Offcn Education Technology Co., Ltd. — Interim / Quarterly Report 2022

Apr 28, 2022

OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Stock Code: 002607 Stock Abbr.: OFFCN EDU Announcement No.: 2022-044

OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

The Company and the Company’s Board of Directors hereby guarantee that the contents of this quarterly report are true, accurate, and complete, and that there are no misrepresentations, misleading statements, or material omissions.

The Company’s First Quarter 2022 Report is prepared and published in Chinese version, and the English version is for reference only. Should there be any inconsistency between the Chinese version and English version, the Chinese version shall prevail.

Important notes:

1. The Company’s Board of Directors, Supervisory Committee, directors, supervisors, and senior management hereby guarantee that the contents of this quarterly report are true, accurate, and complete, and there are no misrepresentations, misleading statements, or material omissions, and shall assume individual and joint legal liabilities.

2. The Company’s legal representative, the head in charge of accounting and the head of the accounting department (Accounting supervisor), hereby declare that the financial report in this quarterly report is authentic, accurate and complete.

3. Whether this first quarter report is audited

□ Yes √ No

Section I. Key financial data

1. Key accounting information and financial indicators

Does the Company need to adjust its financial information retrospectively or restate its accounting information of previous year?

□ Yes √ No

			Increase/ Decrease in the current reporting period over the same period of thepreviousyear
		Same period of the previous year
	Current reporting period

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Operatingincome(RMByuan)	1,212,740,311.93	2,051,691,383.47	-40.89%
Net profit attributable to shareholders of the listed Company (RMByuan)
	-463,824,594.93	140,729,639.84	-429.59%
Net profit after deducting non-recurring profits and losses attributable to shareholders of the listed Company (RMByuan)
	-469,727,159.08	92,213,329.43	-609.39%
Net cash flow from operating activities(RMByuan)
	598,889,061.73	-246,724,873.67	342.74%
Basic earningsper share(RMByuan/share)	-0.08	0.02	-500.00%
Diluted earnings per share (RMByuan/ share)
	-0.08	0.02	-500.00%
Weighted average return on net assets	-27.99%	3.24%	-31.23%
			Increase/ Decrease at the end of this reporting period over the end of the previousyear
	End of the current reporting period
		End of the previous year
Total assets(RMByuan)	9,200,482,823.27	10,305,183,525.70	-10.72%
Owner's equity attributable to shareholders of the listed Company (RMByuan)
	1,424,994,159.27	1,888,818,754.20	-24.56%

2. Items and amount of non-recurring profits and losses

• √ Applicable □ Not applicable

		Unit: RMByuan Description --
	Amount of current reporting period
Item		Description
Government subsidies included in the current gains and losses (closely related to the normal business of the enterprise, except for government subsidies enjoyed fixedly, quantitatively and continuously in accordance with national policies and certain standards)
	1,220,048.81
Profits or losses from entrusting others to invest or manage assets
	2,749,712.23
Profits and losses on changes in fair value arising from the possession of transactional financial assets, transactional financial liabilities, and the investment income from the disposal of transactional financial assets, transactional financial liabilities and available-for- sale financial assets, except the effective hedging business related to the Company’s normal business operations.
	2,674,975.31
Other non-operating income and expenses except for the items above
	-152,921.74
Less: Impact on income tax	589,250.46
Total	5,902,564.15	--

Other profit or loss items that meet the definition of non-recurring profits and losses

□ Applicable √ Not applicable

The Company does not have other profit or loss items that meet the definition of non-recurring profits and losses. Explanations for the Company’s classifying items of non-recurring profits or losses listed in the Explanatory Announcement No. 1 for Public Company Information Disclosures – Non-recurring Profits and Losses as items of recurring profits or losses.

□ Applicable √ Not applicable

The Company does not classify any non-recurring profits and losses items that are listed in the Explanatory Announcement No. 1 for Public Company Information Disclosures – Non-recurring Profits and Losses as items of recurring profits and losses.

3. Cases and reasons for fluctuation of key accounting information and financial indicators

• √ Applicable □ Not Applicable

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

		Amount at the
	Amount at the end of
		beginning of the
Item of balance sheet	the reporting period		Growth	Note
		reporting period
	(RMB yuan)
		(RMB yuan)
Monetary funds	1,129,779,804.27	1,970,361,272.64	-42.66%	Mainly due to the repayment of short-term loans in the current period
Transactional financial assets	118,374,738.18	346,726,621.74	-65.86%	Mainly due to the maturity redemption of wealth management products
Other current assets	22,946,171.86	36,959,129.80	-37.91%	Mainly due to the increase of prepaid expenses
Short-term loans	1,651,209,492.99	3,152,945,812.59	-47.63%	Mainly due to the repayment of short-term loans in the current period
Contract liabilities	4,034,759,242.27	3,063,721,290.28	31.69%	Mainly due to the increase of collecting training fees from civil servant recruitment and post-graduate examinations in the first quarter of 2022
Tax payable	28,432,694.84	12,566,751.84	126.25 %	Mainly due to accrued VAT and additional tax on the income of first quarter of 2022
Other current liabilities	121,042,777.27	91,925,853.39	31.67%	Mainly due to the increase in the balance of contract liabilities at the end of the first quarter of 2022
Item of income statement	Amount of current	Amount of previous
			Growth	Note
	period(RMByuan)	period(RMByuan)
Operating income	1,212,740,311.93	2,051,691,383.47	-40.89%	Mainly due to the pandemic prevention and control, the number of offline classes in the first quarter of 2022 was reduced compared with the same period of the previous year, as well as the postponement of the multi-provincial joint examination of civil servant recruitment
Taxes and surcharges	8,798,438.13	3,125,104.09	181.54 %	Mainly due to the tax incentives in the same period of the previous year
Financial expense	69,571,481.28	108,656,990.19	-35.97%	Mainly due to the decrease in interest expense on short-term loans in the current period
Other income	8,268,197.61	60,454,036.43	-86.32%	Mainly due to the tax incentives included in other income in the same period of the previous year

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Investment income	2,755,592.22	32,350,483.88	-91.48%	Mainly due to the decrease in income from wealth management products and fixed time deposit redemption
Credit impairment loss	-1,005,625.25	-239,123.84	320.55 %	Mainly due to the increase in accounts receivable and the increase in accrued bad debt
Income tax expense	-81,122,491.94	24,090,187.92	-436.74 %	Mainly due to the accrual of deferred income tax assets in the current period
Item of cash flow statement	Amount of current	Amount of previous
			Growth	Note
	period (RMB yuan)	period (RMB yuan)
Other cash received related to operating activities	22,063,195.70	8,365,632.60	163.74 %	Mainly due to the recovery of deposits in the current period
Cash for purchasing goods and labor services	210,528,840.27	389,263,578.68	-45.92%	Mainly due to the impact of the pandemic in many provinces and cities, the number of offline classes in the current period was reduced and operational cost and spending decreased
Cash paid to and for employees	1,224,818,887.78	1,788,537,241.10	-31.52%	Mainly due to the reduction of the Company’s personnel and the impact of operating losses on the performance incentives of employees
Taxes paid	25,331,722.29	81,728,859.56	-69.01%	Mainly due to the loss in the fourth quarter of the previous year and the non-payment of enterprise income tax in this quarter
Cash received from recovery of investments	344,776,858.87	4,234,310,000.00	-91.86%	Mainly due to the decrease in short-term wealth management purchases in the current period and the corresponding reduction in wealth management redemptions
Cash received from investment income	2,764,585.77	11,192,589.09	-75.30%	Mainly due to the decrease in short-term wealth management purchases in the current period and the corresponding decrease in redemptions

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets	8,768,861.04	2,774,248,578.57	-99.68%	Mainly due to the purchase of land use rights in the same period of the previous year
Cash paid for investment	116,700,000.00	4,226,550,000.00	-97.24%	Mainly due to the decrease in short-term wealth management purchases in the current period
Cash received from the loan	-	2,670,000,000.00	-100.00 %	Mainly due to zero new short-term loans in the current period
Cash paid for dividends, profits, or interest payments	26,787,416.64	46,324,162.51	-42.17%	Mainly due to the decrease in interest expense on short-term loans in the current period
Other cash paid related to financing activities	134,755,697.06	354,129,507.17	-61.95%	Mainly due to the decrease of cost on house leasing in the current period

Section II. Information of shareholders

1. Table on the total number of common shareholders, preferred shareholders with restored voting rights and shares held by the top 10 shareholders

Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0	Unit: share(s) Total number of common shareholders at the end of the reporting period 153,843 Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any) 0 Particulars about shares held bythe top10 shareholders Name of shareholder Nature of shareholder Shareholding percentage(% ) Number of shares held Number of shares held with sales restrictions Pledged,marked or frozen Status of shares Number of shares Lu Zhongfang Domestic naturalperson 41.36% 2,550,549,260 2,550,549,260 Pledged 1,157,543,359 Li Yongxin Domestic naturalperson 18.35% 1,131,415,121 1,131,070,121 Pledged 543,150,000 Wang Zhendong Domestic naturalperson 13.83% 852,885,418 639,664,063 Pledged 328,193,884 Beijing Aerospace Industry Investment Fund (Limited Partnership) Domestic non-state-owned legal person 3.24% 199,611,483 0 Beijing Offcn Future Information Consulting Domestic non-state-owned legal person 1.30% 80,000,000 0
				Total number of preferred shareholders with restored voting rights at the end of the reporting period (if any)
Total number of common shareholders at the end of the reporting period
		153,843					0
	Particulars about shares held bythe top10 shareholders
					Number of shares held with sales restrictions	Pledged,marked or frozen
		Shareholding percentage(% )
Name of shareholder	Nature of shareholder		Number of shares held
								Number of shares
						Status of shares
Lu Zhongfang	Domestic naturalperson	41.36%	2,550,549,260		2,550,549,260
						Pledged		1,157,543,359
Li Yongxin	Domestic naturalperson	18.35%	1,131,415,121		1,131,070,121
						Pledged		543,150,000
Wang Zhendong	Domestic naturalperson	13.83%	852,885,418		639,664,063
						Pledged		328,193,884
Beijing Aerospace Industry Investment Fund (Limited Partnership)	Domestic non-state-owned legal person	3.24%	199,611,483		0
Beijing Offcn Future Information Consulting	Domestic non-state-owned legal person	1.30%	80,000,000		0

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Center (Limited Partnership)
Zhou Xiayun	Domestic naturalperson	1.28%	78,848,640	0
					Pledged	69,000,000
Zhou Hui	Domestic naturalperson	1.17%	72,277,920	0
					Pledged	26,490,000
Beijing Kerui Technology Innovation Investment Center (Limited Partnership)	Domestic non-state-owned legal person	1.04%	64,100,323	0
Zhou Li	Domestic naturalperson	0.78%	48,185,280	0
Beijing Guangyin Venture Capital Center (Limited Partnership)	Domestic non-state-owned legal person	0.71%	43,750,952	0
Particulars about shares held bythe top10 shareholders without sales restrictions
					Type of shares
Name of shareholders		Number of shares without sales restrictions held				Number of shares
					Type of shares
Wang Zhendong		213,221,355			RMB ordinary shares
						213,221,355
Beijing Aerospace Industry Investment Fund(Limited Partnership)		199,611,483
					RMB ordinary shares
						199,611,483
Beijing Offcn Future Information Consulting Center (Limited Partnership)		80,000,000
					RMB ordinary shares
						80,000,000
Zhou Xiayun		78,848,640			RMB ordinary shares
						78,848,640
Zhou Hui		72,277,920			RMB ordinary shares
						72,277,920
Beijing Kerui Technology Innovation Investment Center (Limited Partnership)		64,100,323
					RMB ordinary shares
						64,100,323
Zhou Li		48,185,280			RMB ordinary shares
						48,185,280
Beijing Guangyin Venture Capital Center(Limited Partnership)		43,750,952			RMB ordinary shares
						43,750,952
Yang Shaofeng		24,062,680			RMB ordinary shares
						24,062,680
Hong Kong Securities Clearing Co., Ltd.		23,977,849			RMB ordinary shares
						23,977,849
		The Company’s controlling shareholder and actual controller Lu Zhongfang and Li Yongxin are in a mother-son relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future Information Consulting Center (Limited Partnership) are acting in concert. Zhou Xiayun and Zhou Hui have a father-son relationship. Zhou Xiayun and Zhou Li have a father-daughter relationship. It is unknown whether there is an associated relationship among the above-mentioned other shareholders, nor whether the above-mentioned shareholders belong to the parties acting in concert as stipulated in the_Administrative_ Measures on Information Disclosure of Shareholding Changes in ListedCompanies.
Description of the relationship or concerted action among the above mentioned shareholders
Description of the top 10 shareholders participating in the
		None

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

margin trading or short selling business (if any)

2. Table on the total number of preferred shareholders and shares held by the top 10 preferred shareholders

□ Applicable √ Not Applicable

Section III. Other significant events

√Applicable Not applicable

1.Overview of the Company’s operation in the first quarter of 2022

Since the year of 2022, with the ongoing and repeating Covid-19 pandemic, the strictness of prevention and control measures is being upgraded continuously in various areas. The Company is facing a harsher external environment with more tough challenges for its operation compared with the year of 2021. Especially since March, which is the traditional peak period for the Company’s marketing and trainees enrollment in previous years, the pandemic bursts out in many cities of the country and the situation is far more severe than last two years. Stricter prevention and control measures are applied in many cities and hundreds of direct-operated branches of the Company in various areas suffer from periodic suspension of classes in turns. Meanwhile, the multi-provincial joint examination of civil servant recruitment in first half of the year, the national-level interview examination of civil servant recruitment and the public institution recruitment tests are being deferred one by another. The Company’s enrollment and teaching of classes are both affected greatly. The uncertainty of the operating environment has objectively caused a periodical impact on the development of the training business and has a certain impact on the Company's performance.

But even so, the Company strived to take strong measures, actively promoted the 2022 business improvement plan, and gained a gradual result in the first quarter. During the reporting period, the Company implemented amoeba operation reform plan internally and put efforts in reducing costs and expenses. Although there is still a considerable improving area for optimization, the total operating cost has decreased compared with the same period of last year, and the effect of lean cost control has emerged. Besides that, in such a harsher operating environment compared with last year, the Company adjusted its products’ structure, and continuously reduced the ratio of high-refund products. The cash received by the Company from selling goods and providing service is basically the same as that in the same period of last year. The net cash flow of operation turns positive on a monthly basis. The Company’s business stays steady in the adversity during the adjustment period of product strategies.

In future, the Company will continue to promote its 2022 business improvement plan and enhance the Company’s operating efficiency, by maintaining a prudent and steady business strategy, judging and responding to market risks in a timely manner, optimizing internal operation by reducing costs and enhancing efficiency, adjusting its products structurally, and speeding up the development of new businesses.

2. The progress of the investigation launched by the China Securities Regulatory Commission into the Company:

On December 15, 2021, the Company received the Notice of Filing (No. SR Filing 0232021010) from the CSRC. According to the Securities Law of the People's Republic of China, Law of the People’s Republic of China on Administrative Punishment and other laws and regulations, the Company is suspected of failing to disclose related party transaction information and violating the laws and regulations of information disclosure. The CSRC decided

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

to file a case against the Company.

On January 15, 2022, the Company issued the Announcement on the Progress of the Investigation and Risk Warning (No. 2022-006).

On February 15, 2022, the Company issued the Announcement on the Progress of the Investigation and Risk Warning (No. 2022-019).

On March 15, 2022, the Company issued the Announcement on the Progress of the Investigation and Risk Warning (No. 2022-022).

On April 24, 2022, the Company and the relevant parties received the Prior Notice of Administrative Penalty . The Anhui Securities Regulatory Bureau of the CSRC decided to give a warning to and impose a fine on the Company and the relevant parties. Specific information is stated in the announcement (No. 2022-031) disclosed on CNINFO (www.cninfo.com.cn) and other designated media.

On April 27, 2022, the Company and the relevant parties received the official Decision of Administrative Penalty from the Anhui Securities Regulatory Bureau, which determines Offcn Edu, its subsidiaries Beijing Offcn Education Technology Co., Ltd. and Liaoning Zhongcheng Real Estate Development Co.,Ltd. constitute a related-party relationship with Shaanxi Guancheng Industrial Co., Ltd., Beijing Chuangsheng Construction Decoration Engineering Co., Ltd., Shanghai Beiding Network Technology Co., Ltd., Ji'an Jingkai Lixiangxue Financial Information Service Co., Ltd. and Liaoning Hanhui Industrial Co., Ltd.. The total amount involved in related transactions was RMB 1232.395 million yuan, including RMB 196.335 million yuan in year 2019 and

RMB 1036.060 million yuan in year 2020, which account for 6.65% and 30.19% of the net assets of Offcn Edu in the latest period respectively. The Company did not disclose the above-mentioned information in accordance with

relevant laws and regulations and there was a material omission of the Company’s information disclosure. A

warning was given to and a fine was imposed on the Company and the relevant persons responsible for the situation, and corresponding rectification is required. Specific information is stated in the announcement (No. 2022-032) disclosed by the Company on CNINFO (www.cninfo.com.cn) and other designated media for information disclosure.

Type of related -party transa ction
			Amount of related-party transactions in year 2019 (RMB)		Amount of related-party transactions in year 2021(RMB)
				Amount of related-party transactions in year 2020(RMB)
		Content of related-party transaction
	Related party					Total(RMB)
Accepti ng the entrust ment of related party for decorat ion	Beijing Chuangsheng Construction Decoration Engineering Co., Ltd.	Decoration fee	161,747,000.00	242,000,000.00	0.00	403,747,000.00
Accepti ng the transfer of assets from	Shaanxi Guancheng Industrial Co., Ltd.	Asset acquisition	0.00	383,060,000.00	0.00	383,060,000.00

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

related party
Accepti ng the transfer of assets from related party	Liaoning Hanhui Industrial Co., Ltd.	Asset acquisition	0.00	200,000,000.00	0.00	200,000,000.00
Purcha sing product s and goods from the related party	Ji'an Jingkai Lixiangxue Financial Information Service Co., Ltd. / Shanghai Beiding Network Technology Co., Ltd.	Commission fee	34,588,038.03	210,728,611.86	183,144,220.00	428,460,869.89
Total			196,335,038.03	1,035,788,611.86	183,144,220.00	1,415,267,869.89

Section IV. Quarterly financial statements

1. Financial statements

(1) Consolidated balance sheet

Company: Offcn Education Technology Co., Ltd.

March 31, 2022

		Unit: RMByuan BeginningBalance 1,970,361,272.64 346,726,621.74 40,374,842.27 1,438,350.00 219,501,061.83 36,959,129.80 2,615,361,278.28 7,058,993.55 46,850,364.40
Item	Closingbalance	BeginningBalance
Current assets:
Monetaryfunds	1,129,779,804.27	1,970,361,272.64
Settlement reserve
Lendings
Transactional financial assets	118,374,738.18	346,726,621.74
Derivative financial assets
Notes receivable
Accounts receivable	39,875,287.62	40,374,842.27
Receivables financing
Prepayments	1,238,102.00	1,438,350.00
Premium receivables
Accounts receivable reinsurance
Reserve for reinsurance receivable contracts
Other receivables	216,682,824.68	219,501,061.83
Inc: Interest receivables
Dividend receivables
Buyingback the sale of financial assets
Inventories
Contract assets
Assets held-for-sale
Non-current assets due within oneyear
Other current assets	22,946,171.86	36,959,129.80
Total current assets	1,528,896,928.61	2,615,361,278.28
Non-current assets
Loans and advances
Debt investments	10,000,000.00	7,058,993.55
Other debt investments
Long-term receivables
Long-term equityinvestments	46,850,364.40	46,850,364.40

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Other equityinvestments	130,400,000.00	130,400,000.00
Other non-current financial assets	30,260,000.00	30,260,000.00
Investmentproperties	639,856,778.18	644,936,541.46
Fixed assets	1,745,084,201.78	1,770,372,338.85
Construction inprogress	299,642,804.89	294,785,678.31
Productive biological assets
Oil andgas assets
Right-of-use assets	1,291,850,352.33	1,342,280,387.08
Intangible assetss	859,956,886.83	866,627,549.85
Development expenditure
Goodwill	99,867,720.38	99,867,720.38
Long-termprepaid expenses	357,228,216.77	380,191,006.38
Deferred tax assets	505,810,798.69	424,027,271.38
Other non-current assets	1,654,777,770.41	1,652,164,395.78
Total Non-current Assets	7,671,585,894.66	7,689,822,247.42
Total Assets	9,200,482,823.27	10,305,183,525.70
Current liabilities
Short-term loans	1,651,209,492.99	3,152,945,812.59
Borrowings from central bank
Borrowings from banks and other financial institutions
Transactional financial liabilities
Derivative financial liabilities
Notespayable
Accountspayable	269,216,168.97	282,032,916.52
Deposit received
Contract liabilities	4,034,759,242.27	3,063,721,290.28
Financial assets sold for repurchase
Absorbingdeposits and interbank deposits
Actingtradingsecurities
Actingunderwritingsecurities
Payrollpayable	357,995,173.17	422,886,856.60
Taxespayable	28,432,694.84	12,566,751.84
Otherpayable	100,409,049.33	129,043,599.22
Inc: Interestpayable
Dividendpayables
Fees and commissionspayable
Reinsurance accountspayable
Liabilities held-for-sale
Non-current liabilities due within oneyear	739,942,968.01	531,876,007.31
Other current liabilities	121,042,777.27	91,925,853.39
Total Current Liabilities	7,303,007,566.85	7,686,999,087.75
Non-current Liabilities:
Insurance contract reserve
Long-term loans
Bondspayable
Inc: Preferred share
Perpetual bond
Lease liabilities	379,061,479.40	635,691,184.87
Long-termpayables
Long-term salary payable
Estimated liabilities
Deferred income
Deferred tax liabilities	93,458,605.44	93,712,172.62
Other non-current liabilities
Total non-current liabilities	472,520,084.84	729,403,357.49
Total liabilities	7,775,527,651.69	8,416,402,445.24
Owners' equity:
Share capital	103,807,623.00	103,807,623.00
Other equityinstrument
Inc: Preferred shares
Perpetual bond
Capital reserve	1,225,481,049.50	1,225,481,049.50
Less: Treasurystock
Other comprehensive income	13,200,000.00	13,200,000.00

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Special reserves
Surplus reserves	45,000,000.00	45,000,000.00
General riskpreparation
Undistributedprofits	37,505,486.77	501,330,081.70
Total owners' equityattributable to theparent company	1,424,994,159.27	1,888,818,754.20
Minorityshareholders' equity	-38,987.69	-37,673.74
Total owners’ equity	1,424,955,171.58	1,888,781,080.46
Liabilities and owner's equity	9,200,482,823.27	10,305,183,525.70

Legal representative: Wang Zhendong Person in charge of accounting: Shi Lei Head of the accounting department: Luo Xue

(2) Consolidated income statement

Unit: RMB yuan

Item	Amount in the currentperiod	Amount in thepreviousperiod
I. Total operatingincome	1,212,740,311.93	2,051,691,383.47
Including: operatingincome	1,212,740,311.93	2,051,691,383.47
Interest income
Premium earned
Fee and commission income
II. Total operatingcosts	1,770,228,930.90	1,979,436,277.98
Inc:operatingcosts	749,351,241.84	824,615,510.04
Interest expenses
Fee and commission expenses
Surrender money
Net reimbursement expenditure
Withdrawal of net insurance liabilityreserves
Policyholder dividend expenses
Reinsurance expenses
Taxes and surcharges	8,798,438.13	3,125,104.09
Sales expenses	396,015,900.26	435,647,726.75
Management expenses	320,087,116.49	340,240,393.35
R&D expenses	226,404,752.90	267,150,553.55
Financial expenses	69,571,481.28	108,656,990.19
Inc: Interest expenses	34,754,941.56	52,090,565.27
Interest income	2,583,174.80	6,768,970.11
Add: other income	8,268,197.61	60,454,036.43
Investment income(Loss is listed with “-”)	2,755,592.22	32,350,483.88
Inc: investment income from associates and joint ventures
Derecognition income of financial assets measured at amortized cost
Exchange earnings(Loss is listed with “-”)
Net exposure hedge income(Loss is listed with “-”)
Fair value change income(Loss is listed with “-”)	2,674,975.31	12,156.21
Credit impairment loss(Loss is listed with “-”)	-1,005,625.25	-239,123.84
Asset impairment loss(Loss is listed with “-”)
Asset disposal income(Loss is listed with “-”)		56,256.12
III. Operating profit(Loss is listed with “-”)	-544,795,479.08	164,888,914.29
Add: non-operatingincome
Less: non-operatingexpenses	152,921.74	69,002.90
IV. Totalprofit(The total loss is listed with "-")	-544,948,400.82	164,819,911.39
Less: income tax expenses	-81,122,491.94	24,090,187.92
V. Netprofit(Net loss is listed with “-”)	-463,825,908.88	140,729,723.47
i. Classified bybusiness continuity
1. Net profit from continuing operations (Net loss is listed with “-”)
	-463,825,908.88	140,729,723.47
2. Net profit from discontinued operations (Net loss is listed with "-")
ii. Classification byownership
1. Net profit attributable to the owner of the parent company
	-463,824,594.93	140,729,639.84
2. Minorityshareholders'profits and losses	-1,313.95	83.63
VI. Net other comprehensive income
Net other comprehensive income attributable to the parent companyowner

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

i. Other comprehensive income that cannot be reclassified intoprofit or loss
1. Changes from the remeasurement of the defined benefitplan
2. Other comprehensive income that cannot be transferred toprofit or loss under the equitymethod
3. Changes in fair value of other equityinstruments
4. Changes in fair value of the Company's own credit risk
5. Other
ii. Other comprehensive income that will be reclassified into profit or loss
1. Other comprehensive income of convertible profit and loss under the equitymethod
2. Changes in fair value of other debt investments
3. Financial assets reclassified into other comprehensive income
4. Credit impairment provisions of other debt investment
5. Cash flow hedge reserve
6. Foreign currency financial statement translation difference
7. Others
Net other comprehensive income attributable to minority shareholders
VII. Total comprehensive income	-463,825,908.88	140,729,723.47
Total comprehensive income attributable to owners of the parent company
	-463,824,594.93	140,729,639.84
Total comprehensive income attributable to minority shareholders
	-1,313.95	83.63
VIII. Earningsper share:
i. Basic earningsper share	-0.08	0.02
ii. Diluted earningsper share	-0.08	0.02

If a business combination under the same control occurs in this period, the net profit realized by the combined party before the combination is RMB 0.00. The net profit realized by the combined party in the previous period was: RMB 0.00.

Legal representative: Wang Zhendong Person in charge of accounting: Shi Lei Head of the accounting department: Luo Xue (3) Consolidated cash flow statement

Unit: RMB yuan

Items	Amount in the currentperiod	Amount in thepreviousperiod
I. Cash flow from operatingactivities:
Cash received from the sale ofgoods and services	2,249,268,010.73	2,257,705,337.11
Net increase in customer deposits and interbank deposits
Net increase in borrowings from central bank
Net increase in funds borrowed from other financial institutions
Cash received from the original insurance contract premium
Net cash received from reinsurance business
Net increase in policyholders’ deposits and investment funds
Cash charged with interest, handling fees and commissions
Net increase in funds borrowed in
Net increase in repurchase funds
Net cash received from agent buying and selling of securities
Tax refund
Other cash received related to other business activities	22,063,195.70	8,365,632.60
Subtotal of cash inflow from operatingactivities	2,271,331,206.43	2,266,070,969.71
Cashpaid for thepurchase ofgoods and services	210,528,840.27	389,263,578.68
Net increase in customer loans and advances
Net increase in deposit of central bank and interbank

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

Cashpaid for the original insurance contract
Net increase in borrowed funds
Cashpaid for interest,handlingfees and commissions
Cashpaid forpolicydividends
Cashpaid to and for employees	1,224,818,887.78	1,788,537,241.10
Various taxespaid	25,331,722.29	81,728,859.56
Other cashpaid for business activities	211,762,694.36	253,266,164.04
Subtotal of cash outflows from operatingactivities	1,672,442,144.70	2,512,795,843.38
Net cash flow from operatingactivities	598,889,061.73	-246,724,873.67
II. Cash flows from investingactivities
Cash received from investment recovery	344,776,858.87	4,234,310,000.00
Cash received from investment income	2,764,585.77	11,192,589.09
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
		56,256.12
Net cash received from disposal of subsidiaries and other business units
Other cash received related to investment activities
Subtotal of cash inflows from investment activities	347,541,444.64	4,245,558,845.21
Cash paid for the purchase and construction of fixed assets,intangible assets and other long-term assets
	8,768,861.04	2,774,248,578.57
Cashpaid for investment	116,700,000.00	4,226,550,000.00
Net increase inpledge loans
Net cash paid for aquiring subsidiaries and other business units
Other cashpaid related to investment activities
Subtotal of cash outflows from investment activities	125,468,861.04	7,000,798,578.57
Net cash flows from investment activities	222,072,583.60	-2,755,239,733.36
III. Cash flow from financingactivities:
Cash received from investment absorption
Inc: Cash received from subsidiaries in absorbing minorityshareholders' investment
Cash received from the loan		2,670,000,000.00
Other cash received related to financingactivities
Subtotal of cash inflows from financingactivities		2,670,000,000.00
Cashpaid for debt repayment	1,500,000,000.00	2,090,000,000.00
Cashpaid for dividends, profits or interestpayments	26,787,416.64	46,324,162.51
Inc: Dividends and profits paid by subsidiaries to minority shareholders
Other cashpaid related to financingactivities	134,755,697.06	354,129,507.17
Subtotal of cash outflows from financingactivities	1,661,543,113.70	2,490,453,669.68
Net cash flow from financingactivities	-1,661,543,113.70	179,546,330.32
IV. Effect of the changes of the exchange rate on cash and the equivalents
V. Net increase in cash and cash equivalents	-840,581,468.37	-2,822,418,276.71
Add: balance of cash and cash equivalents at the beginningof theperiod
	1,969,806,009.56	5,950,395,089.12
VI. Balance of cash and cash equivalents at the end of the period
	1,129,224,541.19	3,127,976,812.41

2. Auditor’s report

Whether this First Quarter 2022 Report has been audited

□ Yes √ No

The Company’s First Quarter 2022 Report has not been audited.

Board of Directors of Offcn Educaton Technology Co. Ltd.

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OFFCN EDUCATION TECHNOLOGY CO., LTD. First Quarter 2022 Report

April 28, 2022

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