First High-School Education Shares Plunge On 1H Loss, Margin Pressure

First High-School Education Group Co Ltd FHS reported the first-half FY21 revenue growth of 24.8% year-on-year, to RMB231.9 million ($35.9 million).
Gross profit decreased 3.6% Y/Y to RMB62.3 million ($9.6 million). The gross margin contracted 790 basis points to 26.9% as the cost of revenues increased 39.9%.
The operating margin was 1.8%, and operating income for the quarter fell 88.7% to RMB4.1 million ($0.6 million).
The company held RMB130.9 million ($20.3 million) in cash and equivalents as of June 30, 2021.
The company registered a net loss of RMB(3.8) million or $(0.6) million compared to an income of RMB31.9 million in 1H FY20. It reported EPS of RMB(0.05).
"Facing tough regulatory environment, we remain committed to driving rapid growth with further operation expansion while improving utilization rate for our existing schools," said Chairman and CEO Shaowei Zhang.
Price action: FHS shares are trading lower by 23.9% at $2.96 on the last check Tuesday.