China Education Group Holdings (HKSE:00839) Operating Income : HK$2,938 Mil (TTM As of Aug. 2023)

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What is China Education Group Holdings Operating Income?

China Education Group Holdings's Operating Income for the six months ended in Aug. 2023 was HK$1,335 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Aug. 2023 was HK$2,938 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. China Education Group Holdings's Operating Income for the six months ended in Aug. 2023 was HK$1,335 Mil. China Education Group Holdings's Revenue for the six months ended in Aug. 2023 was HK$3,067 Mil. Therefore, China Education Group Holdings's Operating Margin % for the quarter that ended in Aug. 2023 was 43.51%.

Good Sign:

China Education Group Holdings Ltd operating margin is expanding. Margin expansion is usually a good sign.

China Education Group Holdings's 5-Year average Growth Rate for Operating Margin % was 0.70% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. China Education Group Holdings's annualized ROC % for the quarter that ended in Aug. 2023 was 7.23%. China Education Group Holdings's annualized ROC (Joel Greenblatt) % for the quarter that ended in Aug. 2023 was 7.67%.

China Education Group Holdings Operating Income Historical Data

The historical data trend for China Education Group Holdings's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

China Education Group Holdings Operating Income Chart

China Education Group Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Aug19

Aug20

Aug21

Aug22

Aug23

Operating Income

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884.08

1,350.52

2,072.99

2,439.09

2,691.69

China Education Group Holdings Semi-Annual Data
	Dec14	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Feb19	Aug19	Feb20	Aug20	Feb21	Aug21	Feb22	Aug22	Feb23	Aug23	Feb24
Operating Income	Get a 7-Day Free Trial													1,282.33	1,235.70	1,442.50	1,334.51	1,603.83

China Education Group Holdings Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Aug. 2023 adds up the semi-annually data reported by the company within the most recent 12 months, which was HK$2,938 Mil.

China Education Group Holdings (HKSE:00839) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

China Education Group Holdings's annualized ROC % for the quarter that ended in Aug. 2023 is calculated as:

	ROC % (Q: Aug. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Feb. 2023 )	+	Invested Capital (Q: Aug. 2023 ))	/ count )
=	2669.014 * ( 1 - -2.64% )	/	( (38443.674	+	37353.238)	/ 2 )
=	2739.4759696	/	37898.456
=	7.23 %

where

	Invested Capital		(Q: Feb. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	40015.849	-	3078.937	-	( 6670.838	-	max(0, 9477.8	-	7971.038	+	6670.838	))
=	38443.674

	Invested Capital		(Q: Aug. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	38603.528	-	2609.63	-	( 6205.025	-	max(0, 8888.075	-	7528.735	+	6205.025	))
=	37353.238

Note: The Operating Income data used here is two times the semi-annual (Aug. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

China Education Group Holdings's annualized ROC (Joel Greenblatt) % for the quarter that ended in Aug. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Aug. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Feb. 2023		Q: Aug. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	1664.894	/	( ( (21642.068 + max(-5984.589, 0))	+	(21799.106 + max(-6310.835, 0)) )	/	2 )
=	1664.894	/	( ( 21642.068	+	21799.106 )	/	2 )
=	1664.894	/	21720.587
=	7.67 %

where Working Capital is:

	Working Capital		(Q: Feb. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(58.526	+	0	+	736.742)	-	(3078.937	+	0	+	3700.92)
=	-5984.589

	Working Capital		(Q: Aug. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(33.471	+	0	+	804.375)	-	(2609.63	+	0	+	4539.051)
=	-6310.835

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Aug. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

China Education Group Holdings's Operating Margin % for the quarter that ended in Aug. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Aug. 2023 )	/	Revenue (Q: Aug. 2023 )
	=	1334.507	/	3067.422
	=	43.51 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

China Education Group Holdings Operating Income Related Terms

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China Education Group Holdings (HKSE:00839) Business Description

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GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » China Education Group Holdings Ltd (HKSE:00839) » Definitions » Operating Income

Comparable Companies

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CEGHF:USA C3W:Germany

Address

18 Harbour Road, Suite 6703–04, 67th Floor, Central Plaza, Wanchai, Hong Kong, HKG

Website

http://www.chinaeducation.hk

China Education Group Holdings Ltd is a leading ultra-large-scale private education group in China with 30 years of experience in higher education operations. CEG's schools offer both higher vocational education and secondary vocational education. The school network spans domestic China and overseas. CEG also offers continuing education to full-time working adults. The group's total enrolled full-time students in China expanded more than 3 times over the last six years to about 248,000 as of August 2023. The rapid growth is primarily attributable to school acquisitions. CEG currently operates 14 schools, up from only 3 in 2017.

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