Wall Street Transcript Interview with China Distance Education Holdings Limited (DL) Chief Financial Officer Ping Wei

Wall Street Transcript

67 WALL STREET, New York - August 30, 2012 - 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, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Enrollment and Retention Trends - Regulatory Risks - Chinese Education Growth Catalysts - For-Profit Institutions - Online Content Distribution

Companies include: China Distance Education Holdings Limited (DL) and many others.

In the following excerpt from the Education Report, the CFO of China Distance Learning discusses the outlook for her company for investors:

TWST: Please introduce our readers to China Distance Education with some history and an overview of the company today.

Ms. Wei: China Distance is a company that was founded in 2000. Today, we are the largest online education company in China

based on the number of paid enrollments on a yearly basis.

We were founded by our Chairman and CEO, Mr. Zhengdong Zhu. The year 2000 was the year of the dot-com. He founded a dot-com company, but at that time he did not believe in the free-content model. He thought that if you were to make money on the Internet, you should offer something that people are willing to pay for. His background was in wireless communication, so he has a strong background in technology, which led him to establish the company chinaacc.com. The name in Chinese means China Online Accounting School.

So he founded the online accounting school in 2000 to offer accounting test-preparation courses and continuing education courses for people who want to pass various accounting exams to obtain certificates or designations for career advancement and for people who want to continue to satisfy continuing education requirements to keep their designations.

Apparently he did something right, because by 2003 the company had grown to over 50,000 annual paid enrollments, and we became cash flow positive that year. From that year on, we've never had a year when we either lost money or were cash flow negative.

So we started with accounting, and right now we have almost 70% online market share in the online accounting test preparation market. Then, by 2004, 2005, we felt like we had a pretty solid footing in the accounting vertical, so we decided to diversify and expand to other education verticals. The first nonaccounting vertical we entered was law, and subsequent to that we entered into the health care vertical, where we offer test preparation courses for people to obtain doctor's licenses, a nursing certificate or a pharmacist license. And then, we also entered into construction and engineering and a few other verticals.

Today, we actually operate 16 Web sites offering courses in 13 disciplines. Of the 13, our key verticals include accounting, with 70% online market share and still over 50% of our total revenue; health care, with about a 65% online market share today, which puts us at number one in terms of market share, and also over 10% of our total revenue as of this year; and construction and engineering, another new but fast-growing vertical for us; and then, self-taught higher education, which is helping us to serve a younger age group, basically university-aged kids who do not have the opportunity to go to a regular government university, but choose to obtain their degree by studying on their own. We offer these self-taught learners test preparation courses, and we also offer government-endorsed partial credit courses to help them get there.

For more from 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 and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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