China Online Education GroupNYSE: COE
Phone: +86(10)8342-6262Web url: http://ir.51talk.com/Address: 6/F DESHI BUILDING SOUTH SHANGDI ST, HAIDIAN DISTRICT, BEIJING, CHINA
Sector :Education
Industry :Online Education
Sub-Industry :K-12

China Online Education Group (NYSE: COE), commonly known as 51Talk, provides online English language learning to K-12 students in China. The company offers affordable lessons with qualified foreign teachers and uses student and teacher feedback and data analytics to deliver a personalized learning experience.

In 2020, online learning has witnessed rapid growth fueled by Covid-19 pandemic lockdowns and school closures, leading many providers to offer discounted classes and launch marketing campaigns, resulting in an industry-wide boom. In China, where education and English language proficiency is associated with greater career opportunity, the pace of growth is particularly high.

By 2022, the online education market has been estimated by market research company TechNavio to reach 525 billion yuan – triple the size of 2017.

51Talk focuses on one-on-one lessons for K-12 students. This segment generates the majority of its revenue – at 87.6% in the third quarter of 2020. In addition, the company offers small-classes led by both Chinese and foreign teachers for K-12 students without any English-learning experience. And lastly, 51Talk generates about 5.5% of its revenue from adult one-on-one lessons with foreign teachers.

In a competitive market, 51Talk offers attractive prices, charging three-to-four times less than competing English language learning platforms such as VIPKid. For 25 minutes of a one-one-one learning session, the company charges about 40 yuan. 51Talk aims to engage its students by providing an educational experience “tailored for every need. 51Talk counted 338,000 active students in the third quarter, a 31% increase from the third quarter of 2019.

51Talk booked $79.3 million in revenue In the third quarter of 2020, a 32% year-over-year increase. Net income reached $4.7 million, or 20 cents per share, in contrast to losses in the previous year. Gross margin was 72.8%, compared with 71.6% for the third quarter of 2019. Gross billings were up 33% year-over-year to 728.4 million yuan ($107.3 million).

The number of teachers in the third quarter numbered 29,000. Valuing its teachers, 51Talk aims to provide competitive compensation and flexible working hours, as well as promote personal achievement. 51Talk’s teachers are well-trained, and are located in nations in which English is the official language: primarily in the Philippines, in addition to the United States and Canada.

Providing competitive prices, 51Talk seeks significant opportunity in lower-tier cities in China and is currently investing in research and development specifically for this market segment. The company is currently working on improving user friendliness of its platform for mobile-only users to bring lessons to those students who have no access to laptops or tablets. It has reported that its brand position in the market is recognized for effective education – 51Talk claims to deliver “much better results” and “greater improvement for students compared to other market players.” In addition, the company boasts to maintain high retention and referral rates, as well as “one of the highest renewal rates” in the market.

Set on increasing profitability and expanding in lower-tier cities, diversifying its class offerings, and outperforming its competitors, 51Talk is prepared and positioned for for long-term growth.

IR CONTACTS
In China:

China Online Education Group

+86 (10) 8342-6262

ir@51talk.com

In the United States:

The Piacente Group, Inc.

+1-212-481-2050

51talk@tpg-ir.com