Hello, ladies and gentlemen. Thank you for standing by for the Four Seasons Education’s Third Quarter Fiscal Year 2019 Earnings Conference Call. [Operator Instructions] Today’s conference call is being recorded. I would now like to turn the conference over to Ms. Ellen Wang, Investors Relations Director for the company. Please go ahead, Ellen.

Hello, everyone, and welcome to the third quarter fiscal year 2019 earnings conference call of Four Seasons Education. The company’s results were issued via Newswire services earlier today and are posted online. You can download the earnings press release and sign up for the company’s e-mail distribution list by visiting the IR section of our website at ir.sijiedu.com. Mr. Peiqing Tian, our Chairman and the Chief Executive Officer, will start the call by providing an overview of the company and the performance highlights of the quarter with English interpretation. Mr. Yi Zuo, our Director and the Chief Financial Officer, will then provide details on the company’s financial results and the business outlook before opening the call for your questions. Before we continue, please note that today’s discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, as such the company’s results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company’s prospectus as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note the Four Seasons Education’s earnings press release and this conference call includes discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. Four Seasons Education press release contains reconciliations of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our CEO, Mr. Tian. Please go ahead.

[Foreign Language] Thank you, Ellen, and hello, everyone. Thank you for joining us for our third quarter fiscal year 2019 earnings conference call. [Foreign Language] Entering into the second half of fiscal 2019, we maintained our strategy of extending a greater variety of subjects and courses to broader age groups to better address the market demand for synchronized tutoring and customized learning. Our enrollment in the third quarter has reflected further diversification in various subjects and age groups. Our kindergarten and middle groups programs gained greater share in total enrollment, while maths classes remained our biggest enrollment contribution, we saw an increasing proportion of students participated in our non-math classes. Our small classes and other interest-oriented special programs have also been well received by our students and parents. We believe this diversification strategy will further enhance our competitiveness and help capture more opportunity in the evolving after-school education market. [Foreign Language] We have been adjusting our products and operations in accordance with the new regulatory requirements. Specifically, we modified our enrollment arrangements and class delivery process by restricting prepayment to cover a maximum of three months curriculum. As anticipated, this operational adjustment led to a year-over-year decrease in total enrollment for the quarter. However, we believe, the overall demand is not impacted by this change. [Foreign Language] Regarding our learning center network development, we have been optimizing our network with prudent expansion. In the third quarter, we added one learning center in Shanghai and Chongqing, respectively. At the same time, we moved three learning centers in Shanghai to new locations to better meet the related requirement and provide an optimal learning environment to our students. Our newly launched learning centers are also in the process of steady ramp-up. As of November 30, 2018, our total number of learning centers was…

Thank you, Mr. Tian and hello everyone. The third quarter had been a challenging and transforming period for us. We achieved a 5% year-over-year growth in top line. This performance is in line with our expectations and encouraging as we came off a relatively high revenue base in the same period of last year. During the quarter, we proactively adjusted our cost offerings to better accommodate the evolving market needs. We also focused on strengthening our core business, as we strategically combined or rearranged a few classes order to improve the overall efficiency. As a result of our efforts, we are pleased that gross margin realized slightly sequential improvement to 52.8% in the third quarter from 52.3% in the quarter before. Looking ahead, we will maintain our strategy for quality growth of our business with prudent operational modification for efficiency, improvement and long-term sustainable growth. As of current, we’re in the progress of comprehensively evaluating our learning center and have plans to close a few centers with low utilization rate with a goal of streamlining our operational – of our operating network. Therefore, we expect to incur a certain amount of one-time expenses as we close the centers, which will lead to some pressure on our gross margin. Despite the short-term impact, we believe we are doing – we believe what we are doing will consolidate our strength and better adapt ourselves to the evolving environment and market competitions within our industry. Now, I’d like to walk you through more details on our third quarter fiscal 2019 financial results. Revenue increased by 4.5% to RMB91.2 million for the third quarter of fiscal year 2019 from RMB87.2 million in the same period of last year, primarily due to tuition increase in standard programs, increased revenue contribution from the Ivy Program and…

Thank you. [Operator Instructions] The first question comes from Sheng Zhong with Morgan Stanley. Please go ahead.

[Foreign Language] I’ll translate it myself. So the first question is about, you mentioned that your students structure have been changed along with business restructuring. So what is – can you give more color on your student profile? And secondly, it is about revenue guidance. You are expecting a flattish year-over-year growth in fourth quarter. What’s the reason behind this outlook and what’s your outlook about FY 2020? And third one is about regulation impact including the teacher certificate requirement and also to see more schools in Shanghai, it’s promoting the after-school classes in the school. Thank you.

Sheng Zhong, thank you. Sheng Zhong, so let me answer question number one, number two and I will leave the third question to Tian. So on your first question, contribution from age groups that are beyond the primary school and subjects that’s not math, I cannot really – I cannot disclose too detailed numbers. But our third quarter revenue contribution is roughly 20% to 25% in terms of age group, 20% to 25% was contributed by non-primary school students and roughly 25% to 30% was contributed by non-math subjects. So, that’s on the revenue contribution from non-primary school students and non-math subjects. On your third question – on your second question, the guidance for next quarter is flat is because we’re still in the process of transitioning heavily concentrated maths type of business model to a more diversified business model. We do see decline in lower age groups, grade 1, grade 2 students for maths subject, but we see enrollments for our senior grades to be steady and enrollments for grade 4 and grade 5 actually increased. But because our revenue was heavily concentrated on primary school maths, the decline was not fully offset by the increase in other subjects and age groups. So that’s the reason why we give a flat guidance for next quarter. For next year, full year, we expect that our top line will grow at 20%. That’s our current estimate. And for your third question, I will ask Tian to answer.

[Foreign Language] On your question regarding the teacher certificate, we actually think this is a reasonable policy and we strongly support this policy. As you know that Four Seasons has always been focused on teaching content and the faculty development. And the mass majority of our faculty staff as well as our management have teacher certificates already. So we don’t expect this new policy will have a huge negative impact on our business. And on your third question, flexible school hours, I think the key is what school can offer after those school hours. So that’s why a lot of schools actually actively looking to purchase quality content, which also provide us good opportunity. Our intellectual maths program such as Bridge and Sudoku, are well received by those schools and we send our teachers to train their students and sometimes also train their teachers to let the students have a good content to have an interesting class to attend after 3:30 school hours.

[Foreign Language] Yes.

[Operator Instructions]. The next question comes from Melissa Chen with China Renaissance. Please go ahead.

[Foreign Language]

[Foreign Language] Nicky, let me translate for Mr. Tian. The math lab is actually an initiative that we are currently work on. It basically is a physical lab, which has a series of different content, and we intent to have this lab setup in both standard K-12 schools as well as some of our learning centers. In the lab, you will be able to access a series of programs, including maths culture, which talks about maths history et cetera. And the second module is maths activity, such as Sudoku or Bridge, which helps to increase the interest of students in maths. And the third module that we work on is a self-assessment feature, which help the students and teachers to assess the true ability of students in maths. So this is a series of content that we portend to have in this math lab. And our math lab project, we had this – we participated in the innovation exhibit, the fourth innovation exhibit in Zhuhai that’s organized by the National Education Bureau and our math lab is very well received by some of the educational experts. Now, we are working to complete this project and we plan to promote this math lab to both standard K-12 schools, as well as we also intend to have a setup in our own learning centers. So this is the math lab initiative. On your second question, sorry what’s your second question, Nicky?

Yes. So second question was on the demand part, like, any changes on the overall demand? And also any special promotional events for our winter and summer promotions? Thanks.

We actually see a steady demand, we don’t see a decline in the demand or just from the enrollments – of our current enrollments in the winter season we think we are able to achieve 20% growth next year. And for this winter semester, we didn’t offer any aggressive promotions as you know that Four Seasons unlike many of other institutions that we don’t really offer aggressive promotions. So, in the enrollment season that’s in November, we didn’t offer any huge promotion either.

Got it, thank you. That’s super helpful. Thank you.

As there are no further questions now, I’d like to turn the call back over to management.

Thank you, once again for joining us today. If you have further questions, please feel free to contact the Four Seasons Investor Relations through the contact information provided on our website or the Piacente Group investor relations. Operator?

This concludes this conference call. You may now disconnect your line. Thank you.