China New Higher Education Group Has a Steady Growth in the 2017 Annual Results

With the Simultaneous Organic and Inorganic Growth, the Continuing Operations Profit Has an Increase of 111.1%

With the Completion of the Strategic Layout in 7 Provinces and Regions across the Country, the Number of Students Exceeded 76,000

Results Highlights

nIn 2017, the Group has 5 self-constructed and invested higher education institutions, the total number of student enrollment exceeded 58,000. As of January 2018, the Group announced that it would invested in Henan School. Upon completion of the transaction, the total number of student enrollment will exceed 76,000.

nAs of January 2018, the merger and acquisition of Xinjiang and Henan School were completed and the strategic layout in 7 provinces and regions was completed.

nIn terms of employment rate, the Group is a leading private higher education group in China, maintaining an employment rate of more than 98% in the past 3 years.

Financial and Operating Highlights

For the year ended 31 December 2017:

nComprehensive income amounted to RMB542.8 million, representing a year-on-year increase of 35.1%

nRecorded a profit from continuing operations of RMB233.3 million, representing a year-on-year increase of 111.1%

nGross profit margin and profit margin from continuing operations increased by 54.9%, and 56.3% respectively

nIt is proposed to declare a final dividend of RMB0.025 per share, together with the interim dividend of RMB0.021 per share, an annual dividend of RMB0.046 per share was declared.

(28 February 2018 – Hong Kong) China New Higher Education Group (the “New Higher Education Group”, together with its subsidiaries, the “Group”, stock code: 2001.HK) was pleased to announce the audited consolidated annual results for the twelve months ended 31 December 2017 (the “Review Period”).

During the Review Period, the comprehensive income (income and other revenue) of the Group amounted to RMB542.8 million, representing a year-on-year increase of 35.1%. It recorded a profit from continuing operations of RMB233.3 million, representing a year-on-year increase of 111.1%, which was mainly benefited from the corresponding adjustment of 2017 freshman tuition fees of certain majors of Guizhou School, as well as the increase in the number of students in Yunnan and Guizhou School. As a result of the substantial increase in management service fees to Northeast School and the first collection of management service fee from Central China School, other income and gains of the Group recorded a year-on-year increase of 110.1% to RMB127.8 million, reflecting the simultaneous growth of the Group's organic and inorganic growth. Gross profit margin of the Group increased to 54.9% from 48.0% for the same period of last year, while the net profit from continuing operations amounted to RMB233.3 million represented an increase of 111.1% as compared to RMB110.5 million for the year ended 31 December 2016.

For the period ended 31 December 2017, the New Higher Education Group operates and invests in five higher education institutions in the PRC, including the Yunnan School and Guizhou School found by the Group, as well as the Northeast School, Central China School and Xinjiang School invested by Group. The total number of student enrollment in the four higher education institutions was 58,036. On 8 January 2018, the Group announced that it would invested in Henan School. Upon completion of the transaction, the total number of student enrollment will exceed 76,000.

During the Review Period, the education department of Yunnan Province has approved to increase the scale of student enrollment of Yunnan School to 44,000 during the “13th Five-Year Plan” period. The Group is a leading private higher education group in China in terms of employment rate.

New Higher Education Group continued its efforts to expand its school network and increase its market penetration, so as to increase its market share in the private higher education sector in the PRC. On 27 December 2017, Beijing Daai Consulting, a wholly owned subsidiary of Yun Ai Group, agreed to acquire an aggregate of 56% equity interest in Xinjiang School Sponsor. The Group planned a layout in the core area of the Silk Road Economic Zone, and made a breakthrough in merger and acquisition. In addition, on 8 January, the Group announced the acquisition of 55% school sponsor interest of Henan School. The student enrollment of the school for the academic year of 2017/2018 was 18,243. New Higher Education Group focusing on Central China with the purpose of acceleration of national layout, and expanding geographic coverage of schools to seven provinces and regions.

Looking forward, in addition to investment, merger and acquisition, New Higher Education Group will establish its own schools and continue to increase the student enrollments at existing schools. The Group intends to carry out its merger and acquisition in western, central and northeastern China regions, where the gross enrollment rates are lower than national level and exists growth potential. The Group also plans to leverage its replicable business model to optimize the operations of the acquired or invested schools and rapidly replicate the value-added service revenue model of Yunnan School to increase financial returns. At the same time, the Group pays great attention to internal construction and will further improve the team building system with an emphasis on pushing ahead with the work in relation to recruitment and training of the teams of management cadres, teachers and students management. The Group also plans to continue to provide teachers with competitive remuneration packages to attract talented people.

Mr. Li Xiaoxuan, the Chairman of the board of directors of New Higher Education Group, stated that: “The Group will adhere to the mission of “Promote China's Educational Development with Innovation”, following the education principle of “Nurture the Growth of Our Students and Help Students to Become The Best They Can Be”, practicing the educational philosophy of “Sincere and Upright Graduates, Teach Students in Accordance with Their Aptitude, Apply What One Has Learned”. The Group actively implement the dual-wheel drive of “Talents + Capital”, to promote four strategies of centralization, digitization, internationalization and branding, and strive to become a leader in higher education in applied sciences in China and become the most respected first-class education group, thereby enhancing the Group's overall strength and market share in the industry and creating greater value and satisfaction returns for shareholders”.

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About China New Higher Education Group Limited:

China New Higher Education is a leading private formal higher education group in China with nearly 20 years of education industry experience, specializing in providing higher education which focuses on applied sciences. The Group endeavors to help each student maximize his or her potential and live his or her life to the fullest. The Group’s fundamental educational philosophy is mainly composed of two integral parts: (i) to nurture the growth of students, and provide education tailored to each student’s individual needs and circumstances; and (ii) to equip students with practical and readily applicable skills that meet market demand. The Group currently operates and invests in four schools, namely the Yunnan School, the Guizhou School, the Central School and the Northeastern School in Southwestern, Central and Northeastern China, and started the construction of the Northwest School in the second half of 2017.

The Group provides high quality higher education in a wide selection of fields in applied sciences. Its courses are designed to equip students with practical and readily applicable skills, helping to prepare them for job market. It achieved industry-leading graduate employment rates, with over 98% of its graduates from 2013 to 2015 by the end of their year of graduation, according to Frost & Sullivan. Furthermore, the Group is one of the fast-growing higher education groups focusing on applied sciences in China in terms of the number of students enrolled at the end of the past three school years. For the year ended 31 December 2017, the overall student enrolment increased from 46,460 in 2016/2017 academic year to 58,036 in 2017/2018 academic year. On 8 January 2018, the Group announced that will invest in Henan University. Upon completion of the transaction, the total number of students will exceed 76,000. The Group has been included as a constituent stock of the Hang Seng Composite Small Cap Index and the Hang Seng Consumer Goods & Services Index in the Hang Seng Composite Index Series in August 2017, has been included as a constituent stock of the MSCI China Small Cap Index in November 2017, and will be included as a constituent of certain indexes of Hang Seng Stock Connect Hong Kong in March 2018.