Stephen Yang: I think, yes, we – in this quarter, we made to the investor company in loss in this quarter. So it – I think we do have a onetime impact on the very bottom line this quarter. I think all those two companies was negatively impacted by the deduction policy 2.5 years ago. And – but this is one time. It’s not – it’s just a onetime. Yes.
Chongguang Feng: Thank you. Just a follow-up question about the – also, we saw less investment interest this quarter Q-on-Q. So I’m just wondering the reason.
Stephen Yang: I’m sorry, can you repeat again? Do you less than what?
Chongguang Feng: Yes, as you saw less other income, which I suppose is mainly our investment interest this quarter only decreased.
Stephen Yang: Yes. The – I think the interest rate in China, you know, it has been down in this quarter. And so it will – I think it impacts some interest income.
Sisi Zhao: Actually, the interest income is – the absolute dollar number are similar with previous one to two quarters.
Stephen Yang: Yes.
Sisi Zhao: So it’s pretty stable.
Chongguang Feng: Understood. Thank you, Stephen and Sisi. Congrats on the results again.
Stephen Yang: Thank you.
Operator: [Operator Instructions] All right, we are now approaching the end of the conference call. And we do have one more question from DS Kim from JPMorgan. Please ask your question, DS Kim.
DS Kim: Hello, sir. Good evening and congrats on amazing top line growth again. Actually, I wanted to ask about margins and expansion. I think you’re right to discuss all of that. So just wanted to follow up on one small thing if that’s okay. You mentioned earlier, that new center expansions are now could be a margin accretive because it’s primarily expansion of the existing center. But if we only look at, say, newly opened location, newly opened centers for non-academic courses, how long do you think – how long does it take for those new centers to hit breakeven and then to ramp up to the full level on the center level? I think back in the days, it took about a year to turn breakeven for the new learning center K-12 AST and another a couple of more quarters to fully ramp up, and I’m wondering how this has changed now versus now that the courses has changed primarily for non-academic?
Stephen Yang: I think now, typically, on average, it will take the six months to get a breakeven point for the new work, that means went up the learning centers even more faster. And so in the second year, typically, the margin of the new learning centers depends on the different areas. I think the margins of that new learning centers to get somewhere around 15% to 20%. So it’s much better. That’s why we make the decision to raise the learning center expansion guidance by 30%. And so I think it’s a good trade off. This round – in this quarter and next – in Q3, Q4, even for the whole year in fiscal year 2024, we opened more learnings center, 30%, but it will drive the top line growth up in the new fiscal year 2025. And I believe that for the whole business education business, the whole margin of the education business will be improved in the fiscal year 2024 because of the better utilization and the higher student retention.
DS Kim: Thank you, sir. I think it’s not just good, it’s amazing trade-off to have. But if I may follow-up here, like do you think that faster ramp-up or faster breakeven is just a timing thing, earlier recovery or earlier ramp-up in utilization and/or do you think that even after the ramp up, the ultimate level of center level margin can be actually higher than the back end the days, the academic, i.e., like on a central level, do you think that five years down the road, some of the non-academic centers can make more than 20% margins better than the K-9 academic of the past or just the timing is all there.
Stephen Yang: Both, yes, as I said, it will take the shorter time to get the breakeven point. This is number one. And number two is theoretically, I think the ultimate for the margin of the new learning centers, I think will be a little bit higher than a couple of years ago, so it’s a good trade-off for us to open more learning centers for non-academic courses or even for the overseas related business.
DS Kim: Sure, sir. It’s an amazing trend and congrats again. Thank you.
Stephen Yang: Thank you.
Operator: Thank you, DS. We have now approached the end of the conference call. I’ll now turn the call over to New Oriental’s Executive President and CFO, Stephen Yang for his closing remarks.
Stephen Yang: Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you.
Operator: Thank you. That concludes today’s conference call. Thank you for participating. You may now disconnect.
