Ping Wei, the CFO of China Distance Education Holdings Limited (DL), Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - August 30, 2013 - The Wall Street Transcript has just published its Education Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Gainful Employment Clarification - Enrollment and Retention Trends - Economic Recovery and Enrollment Trends - Growth Drivers in Chinese Education Sector

Companies include: China Distance Education Holdi (DL) and many more.

In the following excerpt from the Education Report, the CFO of China Distance Education Holdings Limited (DL) discusses company strategy and the outlook for this vital industry:

TWST: To what extent has the company been growing its sales and enrollments, and what is driving that growth?

Ms. Wei: We have grown at a CAGR of over 50% from the inception of the company, and we think the key reason why it has been growing so healthily is that we focus on offering quality and results with professional test preparation courses. The goal of our students' learning is very clear; that is to pass the professional exams. That's our focus as well, so whatever we do, we have that endpoint in mind. We help our students improve their passing rate quite a bit. In general, we can safely say our students' passing rate with the professional exam test prep courses is typically about 20 percentage points better than the national average.

The Chinese professional exams are quite difficult to pass. For example, the Chinese CPA exam, I think they are the lowest-passing-rate professional accounting exams compared to most other countries. It has a nationwide single-subject passing rate of about 20%, and we basically double our students passing rate to about 40% or even better. With that kind of superior results, word-of-mouth referral becomes our biggest revenue source and the biggest sort of growth driver. So high-quality courses and services help generate superior results, then students who used our services tell their friends and family and suggest they use our courses as well, and as we become bigger, the word of mouth becomes actually our brand power as well.

We operate in a large market. China's professional market is estimated to be over U.S.$40 billion this year. Specifically, there are about 4.6 million people writing accounting professional exams each year, and 13 million people are required to satisfy continuing education requirements each year. In health care, those numbers are 2.5 million for the test prep market and 6 million for the continuing education market annually. In construction and engineering vertical, the number is similar to the health care vertical. To date, the highest penetration we have achieved is in accounting, but we only achieved about 10% overall penetration; a long way for us to grow revenue.

TWST: Do you expect the company to continue to experience the same pace of growth?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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