(Yicai Global) Dec. 18 -- China Online Education Group, also known as 51Talk, gained USD441 billion in operating revenue in the third quarter, up 28 percent from one year earlier, yet it still lost USD13 million.
Beijing-based 51Talk released its third-quarter financial report yesterday. Cash income from one-on-one lessons with Philippine teachers to the kindergarten-grade 12 mass-market rose 66 percent over the same period last year, while its gross profit margin was 64 percent. K-12 students contributed 87 percent to its cash income, and the contribution of non-first-tier cities also continued up.
Formed in 2011, 51Talk attracts consumers with its model of 'learn English online via one-on-one lessons with foreign teachers.' The firm listed in the US in June 2016, thus becoming Chinese's first online education company to go public in America. It has however run in the red in recent years. Its net loss was CNY515 million (USD75 million) in 2016 and CNY581 million last year. It shed CNY113 million and CNY73 million in the first and second quarters, respectively.
The firm's high marketing expenses, cruel competition from implacable rivals New Oriental Education & Technology Group and Tutor ABC, a small share of the K-12 mass-market and condemnation for hiring Philippine teachers have stunted the firm's further growth and profits, analysts explained.
Chief Financial Officer Lai Youming will retire on Jan. 1 next year and be succeeded by Co-Chief Financial Officer Xu Wei, the firm announced in its financial report.
51Talk's shares [NYSE:COE] closed at USD7.38 per share yesterday, down 7.75 percent.
Editor: Ben Armour