Puxin Limited (NYSE:NEW) Q3 2019 Earnings Conference Call - Final Transcript
Nov 18, 2019 • 08:00 am ET
Good day and welcome to the Puxin Limited Third Quarter 2019 Earnings Conference Call and Webcast. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Claire. Please go ahead.
Thank you, operator. Hello, everyone, and thank you for joining Puxin's third quarter 2019 earnings conference call. The company's results were released earlier today and are available on the company's IR website at ir.pxjy.com.
On the call today are Mr. Yunlong Sha, the company's Founder, Chairman and Chief Executive Officer and Mr. Peng Wang, the Chief Financial Officer. Yunlong will give a brief overview of the company's business operations and highlights followed by Peng, who will go through the financials and guidance. They will both be available to answer your questions during the Q&A session that follows.
I will remind you that this call may contain forward-looking statements made under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties and factors is included in the company's filings with the US Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under the law.
With that, I will now turn the call over to Mr. Sha. Mr. Sha will give his remarks in Chinese and I will translate for him in English. Mr. Sha, please go ahead.
[Foreign Speech] Hello ladies and gentlemen, welcome to Puxin Limited earnings conference call for the third quarter of 2019.
[Foreign Speech] In the third quarter of 2019, Puxin Limited has achieved overall profitability for the first time. Net income reached RMB33.742 million compared to a net loss of RMB50.219 million. Gross profit margin was 50.3%, which had shown a steady increase, potentially making us on-track for continued profitability in the future. First, net revenues grew 48.7% year-over-year to RMB996 million, beating previous expectations. We have continued implementing our acquisition and integration growth strategy and successfully acquired eight schools. In addition, increase in student enrollment continues to be a key driver for our success. In the third quarter, Puxin student enrollment increased by 60.2%, reaching a total number of 871,896 enrollments.
[Foreign Speech] As we take a closer look at our business, the K-12 service line performed exceptionally well. Net revenues increased by 86.4% year-over-year. This can be attributed to both our acquisition and integration strategy while we have emphasized the acquisition of K-12 focus as well as excellent organic