JH Education reports 10% profit decline amid campus expansion

JH Educational Technology Inc. announced its interim results for the six months ended June 30, 2025, with profit for the period decreasing by 10% to 305,311,000 yuan, compared to 340,998,000 yuan in the same period of 2024. Revenue, however, increased by 3% to 534,563,000 yuan, driven by growth in tuition and boarding fees. Cost of sales rose by 21% to 205,846,000 yuan, primarily due to increased staff, depreciation, and student activity expenses, leading to a 5% decrease in gross profit.

The company's net current assets saw a 24% decline to 1,052,181,000 yuan. This was largely influenced by a 326,700,000 yuan decrease attributed to the recognition of prepaid tuition and accommodation fees as revenue, and a 953,800,000 yuan decrease in cash and cash equivalents. Capital expenditures soared to 641,300,000 yuan from 84,000,000 yuan in 2024, mainly for land use rights acquisition and the construction of the new campus in Zhengzhou, Henan Province, which is projected to serve approximately 20,000 students.

Additionally, finance costs increased significantly to 915,000 yuan from 13,000 yuan, predominantly due to interest incurred on new bank borrowings of 598,000,000 yuan for the new campus construction. The company’s gearing ratio increased to 14% as of June 30, 2025, compared to nil in December 2024.