Meten EdtechX Inc. (METX) stock plunges during pre-market trading session. Here’s what’s happening?

Meten EdtechX Inc. (NASDAQ: METX) stock declined by 2.26% at last close. The company declined further by 1.54% in premarket trading today. Meten EdtechX is a prominent English language and skill enhancement company in China, providing English language and skills training to Chinese students and professionals.

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METX stock Financial Highlights

Meten EdtechX announced its second-quarter 2021 financial results. Given below is the summary:

  • Revenue grew 8.2 percent year over year to RMB204.8 million in the second quarter of 2021, and 10.9 percent year over year to RMB411.3 million in the first half of 2021, owing largely to a significant comeback in gross billing after the impact of COVID-19 receded.
  • Gross profit grew 23.4 percent year over year to RMB66.2 million (US$10.2 million) in the second quarter of 2021, owing largely to higher gross billings and operational efficiency.
  • The gross profit margin grew by 4.0 percentage points to 32.3 percent year over year. HY 2021 gross profit was RMB137.0 million (US$21.2 million), up 52.0 percent year on year. The gross profit margin grew 9.0 percentage points to 33.3 percent year over year.
  • Meten EdtechX had 102 learning centers open as of June 30, 2021. By the end of the second quarter of 2021, the Company had eliminated another eight offline learning centers in order to improve the structure of its offline centers.
  • The adjusted net loss for the second quarter of 2021 was RMB75.7 million, down 16.2 percent year over year. The adjusted net loss for HY 2021 was RMB128.9 million, down 32.3 percent year on year.

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Alan Peng, CEO of Meten EdtechX stated,

Their team’s ability to continuously execute their approach is reflected in their outstanding second-quarter performance. They’re still focused on satisfying market demands and handling COVID-19’s continued impact on their business. They’ve made several business changes and improvements in order to meet their long-term operating goals. All offline courses have been converted to online courses and beginning in September, all offline students will be able to enroll in online synchronized courses. They want to slowly decline their offline learning centers to 1-2 in each location, transforming them into learning and communication platforms for students, lowering fixed costs, and increasing profit margins.

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