2019Q2INVESTOR PRESENTATION

Puxin Limited

Successful Consolidator Of The After-school Education Industry In China

AUG 2019

1

Safe Harbor Statement

This presentation contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended,

and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will”, “expects”,

“anticipates”, “future”, “intends”, “plans”, “believes”, “estimates”, “confident” and similar statements. The Company may also make written or oral forward-looking

statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other

written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including

statements about the Company’s beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual

results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: its goals and strategies, its

ability to achieve and maintain profitability, its ability to attract and retain students to enroll in its courses, its ability to effectively manage its business expansion and

successfully integrate businesses it acquired, its ability to identify or pursue targets for acquisitions, its ability to compete effectively against its competitors, its ability

to improve the content of its existing courses or to develop new courses, and relevant government policies and regulations relating to the Company’s corporate

structure, business and industry. Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange

Commission. All information provided in this presentation is current as of the date of the press release, and the Company does not undertake any obligation to

update such information, except as required under applicable law.

2

Agenda

• Q2 2019 Operational and Financial Highlights

• Company Overview

• After-school Education Market Overview

• Appendix

敦兮若朴敝而新成

3

519,962

725,118

2018Q2 2019Q2

Total Enrollments

YoY: 39.5%

4

62.2%

71.4%

2018Q2 2019Q2

Student Retention Rate

YoY: 9.2PP

Operational Highlights

5

(in RMB thousands)

531,304

632,922

2018Q2 2019Q2

Net Revenues

YoY: 19.1%

388 398

2018Q2 2019Q2

Number of Learning centers

Operational Highlights

6

Financial Highlights

7

(in RMB thousands)

242,722

300,094

2018Q2 2019Q2

Gross Profit

YoY: 23.6%

Financial Highlights

(in RMB thousands)

45.7%

47.4%

2018Q2 2019Q2

Gross Margin

YoY: 1.7PP

8

(in RMB thousands)

(86,050)

(168,708)

2018Q2 2019Q2

Operating Loss

YoY: 96.1%

(in RMB thousands)

(60,994)

(53,339)

2018Q2 2019Q2

Adjusted Operating Loss

YoY: 12.6%

Financial Highlights

9

(in RMB thousands)

(156,240)

(159,787)

2018Q2 2019Q2

EBITDA

YoY: 2.3%

(in RMB thousands)

(38,699)

(25,801)

2018Q2 2019Q2

Adjusted EBITDA

YoY: 33.3%

Financial Highlights

531.3 669.7

531.4 615.7 632.9

2Q18 3Q18 4Q18 1Q19 2Q19

242.7 295.1

225.2 280.1 300.1

2Q18 3Q18 4Q18 1Q19 2Q19

• 2Q Revenue RMB632.9 million

– Grew 19.1% Y/Y and 2.8% Q/Q

• 2Q Gross Profit RMB300.1 million

– Grew 23.6% Y/Y and 7.1% Q/Q

– 47.4% gross margin

• 2Q Adjusted EBITDA RMB(25.8) million

– Grew 33.3% Y/Y

19.1% Revenue Growth and 33.3% Adjusted EBITDA Growth Y/Y in 2Q 2019

Gross Profit and Margin

45.7% 44.1% 42.4% 45.5% 47.4%

(RMB millions)

Revenue

(RMB millions) ▲ 19.1%Y/Y

▲ 23.6% Y/Y

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• 2Q Total Enrollments: 725,118

– Grew 39.5% Y/Y

• 2Q Student Retention Rate 71.4%

– Grew 9.2PP Y/Y

39.5% Enrollments Growth and 9.2PP Retention Rate Growth Y/Y in 2Q 2019

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520.0 544.3 521.2 402.1

725.1

2Q18 3Q18 4Q18 1Q19 2Q19

(thousands)▲ 39.5%Y/Y

388 386 386

390

398

2Q18 3Q18 4Q18 1Q19 2Q19

Number of Learning Centers

Enrollments

12

(in RMB thousands)

Case Study

Net Revenue 2018H1 2019H1 H/H

School A 11,955 16,248

School B 26,237 34,250

School C 26,393 33,019

School D 22,448 29,366

School E 12,005 16,371

School F 30,312 48,707 60.7%

36.4%

30.8%

25.1%

30.5%

35.9%

OP Income 2018H1 2019H1 H/H

School A (828) 1,495

School B 7,858 12,388

School C 88 6,362

School D 2,575 7,901

School E 1,820 5,317

School F (998) 5,435 644.6%

192.1%

206.8%

7129.5%

57.6%

280.6%

Agenda

• Q2 2019 Operational and Financial Highlights

• Company Overview

• After-school Education Market Overview

• Appendix

敦兮若朴敝而新成

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Experienced Leadership

Peng Wang

Chief Financial Officer

✓ 15 years’ experience in education industry

✓ Senior vice president at China Hi-Tech Group Co. Ltd. From 2016 to 2017

✓ Principal of a school under New Oriental (NYSE: EDU) from 2010 to 2016

✓ Doctor’s degree in economics from Renmin University of China

Yunlong Sha

Founder, Chairman, and Chief Executive Officer

✓ 21 years’ experience in education industry

✓ Senior vice president and various managerial positions at New Oriental (NYSE: EDU) from

2001 to 2014

✓ EMBA degree from Cheung Kong Graduate School of Business and bachelor’s degree in law

from Renmin University of China

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Who We Are – Successful AST Consolidator in China

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Founded in 2014, with 54 acquired schools and 398 learning centers in 35 cities

The third largest after-school education services provider in China

Total enrollments were 725,118, an increase of 39.5% YoY in 2019Q2

Clear corporate strategy & vision and effective execution that attract high-quality talents to join

Puxin Business System (PBS), a unique modular management system that incorporates best practices of

operating after-school learning centers, creates high entry barriers for competitors

Experienced management team with 16+ years of experience in China’s education industry

Selective teacher hiring process with an emphasis on continual training and rigorous evaluation for teachers

① Source: Frost & Sullivan

①

Strong acquisition capability

- Standard and efficient selection process

- Successful track records

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Excellent integration capability

- Integration starts in the due diligence stage

- Completion of the standardization process in a short time

- Sufficient reserve of talents

Market consolidation opportunities

- Leaders experienced faster growth than the industry

- Plenty of valuable small institutions face operation difficulties and

want to exit

Synergies to drive

the growth

Good reputation

attractive to institutions

with intention to sell their

businesses

Puxin’s Business Model

Providing Comprehensive Education Services

What We Do

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Our portfolio brands

Agenda

• Q2 2019 Operational and Financial Highlights

• Company Overview

• After-school Education Market Overview

• Appendix

敦兮若朴敝而新成

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Source: Frost & Sullivan

19

Large Addressable Market with Healthy Growth

251284

321

364

411

465

511

562

617

678

745

2012 2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E

After-School K-12 Tutoring Market Size (Rmb bn)

1315

1821

25

29

34

39

45

52

60

2012 2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E

Study-Abroad Test Prep And Consulting Services Market Size (Rmb bn)

10,000

1,000

Annual revenue (Rmb mn)

100

10

No. of organizations5 60 600

Nationwide presence,

Over Rmb1bn annual revenue,

Less than 5% of market share

Provincial-level leaders,

100-1,500mn annual

revenue

City-level leaders,

30-150mn annual revenue

Small-scale tutoring institutions,

Less than 30mn annual revenue,

Over 10,000 in China

20Source: Company Estimate

The highly fragmented market promises opportunities for consolidation

High Degree of Fragmentation Presents Opportunity

Common Problems Faced By Small-Scale Institutions

Low customer lifetime value

Lack of diversity for recruitment channels

Weak R&D capabilities

Limited room for team development

No experience in competing against national leaders

Solutions By Puxin

Raising retention rate

Diversifying channels via online-offline integration

Systematizing product development

Creating ample room for development via centralized

management and planning for nationwide expansion

Centralized expertise sharing in teaching, marketing,

school management, etc.

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Standardized Solution for Acquired Institutions

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Typical Path of A Turnaround

PUXIANPositive Talent

Development

PUYOU PUXING

Principal Selection Training

Institute

• Top talent training plan

• 9 months per session

• Theory + practice

• 13 sessions delivered

• Middle-level management training

• Various lines of training

• Selection every 6 months

• Training for front-line staff

and management trainee

• Talent exploration plan

• Selection every 3 months

• Tiered talent management

• Veteran management leading

new schools

• New management leading

established schools

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Education Expertise-Oriented Talent System

Agenda

• Q2 2019 Operational and Financial Highlights

• Company Overview

• After-school Education Market Overview

• Appendix

敦兮若朴敝而新成

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As of December 31, 2018 As of June 30, 2019

RMB’000 RMB’000 USD’000

Current assets

Cash and cash equivalents 778,006 500,556 72,914

Restricted Cash, current portion - 344,700 50,211

Inventories 9,659 11,280 1,643

Prepaid expenses and other current assets 128,638 98,639 14,368

Total current assets 916,303 955,175 139,136

Non-current assets

Restricted cash, non-current portion 40,971 39,141 5,701

Operating lease right-of-use assets - 804,322 117,163

Property, plant and equipment, net 248,801 270,933 39,466

Intangible assets 218,978 210,309 30,635

Goodwill 1,243,817 1,358,165 197,839

Deferred tax assets 3,456 1,478 215

Rental deposit 64,693 64,765 9,434

Other non-current assets - 34,000 4,953

Total non-current assets 1,820,716 2,783,113 405,406

Total assets 2,737,019 3,738,288 544,542

Liabilities and shareholders’ liabilities

Current liabilities

Accrued expenses and other current liabilities 515,623 766,598 111,669

Income taxes payable 15,755 12,131 1,767

Deferred revenues, current portion 876,861 1,011,142 147,289

Operating lease liabilities, current portion - 225,249 32,811

Amounts due to related parties 54,493 22,898 3,335

Bank borrowing 106,600 353,900 51,551

Promissory notes, current portion 361,888 171,625 25,000

Total current liabilities 1,931,220 2,563,543 373,422

Consolidated Balance Sheet

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As of December 31, 2018 As of June 30, 2019

RMB’000 RMB’000 USD’000

Non-current liabilities

Deferred revenue, non-current portion 121,191 110,939 16,160

Operating lease liabilities, non-current portion - 516,397 75,222

Deferred tax liabilities 71,031 68,637 9,998

Franchise deposits 1,763 1,873 273

Derivative liabilities 63,942 164,279 23,930

Total non-current liabilities 257,927 862,125 125,583

Total liabilities 2,189,147 3,425,668 499,005

Shareholders’ equity:

Ordinary shares 62 62 9

Additional paid-in capital 1,944,325 2,154,533 313,843

Statutory reserve 4,595 4,595 669

Accumulated other comprehensive income 68,214 66,133 9,633

Accumulated deficits (1,469,303) (1,912,718) (278,619)

Total Puxin Limited shareholders’ equity 547,893 312,605 45,535

Non-controlling interests (21) 15 2

TOTAL SHAREHOLDERS’ EQUITY 547,872 312,620 45,537

TOTAL LIABILITIES AND TOTAL SHAREHOLDERS’ EQUITY 2,737,019 3,738,288 544,542

Consolidated Balance Sheet (Cont’d)

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2018Q2 2019Q2

RMB’000 RMB’000 USD’000

Net Revenues 531,304 632,922 92,195

Cost of revenues 288,582 332,828 48,482

Gross profit 242,722 300,094 43,713

Operating expenses:

Selling Expenses 210,025 241,739 35,213

General and administrative expenses 118,747 227,063 33,075

Total operating expenses 328,772 468,802 68,288

Operating loss (86,050) (168,708) (24,575)

Interest expense 12,606 10,193 1,485

Interest income 181 4,144 604

Foreign exchange gain - 179 26

Loss on changes in fair value of convertible notes, derivative liabilities and warrants 92,485 18,617 2,712

Gain on disposal of subsidiary 93 - -

Loss before income taxes (190,867) (193,195) (28,142)

Income tax (benefits) expenses (2,476) 1,424 207

Net loss (188,391) (194,619) (28,349)

Less: Net attributable to non-controlling interest 19 18 3

Net loss attributable to Puxin Limited (188,410) (194,637) (28,352)

Net loss per ADS attributable to Puxin Limited, Basic and diluted (2.88) (2.28) (0.34)

Weighted average shares used in calculating basic and diluted net loss per share 130,533,721 170,511,022 170,511,022

Consolidated Income Statement

Note: In thousands of RMB and USD, except for share, per ADS data

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T h a n k Y o u

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