Investor Relations The Best e-learning Service Company

Transcription

1 Investor Relations 2007 The Best e-learning Service Company

2 What We Do Business Domain Educational System Business Structure Service Process Membership & Sales in On-line Market Growth Market Expansion & Entry Barrier Offline Education Market Size & Growth Population of Students Business Road Map Sales Structure & Ratio Performance & Projection Profit Summary Balance Sheet Summary

3 Leading IT based e-learning Service Company Technology Side High-density, Dynamic Society High broadband Internet penetration Digital streaming tech. Image recording & processing tech. Learning & grade management tech. First mover in e-learning Dominant market leader Megastudy High School Market Contents Side High zeal for education Huge private Education market Pool of the best lecturers Customer-oriented high quality contents Well-balanced On/Off network Kindergarten & Elementary School Middle School GPA Korean SAT Essay & Interview College/Adult Education Overseas Mbest (To be merged) Current Major Business

4 On-line Off-line Academic Institutes megastudy.net High School mbest.net 7 locations in Seoul Middle School Subsidiary megagosi.net Exams for civil service personnel passmeca.net Qualifying exams for certificates HeeSo Megastudy Off-line school for state exams Equity Holdings : 40.0% Date of Foundation : April, 2005 Sales in 2006 : 4,263 million won Net Loss in 2006 : 473 million won MegaPnP A publishing and printing company that produces materials for online lectures and publicity booklets of Megastudy Equity Holdings : 43.8% Date of Foundation : August, 2001 Sales in 2006 : 2,399 million won Net Profit in 2006 : 79 million won

5 < Education System > < Entrance Exam Factors Change> Primary Education K-6 OLD NEW Secondary Education Higher Education Middle School (7-9) High School (10-12) 12) Undergraduate & Graduate School Re-takers G P A K S A T University -Specific Exam Absolute Evaluation Remarks based Evaluation Relative Evaluation 9 th grade system - Essay & Interview style tests - Increase the weight Early Application Middle School Preparing for G.P.A Preceding Study for High School GPA Extra curricular activity University-specific exams KSAT (minimum requirement Regular Application GPA University-specific exams University for early application II) KSAT

6 Off-line Online Biz : Offline Biz : Complements the weakness of only online business On-line

7 Teachers in Megastudy & Mbest Off Subject line Korean 54 Mandatory English 54 1/3 K S Mathematics 54 A Social Studies 40 (11 subjects) T Optional Sciences 41 (8 subjects) Middle School Essay & Interview 64 2 nd Foreign Language 7 Megastudy 314 Mbest Megastudy & Mbest Off-line On-line Mbest On Line

8 High School Middle School Penetration 1 st grade 2 nd grade 3 rd grade Re-takers Total Elementary 1 st grade 2 nd grade 3 rd grade Others Middle School Total 200 Registered Members % Paid Subscribers Numbers Numbers % Numbers % , , (12) (109) 94 14% 24% 57% 37% 3.3% 4.9% 5.4% 4.5% <unit : thousand> (4) (9) 31 6% 10% 25% 35% 17% (915) Graduated Students Current Registered Members 1.3% 1.6% 1.6% 1.5% Online Sales Trend Online Sales Subscribers Paid Subscribers Middle School Market Sales per paid subscribers (unit : thousand won) Weight of Number of Term-Based Course Weight of Sales of Term-Based Course (billion won) (thousand) (thousand) Number of bought Lectures (thousand) Sales per paid subscriber (thousand won) Online sales (unit : million won) Subscribers (unit : thousand) Paid Subscribers (unit : thousand) % 0% , % 6% , , % 35% , , , % 56%

9 Paid Member Penetration in High School Market 30.0% 24.8% 25.0% 22.5% 20.0% 21.0% 20.0% High School 15.0% 10.0% 5.0% 0.0% 10.1% 9.9% 10.0% 8.4% 6.6% 3.1% 3.3% 4.0% 5.0% 5.8% 0.8% '2002 '2003 '2004 '2005 '2006 HS 1st HS 2st HS 3st Stable Growth Stage Online Market Offline Market Middle School Industrial Growth Curve Initial Stage Online Market Offline Mrket Mbest 1318 Class EduClub IwillPass : 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Paid Member Penetration in Middle School Market 0.2% 0.3% 0.2% 0.8% 0.6% 0.8% 1.1% 0.8% 1.0% 1.6% 1.6% 1.3% '2002 '2003 '2004 '2005 '2006 MS 1st MS 2st MS 3st

10 One stop learning place & high loyalty of customers Suggest a customized learning road map Provide advice on selecting lectures Steadfast Infrastructure & High Entry Barrier Provide best information about college entrance at the most optimum time (scoring service, college application assistance service, etc.) M-Zone : Entertainment & information T-Zone : communication with lecturers Cheer on students during examination Virtuous Cycle 5~6 times per year Popular off-line events

11 Kangnam Songpa Kangbuk Seocho Launch Product Customer Capacity/mo. 7/ / / /2004 Single subject class Combined class Re-takers general class Single subject class Combined class Re-takers general class Single subject class Combined class Re-takers general class Single subject class Combined class Re-takers general class High School students Re-takers Elementary & Middle school High School students Re-takers High School students Re-takers High School students Re-takers 6,000 (850) 2,000 (250) 12,000 (1,100) 4,000 (850) Daechi 12/2004 Essay-writing Combined class High School students 1,000 Noryangjin 12/2005 Single subject class Combined class High School students Re-takers 13,000 (600) Namyangju 12/2006 Re-takers general class (Boarding School) Re-takers 300 Single subject class specialize in one subject course Monthly Capacity for Single subject class Combined class general course of all subjects for high school students after regular school Re-takers general class general course of all subject run all day like a regular school graduates Monthly Capacity for Re-takers general class

12 (million w on) 3.00 (%) Korea's education expenses portion of per capita income is the highest among OECD nations. Education at a Glance - OECD Indicators 2005> 500 Elementary School W 10 t High School W 3.3 t Middle School W 5.6 t We estimate total private education market to be W19t in 2006, and college entrance prep market to be W3.3t 7.2 % of high school market 220bn won 2.0 % of Middle school market 100bn won Public Education Private Education % of Education Spending by households on total education and private education rose by 8.3% and 11.4% p.a respectively for past 10 years. The National Statistical Office Online Market Size Online % of Market '04 '05 '06 '07 '08 '09 '10 '04 '05 '06 '07 '08 '09 ' % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Online Market Size Online % of Market 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

13 Middle School Students <unit : thousand> Middle School 1 st Middle School 2 nd Middle School 3 rd High School Total 1,897 1,861 1,831 1,841 1,855 1,934 2,011 2,075 2,069 2,028 1,992 1,932 High School Students High School 1 st High School 2 nd High School 3 rd High School Total 1,399 1,324 1,260 1,220 1,224 1,232 1,260 1,285 1,358 1,411 1,463 1,447 In high school sector, we consider only academic schools of which almost all students try to enter universities and exclude the vocational high schools which takes about 30% of all high school students.

14 Expansion of existing market & entry into new market State/Qualifying exam U p w a r d (Adult) MEET/DEET/ Law School College transfer & English / Language B2B Existing Biz (high school) KSAT GPA (1 st and 2 nd year student expansion) Contents diversification Downward (Kindergarten, elementary, middle school ) Middle school Kindergarten & elementary school Overseas Entry into Chinese & Japanese markets

15 Sales Structure <unit : billon won> Lectures Online Materials Institutes Offline Others <unit : billon won> (E) Online Lectures Materials % 11% % 13% % 15% % 13% % 11% % 10% % 10% Offline 0.2 4% 1.6 8% % % % % % Sales Total % % % % % % %

16 <unit : billion won> (E) Revenue Online Lectures % % % % Online Materials % % % % Offline % % % % COGS Operating Expense Operating Profit OP margin 39% 35% 32% 34% Net Profit Net margin 29% 29% 26% 26% OP margin (E) Online Lectures Materials 50% 19% 48% 22% 49% 25% 47% 25% Offline 9% 16% 18% 19% R O E 32.6% 27.0% 25.7% 29.5%

17 <unit : billion won> Accumulative Q 3Q YoY 1~3Q 1~3Q YoY Revenue % % Online Lectures % % Materials % % Offline % % COGS % % Operating Expense % % Operating Profit % % OP margin(%) 43.1% 45.1% 36.0% 38.7% Net Profit % % Net margin(%) 30.9% 30.5% 28.8% 29.1%

18 <unit : billion won> Q 2007 Total Assets Current assets Non-Current assets Investment Assets Tangible Assets Intangible Assets Other Non Current Asset Total Liabilities Current Liabilities Non-Current Liabilities Total Shareholder s Equity Paid-in Capital Capital Surplus Retained Earnings Capital adjustment