May 2020

OneSmart International Education Group Limited

FY20 Q2 Results Presentation

Section 1

Business Updates

3

Strong company response and results under the

unprecedented COVID-19 pandemic situation

Strong Company ResponseUnprecedented Impact

All of our learnings centers

have been temporarily closed

since January 2020

All public schools in China

have also been temporarily

closed without reopen

schedule being provided

All classes and customer

acquisitions conducted

through our online platform

during the last few months

All employees have been

working from home till late

April 2020

Majority of existing students were

successfully migrated online

within just a couple of weeks

since the outbreak (without price

discount incentive)

Our online platform has been

serving approx. 160,000 student

enrollments since February

2020, a massive increase from

just a few thousands in late 2019

Customer satisfaction rate on

online platform remained 90%+,

resulting in low refund rates

(2.3% in February) and high

renewal rates

Company Q2 revenue retained at

the level of same period last year

The speed, scale

and results prove

our strong ability

to strategically

manage and

operate a premium

online business

4

Impact is expected to be one-off and has a swift pattern

Premium K-12

1on1 Business

Impact Assessment Enrollments* Trend

Young Children

Education

Businesses

A swift drop in an environment when the

public schools are closed and there is

massive supply of free or low priced online

classes

Temporally challenging for us to deliver the

distinguished value of our premium education

services when students stay at home and the

score improvement demand is not as urgent

The demand is expected to return in a fast

fashion as schedules of most schools reopen

and all entrance exams in China are now fixed

Our young children education businesses

may have a slightly longer period of impact as

kindergartens and some primary schools will

reopen a few months after other public

schools, according to government policy

Expect Shanghai kindergartens to open soon

Revamped products and online acquisition

practices to handle the change

60

70

80

90

100

110

120

Jan Feb Mar Apr Mid-May

千

Monthly Average Enrollments

(‘000)

30

40

50

60

Jan Feb Mar Apr Mid-May

Monthly Average Enrollments

(‘000)

As of May 15, 2020, 54 of our VIP centers have reopened under government permission.

We expect that number to increase over the next few months

* Enrollments data exclude Huaying and pure online businesses

2020

2020

Pandemic, online only Learning Centers

+ Online

Pandemic, online only

5

Penetrating markets in various provincial capitals and regional center cities with localized teaching and academic research methods

Technology development including CTS (Cloud Teaching System) 6.0: over 12 years experience on middle/back-end platform technology/data/content

OMO triple teachers (cloud teacher, cloud study keeper and cloud advisor) ensures high quality teacher, high quality learning experience and high quality services

Comprehensive product mix including big class, small group class and 1-on-1 creates synergies and extend customer lifetime value

精锐在线的目标——中国最大的中高端在线学习平台

Its OMO Model Effectively Reduces Cost of Acquisitions, Improves Customer

Loyalty and Provide Localized Curriculum Development

Offline acquisition of customer through Learning Centers and AI centers;

Multiple online marketing channels as well as Private traffic pool

OneSmart Online, the leading online premium education platform

in China, is built on distinguished competitive advantages

6

• We will focus on offline learning centers in top 10 cities where services is emphasized and OneSmart Online will serve as complementary offerings to meet the needs of cost-efficient demand and convenience

• OneSmart Online will serve as main growth driver to rapidly gain market share in tier 2 and tier 3 cities through AI cloud centers, multiple online marketing channels and private traffic pool.

• Online class delivery：cloud teacher + cloud study keeper + AI data driven

一线城市Incremental Driver in Top 10 Cities and Main Growth Driver in Tier 2 & 3 Cities

Student Enrollments Increased by 370% Over Three Months

3,628

13,288

0

5,000

10,000

15,000

2020.2 2020.5

Pure Online Student Enrollments (Excluding promotion classes)

OneSmart Online is delivering strong momentum in customer

acquisitions

7

OMO获客及私域流量运营

AI Cloud Center

Private Traffic

Pool

Traffic Gathering and Referral

User Referral

Subscription account, personal

account, mini program, APP

Platform operation, social

community referral, cross-sell

from CRM

Traffic from Both Online and Offline Channels

OneSmart

Online

APP

Online Teaching and Services

Acquisition cost is well managed thanks to our OMO model and

private traffic pool built previously

8

在线产品持续升级

OneSmart Online 1-1

Triple teachers

Fulltime teachers, localized teaching and development

platform, personalized teaching

Smart Online Teaching and Development Platform

Smart Online Teaching Preparation Platform

Live Broadcasting Cloud Classroom

－ Six steps teaching method

－ Interactive teaching

－ Data collection

Smart Administration System

Smart Service System

Active tracking and feedbacks, study

clubs/ seminars, family education cloud

courses

CRM

Smart Assessment System

Customized teaching program,

personalized academic planning, intelligent

matching with cloud teachers

APP Technology + Content

－ “Zero distance” between home

and school

－Smart error track book

－Student performance track

Classes are delivered on our latest advanced version of online

teaching system: CTS 6.0

9

VIP

OMO

Op

era

tio

n S

up

port

Marketing

Center

Customer

Center

CRM Marketing, UPC Operation, LMS Teaching, IMES Assessment

Teaching &

Research Center

Big Data

Computing

Data Service

User Profile

Happy MathFasTrack

EnglishOnline Young

Children Education

Online Middle

SchoolInternational

Education

Trading Center Service Center

Teaching

Center

Assessment

Center

Live broadcasting

Center

Customer

Satisfaction Center

Data

Visualization

Fro

nt-

en

d B

usin

ess

OnlineOffline

Data Center

Business Middle-end Platform Data Middle-end Platform

System

Monitor

Cyber

Monitor

Security

CI/CD

Ba

ck-e

nd

Mid

dle

-end

Fro

nt-

en

d

Support

Support

AIVoice

Recognition NLP

Image

RecognitionText Analysis

BigData

Spark Hadoop/Hbase/Hive

Kyligence Flink/Storm

CloudMicro-

serviceK8S/Docker/ELK

Cache MQ/RDS/CDN

OneSmart System Structure

Te

ch

nic

al S

up

po

rt

OneSmart Online is built on solid foundation of middle and back-end

Data, Content & Technology

Section 2

Financial Highlights

11

Key highlights for the second fiscal quarter of FY20

Retained the vast majority of revenue yoy, by converting students online

Serving approx. 160,000 enrollments online since the outbreak of COVID-19

OneSmart Online is well-positioned to generate incremental growth

1. Revenue

2. Margin

Business gradually returns to normal level starting May 2020 as public

schools and our learning centers started to reopen, and entrance exams are

fixed in July 2020; OneSmart Online drives strong incremental growth

3. Outlook

Key Highlights

GPM pressure mainly due to one-off revenue drop due to COVID-19 impact, coupled with previous quarter’s added teacher cost to improve online offerings, and increased rental costs to comply with new regulatory requirements

OPM pressure due to 1) one-off revenue drop; 2) increased R&D spending

Expect margin will start to expand in FY21

12

117 117

224 231

FQ22019

FQ22020

H12019

H12020

747 685 1,233 1,286

FQ22019

FQ22020

H1 2019H1 2020

HappyMath

2,058

2,863

3,994

FY2017 FY2018 FY2019

Net Revenues OneSmart VIP

RMB MM

RMB MM

+55.7%RMB MM

+31.2%

CAGR

CAGR

943

886

1,589 1,683

FQ2 2019FQ2 2020 H1 2019 H1 2020

+5.9%

Growth

-6.0%

Growth 212

359

FY2017 FY2018 FY2019

+39.3%

CAGR

Top-line growth in the three business segments

FasTrack English

1,840 2,416

FY2017 FY2018 FY2019

73

192

FY2017 FY2018 FY2019

RMB MM

39 51 71 100

FQ22019

FQ22020

H12019

H12020

+30.2%

Growth

Fiscal years ended August 31 and fiscal quarters ended February

3,168

514

+4.3%

Growth

+3.1%

Growth

+40.9%

Growth

-8.4%

Growth

-0.6%

Growth

13

3,603 3,351

6,104 6,327

770 875

1,496 1,701

321 341

583 717

391 330

391

678

FQ22019

FQ22020

H1 2019 H1 2020

8,711

11,744

13,312 12,991 13,316

FY2017 FY2018 FY2019 FQ2 2019 FQ2 2020

Operating metrics

+43.6%

CAGR

Average Monthly Enrollments

Consumed Class Units

Number of Classrooms

+23.6%

CAGR

9,611 12,384

15,590

1,601

2,680

3,639

1,466

FY2017 FY2018 FY2019

15,497

11,212

1,506

22,202

OneSmart VIP Happy Math FasTrack English Others

OneSmart VIP Happy Math FasTrack English Others

+8.3%

Growth

+40.7%

CAGR

(in thousand)

433

ASPRMB per class unit

-2.4%

Growth

-1.5%

Growth

-12.5%

Growth

Note

1.The decrease of ASP of HappyMath is mainly due to 1) the fact that we entered into more cities outside Shanghai in

which we adopted lower pricing policies; 2) launch of short term promotional classes as a new marketing campaign

Company Happy MathVIP

5,084

8,574

+2.5%

Growth

185 181

207 204

152 133

123

150

FQ22019

FQ22020

FQ22019

FQ22020

FQ22019

FQ22020

FQ22019

FQ22020

63,295

85,830 99,226

13,545

18,884

27,024 7,431

15,934

16,162

FY 2017 FY 2018 FY 2019

112,145

76,841

97,253

105,251

90,892101,473

26,009 27,530

25,906

27,749

17,033

22,961

15,104

21,734 15,876

13,426

17,377

14169

FQ22019

FQ22020

H1 2019 H1 2020

156,171169,168

158,346

149,279

+22.4%

Growth

FasTrack English

+10.6%

Growth

165,125

4,898

9,424

+9.9%

Growth

-3.7%

Growth

14

Gross Profit and Gross Margin(1)

Gross margin

RMB MM

48.1%51.3%

935

1,224

1,558

126

203

263

73

FY2017 FY2018 FY2019

26

49.5% 45.7%

FY

2017

FY

2018

FY

2019

FQ2

2019

FQ2

2020

OneSmart VIP 50.8% 50.6% 49.2% 50.2% 41.0%

HappyMath 59.6% 56.5% 51.1% 57.4% 38.7%

FasTrack

EnglishNA 35.5% 38.2% 30.2% 35.2%

Others (101.3%) (20.9%) 22.5% 32.0% 37.0%

Overall Gross

Margin51.3% 50.6% 48.1% 49.5% 40.2%

Gross Margin by Segments

50.6%

Notes

1. Fiscal years ended August 31 and second fiscal quarters ended February 29, 2020

The decrease of gross margin was mainly due to one-off

revenue drop caused by the impact of COVID-19 as all of our

offline learning centers were temporarily shutdown as required

by the government, coupled with previous quarter’s added

teacher cost to improve online offerings, and increased rental

costs to comply with regulatory requirements

375

281

570505

67

45

124

85

12

18

19

28

12

12

15

18

FQ22019

FQ22020

H12019

H12020

40.2% 37.9%

OneSmart VIP Happy Math FasTrack English Others

15

28.6%

34.7%30.5%

35.8%

11.7%

14.4%

13.0%

15.1%3.9%

5.5%

4.3%

5.5%

6.3%

5.3%

6.5%

5.8%

FQ2 2019 FQ2 2020 H1 2019 H1 2020

62.1%

30.8% 30.5% 31.1%

9.0% 9.9%11.1%

2.6% 3.0%3.6%

6.3% 5.9%

6.1%

FY2017 FY2018 FY2019

Cost structure

51.9%48.7% 49.4%

Staff costs Rental costs

Depreciation and amortization Other costs

50.5% 54.3%Total Cost % of Net Revenue: 59.8%

16

Non-GAAP Selling & Marketing Expenses as % of

Revenues(1)

Non-GAAP General & Administrative Expenses as

% of Revenues(1)

Selling & marketing expenses, and G&A expenses

20.2%17.4% 16.9%20.4%17.9% 20.6%

RMB MM RMB MM

191 197

357 391

FQ22019

FQ22020

H12019

H12020

357

485

806

FY2017 FY2018 FY2019

173 178

310 351

FQ22019

FQ22020

H12019

H12020

Q2 G&A expenses increase was mainly due to increased R&D

expenses to support development of OneSmart Online

20.3% 22.5% 18.3% 19.5%

368

588

816

FY2017 FY2018 FY2019

22.2% 23.3% 20.1% 20.8%

Notes1.Excluding share-based compensation expenses

The increase of Q2 marketing expenses % of revenue was

mainly due to 1) revenue drop; 2) increased % spending in

online channels during the pandemic situation

17

102 (18) 59 (105)

FQ22019

FQ22020

1H 20191H 2020

330 376

300

FY2017 FY2018 FY2019

305

229 229

FY2017 FY2018 FY2019

90 (55)

29 (169)

FQ22019

FQ22020

1H2019

1H2020

Operating margin

Operating Income (Loss) and Operating Margin Non-GAAP Operating Income (Loss) and Operating Margin (2)

Net Income (Loss) and Net Income (Loss) Margin (1)Non-GAAP Net Income (Loss) and Net Income (Loss)

Margin (1) (2)

RMB MM

Notes1. Net income attributable to OneSmart; 2. Excluding share-based compensation expenses

7.5%16.0% 13.1%5.7%

259

246 245

FY2017 FY2018 FY2019

14.8% 8.0%

6.1%12.6% 8.6%

284

392

317

FY2017 FY2018 FY2019

7.9%13.8% 13.7% 5.0%

65 (16) 49 (106)

FQ22019

FQ22020

H12019

H12020

77 20

79 (42)

FQ22019

FQ22020

H1 2019 H1 2020

6.9% 3.1% 8.2%

9.6% 1.8% 3.7%10.9%

The decrease of margin was mainly due to one-off revenue drop due

to the impact of COVID-19. We expect margin will return to normal

level and start to expand in FY21.

-6.2% -10.1% -2.0% -6.2%

-1.8% -6.3% 2.3% -2.5%

18

Operating cash, Capex and cash balance

Prepayments from Customers Cash and Cash Equivalents and Short-term Investments

RMB MM RMB MM

1,531

1,992 2,171

1,970

2,386

FY2017 FY2018 FY2019 FQ2 2019 FQ2 2020

173 242

284

FY2017 FY2018 FY2019

Operating Cash Flows Capex and Capex as a % of net revenues

RMB MM

8.4% 8.5% 7.1%

773 867

345

FY2017 FY2018 FY2019

(140) (7) (263) 7

FQ22019

FQ22020

1H2019

1H2020

91 68

171 158

FQ2 2019FQ2 2020 H1 2019 H1 2020

10.8%9.6%

1,396

2,227

1,841

1,065

1,492

FY2017 FY2018 FY2019 FQ2 2019 FQ2 2020

7.7% 9.4%

Thank You