BTC Digital Ltd. Q2 FY2021 earnings call

• Transferred all offline courses to online and plan to reduce offline learning centers to one or two in most cities.
• Added low-cost foreign teachers and launched low-cost Philippine foreign teachers' courses.
• Provided diversified online courses for adult career development (e.g., marketing, management, etc.).
• Registered users for online courses increased 19% y-o-y to 1.9 million as of June 30, 2021.
• Junior ELT under Meten brand registered students increased 240.9% y-o-y as of June 30, 2021.
• Launched new languages (Japanese, Spanish, Korean) and new products across offline/online platforms.
• Opened Meten Junior Growth Centers in Beijing, Chongqing, Changsha, Nanchang, and Foshan.

For the second quarter of 2021, total revenue was RMB204.8 million (US$31.7 million), up 8.2% y-o-y. First half of 2021 revenue was RMB411.3 million (US$63.7 million), up 10.9% y-o-y. General adult ELT: second quarter 2021 revenue RMB79.3 million (US$12.3 million), up 38.3% y-o-y; first half 2021 RMB146.3 million (US$22.7 million), up 29.3% y-o-y. Overseas training services: second quarter 2021 RMB37 million (US$5.7 million), up 97.4% y-o-y; first half 2021 RMB76.9 million (US$11.9 million), up 87.5% y-o-y. Junior ELT: second quarter 2021 revenue RMB23.1 million (US$3.6 million) (down from RMB31.6 million in 2020), but Meten brand Junior ELT up 256.3% to RMB21.4 million (US$3.3 million). First half 2021 Junior ELT RMB48.3 million (US$7.5 million) (down from RMB55.2 million in 2020), Meten brand up 269.3% to RMB39.2 million (US$6.1 million). Online ELT: second quarter 2021 RMB60.9 million (US$9.4 million), down 23.1% y-o-y; first half 2021 RMB132.2 million (US$20.5 million), down 15.4% y-o-y. First half 2021 revenue from Japanese, Spanish, Korean language training services was RMB5.7 million (US$88 million).

• Expect to complete strategic transformation in the next quarter, upgrading to an online/offline workplace training organization.
• Intend to actively explore business opportunities in other industries such as quality-oriented education, medical aesthetics, and VR teaching products for institutions.

• Regulatory mandates led to suspension of Junior ELT business in Beijing, affecting ABC brand Junior ELT revenue.
• COVID-19 cases in China may pressure physical locations; company plans to handle uncertainties by focusing on online transformation and cost reduction.

Q: Due to China education reform, any concerns about core dividend?

A: Answered in Chinese (transcript mentions before COVID, had competitors, but post-pandemic no strong competitors; current situation addressed in Chinese).

Q: Recent COVID cases in China, pressure on physical locations and how to handle uncertainties?

A: Before COVID, led in adult English training; post-pandemic no strong competitors. Transferred offline to online, plan to reduce offline centers, add low-cost foreign teachers, launch Philippine courses to handle COVID uncertainties and promote business transformation.