Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Adele Mao – Susquehanna Financial Group.
Adele Mao – Susquehanna Financial Group
My question is related to the gaokao retake business. Obviously Mingshitang enrollment has ramped up very well over the past quarter. There appear to be some changes related to gaokao coming in China over the next couple years. How do you view these changes will impact the gaokao retake trend in light of the policy changes over the next couple years, whether you see this as an opportunity to further get into acquisitions in different areas?
Michael Yu
There are many to changes [in] gaokao over the next several years, so whether that is the evaluation system is having to change, people are – I want to say that up for the next several years they are not being told to take only one gaokao as their evaluation system. Also they have to take the student’s average scores in their schools and other factors into account. But this change will not affect the business because mainly the gaokao examination, that is the college entrance [examination] will still take I think 80% of the account like in the enrollment.
So the gaokao, that is college entrance examination, will be still very important to these students new enrollment into the universities. The offer is good for us, actually, that the policy is, that the government has repeatedly said that all the public high schools, they cannot use student’s leisure time or weekend to ask a student to stay in school to take more courses. That means students their time will be freed out in the evening or during the weekend. But students are free to take all the private training schools.
So like in Central Province this year, we can see there are more and more high school students coming to our school because the provincial government strictly doing that policy there. They tell the school I’m not allowed to give students lectures or courses during the weekend, so during the weekend they still come to New Oriental.
So my idea is to make changes here. I think the first change is not better, although it’s not so advantageous to New Oriental, but the second is really good for New Oriental. So I look upon gaokao as good business like in future time.
But still there are so many still, like at least around 50 students of high school students who were not to have any chance to go to university to study every year. And the strange thing is that some of the four also getting enrolled by universities. But a university, not an important university that we say a famous university in China, that they quit going to university. And they stay in gaokao school to study for another year so that they will have a good chance to go to famous universities.
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