On January 9th, Dane Education announced that it would change the Nasdaq stock code from "TEDU" to "TCTM", effective from January 10th, 2024 Eastern Time. On the first trading day after the stock code change, its stock price rose by 20.35%.
Peel off IT vocational education, "All in" children's programming
On December 26, 2023, Dane announced the signing of an equity transfer agreement to sell all equity in its adult vocational education business to a buyer consortium led by Dane Weishang Technology (Hainan) Co., Ltd.
The actual controller of Dane Technology (Hainan) Co., Ltd. is Han Lijuan, and Han Lijuan and the founder and chairman of Dane Company, Han Shaoyun, are concerted actors. That is to say, Danei Education signed an equity transfer agreement to sell its vocational education business to its affiliated companies. The transaction is expected to be completed in March 2024.
On January 2nd of this year, Dane announced that a special shareholders meeting would be held on February 20th to discuss and approve the change of the company's legal name from Tarena International, Inc. to TCTM Kids IT Education Inc. And stated in the announcement that the renaming will not affect any rights, operations, and financial condition of shareholders or the company.
Previously, Dane provided vocational education courses in both IT and non IT disciplines, providing students with practical skills to meet recruitment needs. In addition, Dane has also incubated the brand "Tongcheng Tongmei", which provides STEAM education for students aged 3 to 18, including computer coding and robot programming courses, aiming to encourage "from coding to learning". The divestment of vocational education business this time means that the listed company will further shift its focus to children's programming training business.
As of January 10th, Dane's stock code has been changed to "TCTM", which may have affected its stock price. Its stock price rose significantly in the late trading session, closing at $1.36, up 20.35% from the previous trading day.
From the data reflected in the previous financial report, it can be seen that the epidemic in children's programming business has become the absolute mainstay of Danone.
In the first half of 2023, Danei Education's revenue was 930 million yuan, a year-on-year decrease of 26.9%. The decrease in income is mainly due to a decrease in the number of students enrolled in the IT vocational education business, which is caused by the closure of some teaching centers with lower profitability. In addition, Dane suspended courses and services for almost the entire month of January, resulting in a decrease in revenue.
Compared to that, Dane's children's programming business "Tongcheng Tongmei" has performed outstandingly. During the reporting period, Tongcheng Tongmei's revenue increased month on month, accounting for 63.85% of the total revenue and achieving an operating profit of 25.333 million yuan.
In the second quarter of 2023, the total enrollment of Tongcheng Tongmei students was 177500, an increase of 0.6% compared to 176500 students in the same period of 2022. In the first half of 2023, the number of Tongcheng Tongmei centers decreased from 227 in the same period of 2022 to 215, and the number of students enrolled in a single center increased from 767 per center in the same period of 2022 to 822 per center. The revenue of a single center increased from 1.51 million yuan per center in the same period of 2022 to 1.61 million yuan per center.
Sun Ying, CEO of Danei Education Group, once said, "Making efforts in children's business is not just a single strategic decision made by a certain management team, but rather taking advantage of the situation."