3,286,025)
Less: beginning refund liability  -  (6,625)
Gross billings (non-GAAP)  3,214,400  2,358,491
       
       
       
Net loss  (926,950)  (395,165)
Add: income tax expenses    2,440
depreciation and amortization  25,778  37,223
interest expense  2,171  14,312
Less: interest income  (70,355)  (60,166)
EBITDA (non-GAAP)  (969,356)  (401,356)

  

 

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