The Best e-Learning Service Companyfile1.megastudy.net/fileserver/ipsi/content/... · Exams for civil service personnel megagosi.net Qualifying exams for certificates passmeca.net

The Best e-Learning Service Company

Investor Relations 2007www.megastudy.netwww.megastudy.net

2

www.megastudy.netwww.megastudy.net

13Population of Students11.

9Market Growth7.

17Profit Summary15.18Balance Sheet Summary16.

6Business Structure4.

15Sales Structure & Ratio13.

10Market Expansion & Entry Barrier8.

7Service Process5.

16Performance & Projection14.

12Market Size & Growth10.

8Membership & Sales in On-line6.

5Educational System3.4Business Domain 2.

14Business Road Map12.

11Offline Education9.

3What We Do 1.

ContentsContents

3


• First mover in e-learning• Dominant market leader

Technology Side Contents Side

Megastudy

Digital streaming tech.Image recording & processing tech.Learning & grade management tech.

Pool of the best lecturersCustomer-oriented high quality contentsWell-balanced On/Off network

Leading IT based e-Learning Service Company

GPA KoreanSAT

Essay &

Interview

Middle School

Current Major Business

High School Market

OverseasKindergarten& Elementary

School

Mbest(To be merged)

College/AdultEducation

What We doWhat We do

High-density,Dynamic Society

High broadbandInternet penetration

High zealfor education

Huge privateEducation market

4


Subsidiary

Business DomainBusiness Domain

HeeSoMegastudy

Off-line school for state exams

• Equity Holdings : 40.0%

• Date of Foundation : April, 2005

• Sales in 2006 : 4,263 million wonNet Loss in 2006 : 473 million won

High School

megastudy.net

Middle School

mbest.net

7 locations in Seoul

Exams for civil service personnel

megagosi.net

Qualifying exams for certificates

passmeca.net

MegaPnPA publishing and printing company that produces materials for online lectures and publicity booklets of Megastudy

• Equity Holdings : 43.8%

• Date of Foundation : August, 2001

• Sales in 2006 : 2,399 million wonNet Profit in 2006 : 79 million won

On-line Off-line Academic Institutes

5


PrimaryEducationPrimaryPrimary

EducationEducation

SecondaryEducationSecondarySecondaryEducationEducation

HigherEducation

HigherHigherEducationEducation

K-6KK--66

Undergraduate & Graduate School

Undergraduate & Undergraduate & Graduate SchoolGraduate School

Middle School1-3 (7-9)

Middle SchoolMiddle School11--3 (73 (7--9)9)

High School1-3 (10-12)

High SchoolHigh School11--3 (103 (10--12)12)

Early Application

Regular Application

UniversityGPA

University-specific exams

KSAT

Educational SystemEducational System

GPA

Extra curricular activity

University-specific exams

KSAT (minimum requirement

for early application II)

Middle School

• Preparing for G.P.A

• Preceding Studyfor High School

- Essay & Interview style tests- Increase the weight

Remarks based Evaluation

Absolute Evaluation

OLD

9th grade systemK S A T

Relative Evaluation

NEW

University-Specific

Exam

G P A

Re-takersReRe--takerstakers

< Education System > < Entrance Exam Factors Change>

6

www.megastudy.netwww.megastudy.netBusiness StructureBusiness Structure

Providing Online Lectures/Materials

Synergy through combination of online & offline

Off-line

On-line

■ Online Biz : Provide lectures to students via video streaming over the internet

■ Offline Biz : Develop contents to maximize synergy effect for online business and provide a basis for contact

with customers

Synergy through combination of online & offline lectures

Offline Educational Institutes

(7 Institutes )

Contents Providing Base

Offline Lecture

FILMING/EDITINGUPLOAD

STREAMING

FILMING/EDITINGUPLOAD

STREAMING

Online Lecture VOD Service

KSAT GPAUniversity

-specific exams

Find Out What Customers need

Search For New Lecturers

Complements the weakness of only online business

7

www.megastudy.netwww.megastudy.netService ProcessService Process

KSAT Optional

Mandatory

572nd Foreign Language

3864Essay & Interview

128314Megastudy

1741Sciences(8 subjects)

2040Social Studies(11 subjects)

1554Mathematics

1854English

1554Korean

OfflineSubject On

Line

Single Subject Class

1,000 Minutes

60 ~ 90 Days

10 ~ 15 Chapters

VOD Type Service

Off-

line Single Subject Class

2 Months (8 Weeks)

2~3 hours / week

16 ~ 20 Hours

\ 190,000

Lecture \ 65,000Material \ 10,000

On-

line

1/31/3

Term-Based Course

Cover all Subjects

Close care by in-house tutors

6 Months (\760,000)

12 Months (\1,280,000)

■ Middle School

98-Mbest

226314Megastudy & Mbest

■ Teachers in Megastudy & Mbest

Mbe

st

8

www.megastudy.netwww.megastudy.netMembershipMembership & Sales in Online& Sales in Online

■ Penetration

35%7375%150200Re-takers

Total

3rd grade

2nd grade

1st grade

PaidSubscribers

RegisteredMembers

254

102

43

26

Numbers

17%37%5531,478

25%57%237412

10%24%104431

6%14%62436

Numbers %Numbers %

<unit : thousand>

(9)(109)Others

Middle SchoolTotal

3rd grade

2nd grade

1st grade

Elementary

31

11

11

9

(4)

1.5%4.5%942,075

1.6%5.4%37684

1.6%4.9%34701

1.3%3.3%23690

(12)

Current Registered Members(915) Graduated Students

■ Middle School Market

35%

13%

218

27

135

5,782

2005

278177126Sales per paid subscribers (unit : thousand won)

24%3%0%Weight of Number ofTerm-Based Course

56%

43

215

12,058

2006

6%

20

87

3,541

2004

0%Weight of Sales ofTerm-Based Course

7Paid Subscribers(unit : thousand)

22Subscribers (unit : thousand)

842Online sales (unit : million won)

2003

■ Online Sales Trend

197

895

220

1,150

43.5

2005

187

795

190

850

35.6

2004

221204210Sales per paid subscriber(thousand won)

1,045650341Number of bought Lectures (thousand)

25416976Paid Subscribers (thousand)

1,468568240Subscribers (thousand)

56.134.316.0Online Sales (billion won)

2002 20062003

Hig

h Sc

hool

Mid

dle

Scho

ol

9


Online Market

Paid Service

Megastudy

ETOOS

VitaEdu

Free Service

EBSi

TeachMe

KangNamGu

Offline Market

Hansaem

Joongang

Jungil

：

Daesung

Jongro

Megastudy

5.8%5.0%4.0%0.8%

3.3%

9.9%8.4%6.6%

3.1%

10.0%10.1%

20.0% 21.0%22.5%

24.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

'2002 '2003 '2004 '2005 '2006

HS 1st HS 2st HS 3st

0.2%

0.6%0.8%

1.3%

0.2%

0.8%

1.1%

0.3%

0.8%1.0%

1.6%1.6%

0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%1.8%

'2002 '2003 '2004 '2005 '2006

MS 1st MS 2st MS 3st

■ Paid Member Penetration in High School Market

■ Paid Member Penetration in Middle School MarketSt

able

Gro

wth S

tage

Industrial Growth Curve

Initia

l Stag

e

Offline Mrket

Potential Market

For Megastudy

Online MarketPaid Service

Mbest1318 Class

EduClubIwillPass

:

Free Service

EBSi

:

Market GrowthMarket Growth

High School

Middle School

10


CommunityCommunication

CustomizedInformation

LearningSupportingService

■ One stop learning place & high loyalty of customers

Off-lineEvent

Market Expansion & Entry BarrierMarket Expansion & Entry Barrier

Suggest a customized learning road mapProvide advice on selecting lectures

Provide best information about college entrance at the most optimum time (scoring service, college application assistance service, etc.)

M-Zone : Entertainment & informationT-Zone : communication with lecturers Cheer on students during examination

5~6 times per year

Popular off-line events

■ Steadfast Infrastructure & High Entry Barrier

■ Virtuous Cycle

Contents

(Lecture)

Offline

Institute

Membership

High daily

website Hits

Popular website,

attract quality

lecturers

Quality lecturers

reinforce the cutting

edge of the website

and increase traffic

11


Single subject class – specialize in one subject courseCombined class – general course of all subjects for high school students after regular schoolRe-takers general class – general course of all subject run all day like a regular school graduates

Offline EducationOffline Education

Single subject classCombined class

Re-takers general classSingle subject class

Combined classRe-takers general class


Re-takers general classSingle subject class

Combined classRe-takers general class

Essay-writingCombined class

6,000(850)

2,000(250)

12,000(1,100)

4,000(850)

1,000

High School studentsRe-takers

Elementary & Middle schoolHigh School students

Re-takers



High School students12/2004

11/2004

11/2004

11/2004

7/2003

Launch Product Customer Capacity/mo.

Kangnam

Songpa

Kangbuk

Seocho

Daechi


13,000(600)

High School studentsRe-takers12/2005Noryangjin

Monthly Capacity for Single subject class Monthly Capacity for Re-takers general class

Re-takers general class(Boarding School) 300Re-takers12/2006Namyangju

12


7.2 % of

high school

market

220bn won

Market Size & GrowthMarket Size & Growth

3.42.3

1.3 1.40.6

1.2

4.8

5.1

4.9 4.5

5.84.3

3.8

3.5

0.1 0.20

1

2

3

4

5

6

7

8

9

Korea UnitedStates

Canada Australia Portugal Spain Greece Japan

Public Education Expenditure % of GDP

Private Education Expenditure % of GDP

0.00

0.50

1.00

1.50

2.00

2.50

3.00

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

6.0

7.0

8.0

9.0

10.0

11.0

12.0

Public Education Private Education % of Education

(%)(million w on)

Elementary School W 10 tHigh School W 3.3 t

Middle School W 5.6 t

■ Education Expenditure of OECD Countries <% of GDP> ■ Expenditure on Education per households

■ Private Education Market in 2006

* Korea's education expenses portion of per capita income is the highest among OECD nations. < Education at a Glance - OECD Indicators 2005>

* Spending by households on total education and private education rose by 8.3% and 11.4% p.a respectively for past 10 years. < The National Statistical Office >

■ Online Market Size in High School

* We estimate total private education market to be W19t in 2006, and college entrance prep market to be W3.3t.

< Ministry of Edu in2003 / Megastudy >

-100200300400500600

'04 '05 '06 '07 '08 '09 '100.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%Online Market Size

Online % of Market

bn \

-

100

200

300

400

'04 '05 '06 '07 '08 '09 '100.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%Online Market Size

Online % of Market

■ Online Market Size in Middle School2.0 % of Middle schoolmarket100bn won

bn \

13

www.megastudy.netwww.megastudy.netPopulation of StudentsPopulation of Students

-

500

1,000

1,500

2,000

2,500

'1999 '2000 '2001 '2002 '2003 '2004 '2005 '2006 '2007 '2008 '2009 '2010

Middle School 1s t Middle School 2s t Middle School 3s t

1,934

621

621

691

2004

2,028

683

682

663

2008

1,841

603

610

628

2002

1,831

609

608

614

2001

1,861

635

614

611

2000

1,897

641

640

616

1999

1,9321,9922,0692,0752,0111,855High School Total

656678697684618606Middle School 3rd

651660687701688625Middle School 2nd

625654685690705624Middle School 1st

200620052003 201020092007

■ Middle School Students [Data : Ministry of [Data : Ministry of EduEdu「「Annul Statistics of Annul Statistics of EduEdu 19991999--20062006」」 ]]

In high school sector, we consider only academic schools of which almost all students try to enter universities and exclude the vocational high schools which takes about 30% of all high school students.

<unit : thousand>

1,232

399

409

424

2004

1,411

431

490

491

2008

1,220

400

409

410

2002

1,260

439

406

415

2001

1,324

467

445

412

2000

1,399

477

472

451

1999

1,4471,4631,3581,2851,2601,224High School Total

482487428414405405High School 3rd

486485434431417404High School 2nd

479491496440438416High School 1st

200620052003 201020092007■ High School Students

-

200

400

600

800

1,000

1,200

1,400

1,600

'1999 '2000 '2001 '2002 '2003 '2004 '2005 '2006 '2007 '2008 '2009 '2010

High School 1st High School 2st High School 3s t

[Data : Ministry of [Data : Ministry of EduEdu「「Annul Statistics of Annul Statistics of EduEdu 19991999--20062006」」 ]]

14


KSAT · GPA (1st and 2nd year student expansion)

Contents diversification

Middle school

Kindergarten &elementary school

D o w n w a r d(Kindergarten,

elementary, middle school )

Existing Biz(high school)

Business Road MapBusiness Road Map

Expansion of existing market & entry into new market

O v e r s e a s

’05 ’06 ’07 ’08

Entry into Chinese & Japanese markets

U p w a r d(Adult)

State/Qualifying exam

MEET/DEET/Law School

College transfer & English / Language

B2B

15

www.megastudy.netwww.megastudy.netSales Structure & Ratio Sales Structure & Ratio

Offline

OnlineLectures

3.6

16.0

34.5 35.6

43.9

59.0

88.5

2.76.7 6.4 8.0 10.3

13.5

0.2 1.6 4.78.3

19.1

32.0

46.0

0.5

0

20

40

60

80

100

2001 2002 2003 2004 2005 2006 2007(E)

Online Lecture Materials Offline

■ Sales Structure

Materials

Institutes

Others

100%

32%

10%

58%

101.3

32.0

10.3

59.0

2006

100%

27%

11%

62%

71.0

19.1

8.0

43.9

2005

32%46.017%8.310%4.78%1.64%0.2Offline

4.3

0.5

3.6

2001

100%

11%

84%

20.4

2.7

16.0

2002

100%

13%

79%

46.0

6.7

34.5

2003

100%

15%

75%

100%148.0100%50.3Sales Total

10%13.513%6.4Materials

58%88.571%35.6LecturesOnline

2007(E)2004

<unit : billon won>

<unit : billon won>

16

www.megastudy.netwww.megastudy.netPerformance & Projection Performance & Projection

32%

10%

58%

26%

26.5

32%

32.3

30.8

38.2

32.0

10.3

59.0

101.3

2006

31%

9%

60%

26%

39.0

34%

50.0

43.3

54.7

46.0

13.5

88.5

148.0

2007(E)

27%

11%

62%

29%

20.9

35%

24.7

19.2

27.1

19.1

8.0

43.9

71.0

2005

29%

14.8

39%

19.8

12.3

18.2

8.3

6.4

35.6

50.3

2004

OP margin

Operating Profit

Operating Expense

COGS

Net margin

Net Profit

Revenue

16%

13%

71%Online Lectures

Offline

Online Materials

<unit : billion won>

16%

22%

48%

2005

19%

25%

47%

2007(E)

9%

19%

50%

2004

18%

25%

49%

2006

Offline

LecturesOnline

Materials

OP margin

27.0% 29.5%32.6% 25.7%R O E

High school + Middle schoolHigh school + Middle school

17

www.megastudy.netwww.megastudy.netProfit Summary Profit Summary –– 3Q3Q


Accumulative

+59%

+68%

+48%

+59%

+46%

+58%

+65%

+60%

YoY

30.5%

16.9

45.1%

25.0

10.8

19.5

14.5

6.1

34.7

55.4

3Q

2007

+62%

+72%

+48%

+57%

+50%

+51%

+68%

+60%

YoY

30.9%

10.7

43.1%

14.9

7.3

12.3

9.3

3.9

21.1

34.5

3Q

2006

38.7%36.0%OP margin(%)

49.428.7Operating Profit

31.221.1Operating Expense

46.930.0COGS

29.1%28.8%Net margin(%)

37.123.0Net Profit

Revenue

20072006

26.7

8.1

44.9

79.7

1~3Q

40.1

12.2

75.2

127.5

1~3Q

Online Lectures

Offline

Materials

18

www.megastudy.netwww.megastudy.netBalance Sheet SummaryBalance Sheet Summary


3.50.70.50.6Intangible Assets

10.4

111.9

28.3

3.2

153.8

9.5

30.8

40.2

27.7

47.8

35.4

114.3

79.8

194.1

3.3

80.5

28.3

3.2

115.4

5.7

22.4

28.1

20.2

30.7

18.8

70.3

73.0

143.4

4.8

58.7

24.1

3.0

90.5

2.4

12.3

14.7

15.3

23.7

8.6

48.2

57.1

105.2

0.3

37.7

24.1

3.0

65.1

0.6

7.9

8.5

6.9

8.7

1.3

17.5

56.1

73.6

Other Non Current Asset

Tangible Assets

Investment Assets

Non-Current assets

2006

Capital adjustment

Retained Earnings

Capital Surplus

Paid-in Capital

Total Shareholder’s Equity

Non-Current Liabilities

Current Liabilities

Total Liabilities

Current assets

Total Assets

3Q 200720052004

Documents

The Best e-Learning Service Companyfile1.megastudy.net/fileserver/ipsi/content/... · Exams for civil service personnel megagosi.net Qualifying exams for certificates passmeca.net