Felix Liu: Steve, my follow-up question is on your learning center network. I noticed you opened two centers in this quarter. So I think that’s a good step forward, although a small step. Could you share some color on your expansion outlook from here, maybe this year and next year?
Stephen Yang: Okay. I think in the rest of this fiscal year, I think we have no big plan to set up new learning centers. I think the learning center number will be stabilized because we invest a lot on OMO system in last — in past so many years and we moved a lot of costs from the offline to online. So it’s safety classroom the areas. And also — and we changed some of the traditional business classroom areas to the new businesses. So this is the internal change. And the next year, we do hope we open more learning centers. And — but so far, I think it’s too early to say how many learning centers we set up for the new year because we have not finished the new year budget. I think I want to share with you the new learning center expansion plan next quarter next quarter earnings call.
Operator: Thank you. Our next question comes from the line of .
Unidentified Analyst: Steve and my question is about the ratio on teachers to students. Could you share some color on the T2 student ratio on each learning service segment? And do you have more plan to recruit more teachers in the next 2 years?
Stephen Yang: I can share with you the teachers number. By the end of this quarter, we have the 26,000 teachers in total. And because we started a new business just since the last year. So I think it’s too early to like calculate the teachers to student ratio. I think maybe next quarter, in the new year, we’ll disclose the ratio. And yes, we — I think we are hiring new teachers because we started with new businesses. And for some non-academic courses, or the other new business, we do need to hire more teachers. And — but the key is we want to hire more 2 more teachers. So we care more about the utilization and the efficiency of the whole company. So I think we believe we will keep the higher utilization and the higher the operation efficiency for the whole company in the future.
Operator: We’ll now move on to our next question. Our next question comes from the line of D.S. Kim from JPMorgan.
Unidentified Analyst: Happy New Year and congrats on your strong results. I actually just have one quick follow-up question on all your comments regarding margins. Can I ask how much of corporate over had post what we expect at this stage, i.e., I remember corporate overhead used to be like high single digit is of revenue redouble reduction policy like a few years back. But given much smaller or reasonably smaller revenue base now, I’m wondering how much of overhead we should model and expect for this year either as a percentage of revenue or other term would be appreciated.
Stephen Yang: Yes. But I think since the last year, we would cut off some fixed cost and expenses in the headquarters. So I think the headquarters expenses as a percentage of the total revenue will be stabilized and roughly 6% to 7% of total revenue; this is the total expense from .
Unidentified Analyst: That’s a very impressive and great margin guidance. If I may follow up, again, on all your comments on the expansion plan, I don’t want to ask too much about the number of learning centers. But may I check for non-subject tutoring classes, like where do we see incremental demand opportunity, say, top-tier cities, top 10 cities versus the rest of the nation. Like where do you see stronger demand? And where do you think we will open more store more centers in terms of the geographical exposure? And that’s all for me.
Stephen Yang: I think the new business development in the top-tier cities is a little bit better than the loss. And this is — we have seen in the past quarters. And — but I do believe the — even in some low-tier cities, I think they will catch up because they started the business a little bit slower than the top cities. And so in almost everywhere, we are seeing the business opportunities for the admin courses, almost everywhere. And yes, that’s all.
Unidentified Analyst: Capacity?
Stephen Yang: Yes. As I said, now we don’t have the classic expansion plan. And we just want to keep the same learning center numbers at the next quarter or even for the — until the end of this fiscal year. And next year, maybe we’ll spend — we will extend some new learning centers. But so far, we don’t — we haven’t finished the next year budget. I will share with you the numbers next quarter next quarter, okay?
Unidentified Analyst: Thank you.
Operator: We’ll now move on to our next question. Our next question comes from the line of Ken Wang from CICC.
Unidentified Analyst: Steven, I have a follow-up question. I noticed that there’s a significant increase in non-academic enrollments in Q2. Would you like to specify the driver behind? And do we have any target for the enrollments during the whole year?
Stephen Yang: I think the market is always there. And we do have the famous brands and we do have the teachers. And yes, we started the business just a year ago that you saw the numbers. And the exciting news for us is that the profitable of the new business is exciting. It’s much better than expected. And for the new business, I do believe in the rest of this fiscal year, the new business, the revenue growth will be accelerated again. And even for the next new year, fiscal year 2024, I would believe the business of the new — the revenue growth of the new business will be high yes. So we’re optimistic about the non-academic tutoring business.
Sisi Zhao: Yes. And by the way, the non-academic tutoring business, according to our experience in the last several quarters, we think that its seasonality is not that apparent as some other test prep business. So every quarter, probably the enrollments will be relatively stable if you do the Q-on-Q comparison. And also as new business development in all the local cities, probably you can see strong momentum. As we have seen that Q2’s growth or the enrollment trends are also similar or even better than Q1.
Unidentified Analyst: Yes. Yes, I see. That’s very clear.
Operator: We have a follow-up question from the line of .