GSX Techedu, an online K12 large-class after-school tutoring service provider in China, has announced a 2020 net loss of ¥1.39 billion (£153.9 million), compared to net income of ¥226.6 million reported for 2019.
Net revenue for the year was ¥7.12 billion, up 236.9% from ¥2.11 billion reported for 2019. However, ¥1.8 billion of last year’s revenue was spent on sales and marketing and ¥275 million on R&D, a much-increased amount which affected the bottom line.
GSX Techedu, which is under investigation by US regulators over allegations of fraud, in December raised $870 million from unidentified sources in a private share placement.
The Beijing-based company also announced its results for the fourth quarter of 2020. Its net loss for the period was ¥627 million, compared to net income of 174.5 million reported for Q4 2019. Revenue for the quarter was ¥2.21 billion, up from ¥935 million reported for the fourth quarter of 2019.
GSX Techedu founder, chairman and chief executive Larry Xiangdong Chen said: “Our quarterly net revenues hit an all-time high of ¥2.2 billion. We attribute such outstanding growth and upsized scale to our highly efficient operations, as demonstrated by our net operating cash inflow of ¥636.4 million in the fourth quarter. Moreover, full-year net operating cash flow continues to be positive.
“Despite the intense competition over the past year, we remained dedicated to maintaining our focused strategy, refining our online live large class business model and constantly improving our educational quality and services. In the meantime, we intend to continue investing extensively in technology research and development, building distinguished organisational capabilities, sticking to a sustainable and long-term philosophy, and executing an effective growth strategy on a lifetime value basis.
“We believe these commitments have enabled us to achieve excellent operational efficiency in 2020, and will empower us to create more value for our students, parents, teachers, investors and society.”
Date published: 9 March 2021