SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2018

20. SEGMENT INFORMATION

The Group offers a wide range of educational and career enhancement services and products focusing on improving educational opportunities for primary and advanced degree school students and employment opportunities for university graduates.

The Group’s chief operating decision maker (“CODM”) has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the Group. Based on management’s assessment, the Group has determined that it has four operating segments which are Tutoring, K-12 Schools, Career Enhancement and Others. These four operating segments are also identified as reportable segments. The reportable segments of tutoring and K-12 schools are grouped under the “Better Schools” division because the segments offer programs and education services using a standards-based curriculum that enables students to improve their academic results and educational opportunities. The reportable segments of career enhancement was classified under the “Better Jobs” division because the segments offer services and programs that facilitate post-secondary students to obtain more attractive employment opportunities. The reportable segment of Others represents the intellectualized operational services provided, and was classified under the “Others” division. This segment provide intellectualized operational services to corporate clients, colleges and universities, which is to design, purchase, modify and integrate electronic equipment and devices, and develop mobile APP for end users to utilize office facilities, manage resources and administrative matters according to our clients’ office or teaching space, human resource deployments and office/classroom administration requirements.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment’s revenues, cost of revenues, gross profit, operating expenses, other income (expense), (loss) income before income tax and non-controlling interests and total assets as follows.

For the year ended December 31, 2016

(RMB in thousands)	Better School									Better Job
	Tutoring			K-12			Subtotal			Career Enhancement			Consolidated
	RMB			RMB			RMB			RMB			RMB

Net Revenues		47,985			222,592			270,577			141,439			412,016
Cost of revenues		(33,465	)		(137,833	)		(171,298	)		(67,444	)		(238,742	)
GROSS PROFIT		14,520			84,759			99,279			73,995			173,274

OPERATING EXPENSES
Selling and marketing		(5,516	)		(1,065	)		(6,581	)		(30,810	)		(37,391	)
General and administrative		(21,929	)		(42,205	)		(64,134	)		(34,023	)		(98,157	)
Research and development		(1,445	)		-			(1,445	)		(924	)		(2,369	)
Impairment loss		(21,779	)		-			(21,779	)		(623	)		(22,402	)
Unallocated corporate expenses		-			-			-			-			(56,986	)
Total operating expenses		(50,669	)		(43,270	)		(93,939	)		(66,380	)		(217,305	)

OPERATING (LOSS) INCOME		(36,149	)		41,489			5,340			7,615			(44,031	)

OTHER INCOME (EXPENSE)
Interest income		106			106			212			186			398
Foreign exchange gain, net		-			-			-			12			12
Other (loss) income, net		(2,514	)		195			(2,319	)		(1,714	)		(4,033	)
Gain on sale of investment available for sale		-			2,464			2,464			138			2,602
Unallocated corporate other income		-			-			-			-			13,945
Total other (expenses) income		(2,408	)		2,765			357			(1,378	)		12,924

(LOSS) INCOME BEFORE INCOME TAX AND NON-CONTROLLING INTERESTS		(38,557	)		44,254			5,697			6,237			(31,107	)

Segment assets		118,083			363,317			481,400			187,362			668,762
Unallocated corporate assets		-			-			-			-			284,261
TOTAL ASSETS		118,083			363,317			481,400			187,362			953,023

For the year ended December 31, 2017

(RMB in thousands)	Better School									Better Job
	Tutoring			K-12			Subtotal			Career Enhancement			Others			Consolidated
	RMB			RMB			RMB			RMB			RMB

Net Revenues		55,371			232,433			287,804			144,950			11,170			443,924
Cost of revenues		(26,426	)		(152,509	)		(178,935	)		(70,465	)		(6,995	)		(256,395	)
GROSS PROFIT		28,945			79,924			108,869			74,485			4,175			187,529

OPERATING EXPENSES
Selling and marketing		(4,220	)		(1,356	)		(5,576	)		(26,656	)		-			(32,232	)
General and administrative		(16,411	)		(40,681	)		(57,092	)		(34,466	)		(12	)		(91,570	)
Research and development		(241	)		-			(241	)		(407	)		-			(648	)
Unallocated corporate expenses		-			-			-			-			-			(60,774	)
Total operating expenses		(20,872	)		(42,037	)		(62,909	)		(61,529	)		(12	)		(185,224	)

OPERATING INCOME		8,073			37,887			45,960			12,956			4,163			2,305

OTHER INCOME (EXPENSE)
Interest income		252			804			1,056			171			-			1,227
Foreign exchange gain, net		-			-			-			47			-			47
Gain on disposal of subsidiaries		4,540			-			4,540			-			-			4,540
Other income (loss), net		10,402			1,025			11,427			(4,348	)		-			7,079
Gain on sale of investment available for sale		-			5,594			5,594			1,958			-			7,552
Unallocated corporate other income		-			-			-			-			-			32,789
Total other income (loss)		15,194			7,423			22,617			(2,172	)		-			53,234

INCOME BEFORE INCOME TAX AND NON-CONTROLLING INTERESTS		23,267			45,310			68,577			10,784			4,163			55,539

Segment assets		118,403			370,251			488,654			172,690			8,085			669,429
Unallocated corporate assets		-			-			-			-			-			307,991
TOTAL ASSETS		118,403			370,251			488,654			172,690			8,085			977,420

For the year ended December 31, 2018

(RMB in thousands)	Better School									Better Job
	Tutoring			K-12			Subtotal			Career Enhancement			Others			Consolidated
	RMB			RMB			RMB			RMB			RMB

Net Revenues		46,820			277,790			324,610			200,524			6,374			531,508
Cost of revenues		(27,770	)		(178,645	)		(206,415	)		(125,524	)		(6,204	)		(338,143	)
GROSS PROFIT		19,050			99,145			118,195			75,000			170			193,365

OPERATING EXPENSES
Selling and marketing		(332	)		(1,286	)		(1,618	)		(36,619	)		-			(38,237	)
General and administrative		9,482			(46,041	)		(36,559	)		(57,288	)		(638	)		(94,485	)
Research and development		-			-			-			(4	)		(483	)		(487	)
Unallocated corporate expenses		-			-			-			-			-			(44,773	)
Total operating expenses		9,150			(47,327	)		(38,177	)		(93,911	)		(1,121	)		(177,982	)

OPERATING INCOME (LOSS)		28,200			51,818			80,018			(18,911	)		(951	)		15,383

(RMB in thousands)	Better School						Better Job
	Tutoring		K-12		Subtotal		Career Enhancement			Others			Consolidated
	RMB		RMB		RMB		RMB			RMB

OTHER INCOME (EXPENSE)
Interest income		156		3,859		4,015		95			15			4,125
Foreign exchange gain (loss), net		111		-		111		94			(167	)		38
Other income, net		2,495		3,404		5,899		2,581			-			8,480
Gain from derecognition of liabilities		3,914		-		3,914		340			-			4,254
Gain from deregistration of subsidiaries		489		-		489		2,369			-			2,858
Gain on sale of investment available for sale		-		512		512		-			-			512
Unallocated corporate other income		-		-		-		-			-			12,788
Total other income (loss)		7,165		7,775		14,940		5,479			(152	)		33,055

INCOME (LOSS) BEFORE INCOME TAX AND NON-CONTROLLING INTERESTS		35,365		59,593		94,958		(13,432	)		(1,103	)		48,438

Segment assets		192,381		323,754		516,135		199,428			10,117			725,680
Unallocated corporate assets		-		-		-		-			-			184,539
TOTAL ASSETS		192,381		323,754		516,135		199,428			10,117			910,219

The Group primarily operates in the PRC and US. Substantially most of the Group’s long-lived assets are located in the PRC and US.