For the third fiscal quarter ended May 31, 2023, Bosilo reported revenue of RMB586 million, an increase of 34% over the same period last year. Among them, the income of overseas schools contributed 222 million yuan, becoming the largest source of income.

After experiencing a series of shocks such as performance revision, privatization withdrawal, and executive changes, Bosilo's revenue has improved significantly in the last two quarters.
After the pain, Bosille gradually better?
Performance recovery
Throughout the financial report, Boshile has maintained a good momentum this fiscal year, but the loss problem is more prominent.
In the third fiscal quarter, Bosilo achieved revenue of 586 million yuan, up 34% from the same period last year. It is worth noting that since the beginning of this year, Bosille has maintained a good growth trend. In the first half of fiscal year 2023, Bosilo achieved revenue of 978 million yuan, an increase of 11.9%. In the first three quarters, Bosilo's revenue reached 1.564 billion yuan, an increase of 19.3% year-on-year.
According to the performance guidance disclosed in the earnings report, the entire 2023 fiscal year, Bosilo's revenue will be between 1.9 billion and 2 billion yuan, which is expected to show an increase of 10% to 15%, showing a positive growth expectation.
Bosilo's expenses have been kept under control to a certain extent. During the reporting period, its three expenses were 142 million yuan, an increase of 21.4% over 117 million yuan in the same period last year, and the growth rate was lower than the revenue growth rate. In the first three quarters, this expense growth rate of 8.8%, also slower than the growth rate of the first three quarters of revenue.
In the case of the ebb and flow, the gross profit level of Bosilo has increased significantly. For the third quarter, its gross profit was $193 million, up 42.6% from $135.4 million in the previous quarter. Gross margin increased to 32.9% from 30.9% in the same period of the previous fiscal year.
But the loss widened significantly because of a valuation allowance for deferred taxes on its overseas school business. In the third quarter, its net loss was 37.7 million yuan, compared with 7.1 million yuan in the previous quarter, 4.3 times larger than the same period last year.
Commenting on the performance, CEO Zhou Hongru said that Borschel has been making significant changes and implementing efficiency improvements to create a more cost-effective, coordinated and streamlined way of operating. It expressed confidence in its diversified business portfolio and the multi-faceted strategy it is implementing.
With reference to the semi-annual report data, the growth of Boshile's revenue in this quarter further confirms the trend of recovery, which may be a positive signal for Boshile. But this growth still seems to be far from the previous scale of revenue.
Lingering in labor pains
It is undeniable that Bosserole's performance in this fiscal year has still not been able to recover to the level before the transformation.
After the promulgation of the implementation regulations of the Civil Promotion Act, Bosilor lost control of its compulsory education schools and non-profit kindergartens, including 68 kindergartens and 23 bilingual and international schools. This segment of the business is a major component of revenue. In fiscal year 2021, this part of the discontinued business achieved revenue of 2.303 billion yuan, far exceeding the revenue of 1.402 billion yuan from the continuing business. However, the current revenue of 586 million yuan in a single quarter is still a big gap compared with the revenue of 1.054 billion yuan in fiscal year 2021.
In the process of business transformation, Bosilo has experienced a series of pains.
In March 2022, Borschel received a warning from the New York Stock Exchange that its share price level was below the minimum price requirement. The company then pulled its share price back above the compliance line to about $3 through a share merger.
On April 29, 2022, the company received a take-private offer from Yang Huiyan and Yang Meimei, the chairmen of the Board, at a purchase price of $0.83 /ADS. According to a rough calculation of the total share capital of 29.798 million, the total price of privatization is about 24.732 million US dollars, which is even less than the gross profit level of a quarter.
In November, the company, which is still in the process of being privatised, experienced a personnel upheaval. Chairman Yang Huiyan announced her resignation as Chairman of the Board and related positions on the Company's nominating Committee and Compensation Committee for personal reasons. He Junli, the executive vice chairman, was subsequently removed from his post. Mr. Zhou Hongru is called a director and Chairman of the Board.
Subsequently, privatization came to nothing, and on December 29, 2022, Boshile Education announced that the buyer group decided to withdraw the privatization proposal issued in April and give up privatizing Boshile.
Since the beginning of this year, Bosille has gradually returned to stability, but subject to the difficulties of its parent company Country Garden, Bosille has still not been recognized in the market. On August 8 this year, Bosilo's share price fell below $1 again, touching $0.81, creating a record low since its listing.
Now, its share price is back near $1, with a total market value of about $33 million, for Bosserole, the eligibility of a public company is once again facing challenges.
Can Bosserol return to glory?
"Buy buy buy" model dilemma
In the financial report, Zhou Chengru specifically mentioned the issue of assets and liabilities.
He said the company had made considerable efforts to optimise the performance of its diversified portfolio. He also noted that in July, Bose successfully paid off all its bank loans. For an educational institution, Boschler pays great attention to the state of its balance sheet.
In fact, Bosilo has been opening the "buy buy buy" mode for many years. In 2018, before the epidemic, Bosilo acquired 75% of the five chain kindergartens of Wuhan Xinqiao; In April of the same year, Bosilo acquired 80% equity of Wuhan Sanniu Education Development Co., LTD. In October, Bosilo offered 70.55 million yuan for a company that manages eight kindergartens in Shandong province. In December, Borschel acquired full ownership of Bournemouth School in the UK.
In 2019, Borschel acquired St Michael's School and Bosworth School in the UK for £38 million; In July, Borschel bought out CATS, the UK education group, for £150m. CATS has 10 international language schools in the United Kingdom, the United States and Canada. In addition, Bosler has acquired many institutions such as Eli English, Jiacheng Education, Fan Dixin International Education, DreambigCareer, Hangzhou Impression International Art Education, and Beiwei Development. Coupled with the acquisition of Hanlin College in May 2020, the pace of Bosille's "buy buy buy" has never stopped.
Even after the transformation of the business, Bose's mergers and acquisitions have not stopped. From 2020 to 2021, Bosille successively acquired 60% of the shares of Music Camp Education and 18% of the shares of Golden Ballet Dance. In its 2021 annual report following the divestment, Borschel said it is always looking for acquisition opportunities and intends to maintain acquisitions while growing organically, continuing to look for opportunities in overseas markets and complementary education services. "Our targets may cover a wide range of education, including independent schools, boarding schools, art colleges, pre-university education service providers, language training centres and other education-related service providers."
In September this year, DBC Career Dream, a subsidiary of Boser Education Group, announced the completion of the strategic acquisition of pre-employment education brand CareerBuddy. The company said the move aims to integrate the resources and market advantages of the two sides, further strengthen the tutor, curriculum and service system, and better provide job search guidance services for students.
Under the continuous mergers and acquisitions, the performance of Bosilo, especially the overseas business, has improved significantly. In the third fiscal quarter, its overseas school business revenue was 222 million yuan, an increase of 18.1% over the same period in 2021, a significant increase from 142 million yuan. The auxiliary education service business was 208 million yuan, an increase of 50.4% compared with 130 million yuan in the same period of 2021. In addition, the domestic kindergarten and K-12 operation service business revenue of 157 million yuan, an increase of 40.7%.
However, under the continuous mergers and acquisitions, the test of Bosilo is also continuing. As of May 31, 2023, the Company's cash and cash equivalents and restricted cash were RMB765 million, a decrease of RMB61 million from RMB826 million at the beginning of the period. In the same period last year, its cash indicator was 1.372 billion yuan.
Although there is a trend of stabilization and recovery in performance, the pressure of delisting still exists, the loss has expanded, and the cash has continued to decrease. Under this situation, Bosille is still struggling.