Breaking Down China Liberal Education Holdings Limited (CLEU) Financial Health: Key Insights for Investors

You're looking at China Liberal Education Holdings Limited (CLEU) and trying to figure out if the financial picture warrants a deeper dive, especially with the volatile nature of China's education sector. Honestly, the latest reported financials for the first six months of fiscal year 2024 show a stark contrast: revenue dropped to just $0.89 million, a 34.8% year-over-year decline, which translated into a net loss of $4.72 million, a sharp reversal from the prior year's small profit. Here's the quick math: the business is shrinking, but the company's balance sheet still held a significant cash position of $84.15 million as of June 30, 2024, which is a defintely strong liquidity buffer. But still, you can't ignore the near-term operational risk; the stock faced a 1-for-80 reverse split in March 2025 and was suspended from Nasdaq trading in June 2025 due to compliance issues, specifically a delinquent annual report filing for FY2024. We need to map out if that cash pile is a war chest for a genuine pivot or just a slow burn against a backdrop of regulatory and market challenges.

Revenue Analysis

You need to know the core truth about China Liberal Education Holdings Limited (CLEU)'s top line right now: revenue is in a steep decline, but the underlying business mix is shifting dramatically. The Trailing Twelve Months (TTM) revenue, as of mid-2024, stood at approximately $2.41 million, reflecting a sharp year-over-year contraction of about 46.71%.

This isn't a simple market slowdown; it's a structural shift. The company is actively moving away from certain volatile projects, which is the main driver of the revenue drop. The good news is the gross margin is holding up, even improving, which tells a more nuanced story about the profitability of their core offerings.

Breakdown of Primary Revenue Sources

China Liberal Education Holdings Limited operates across five key segments in the China market, but their revenue contribution has seen a major shakeup. The primary sources of income are now centered on stable, recurring services after a major strategic pivot.

• Tailored Job Readiness Training Services: This is the backbone of their income, providing a relatively stable revenue stream.
• Textbooks and Course Material Sales: This segment has shown a recent resurgence in revenue, which is a positive sign for a product-based stream.
• Sino-foreign Jointly Managed Academic Programs: A consistent, if not high-growth, source.
• Overseas Study Consulting Services: Provides services like visa prep and accommodation assistance.
• Technological Consulting Services for Smart Campus Solutions: The near-term risk here is huge, as this segment has almost vanished.

Honestly, the stability of the training and textbook sales is what keeps the lights on, but it's not enough to offset the losses elsewhere. You can dive deeper into the ownership structure and market sentiment by Exploring China Liberal Education Holdings Limited (CLEU) Investor Profile: Who's Buying and Why?

Year-over-Year Revenue Trends and Segment Changes

The numbers show a clear trend of contraction, but the reason for the contraction is what matters. The overall revenue for the first six months of fiscal year 2024 (H1 2024) was only $0.89 million, a 34.8% decrease from the $1.36 million reported in H1 2023. Here's the quick math on the major segment change:

The significant change in revenue streams is the near-total collapse of the Technological Consulting Services for Smart Campus Solutions segment. This segment's revenue dropped by a staggering 97.4% in H1 2024, primarily because two major projects concluded. What this estimate hides is that while revenue plummeted, gross margin actually surged to 84.8% in H1 2024, up from 63.2% in H1 2023. This suggests the remaining revenue is higher-margin business, defintely a good sign for future profitability.

For a historical perspective on the annual trend, look at the recent past:

The move away from low-margin, project-based work (like the consulting projects) is painful in the near-term revenue figures, but it may set up a more sustainable, higher-margin business model down the road. Still, a nearly 47% drop in TTM revenue is a massive headwind that requires careful cash flow management.

Profitability Metrics

You're looking at China Liberal Education Holdings Limited (CLEU) and trying to figure out if the business model actually makes money. The direct takeaway is that while the company maintains a surprisingly high gross margin, the massive operating and net losses show a fundamental breakdown in cost control and scale, which is a major red flag for any investor.

Based on the Trailing Twelve Months (TTM) data ending June 30, 2024, the picture is stark. China Liberal Education Holdings Limited generated only $2.41 million in revenue, an incredibly small base for a publicly traded company. Still, the gross profit-the revenue left after subtracting the cost of services-was $1.54 million, resulting in a Gross Profit Margin of approximately 63.9%. That's a strong number; it means the core service itself is priced well above its direct costs.

The Operational Efficiency Gap

Here's the quick math that shows the problem: the high gross profit does not translate down the income statement. Once you factor in selling, general, and administrative (SG&A) expenses, the story flips hard. The company posted an Operating Loss of $5.07 million, which gives us an Operating Profit Margin of roughly -210.4%. This gap is enormous. It means for every dollar of revenue, China Liberal Education Holdings Limited is spending over two dollars on running the business, marketing, and overhead.

The situation worsens at the bottom line (Net Profit). After accounting for all expenses, the company reported a Net Loss of $10.06 million, translating to a Net Profit Margin of about -417.4%. This includes significant non-operational hits, like an Impairment of Goodwill charge of $2.73 million in the TTM period, which further signals past overvaluations or strategic failures. Honestly, a net margin this low is a sign of a business model under severe stress.

CLEU vs. Industry Profitability

To be fair, the Chinese education sector is competitive and has faced regulatory headwinds, but China Liberal Education Holdings Limited's performance is an outlier on the negative side. You can see the difference when comparing its margins to peers:

• Gross Margin: CLEU's 63.9% is competitive with major players like Gaotu Techedu Inc. (GOTU), which reported a 66.0% gross margin in Q2 2025. This suggests the core service pricing is fine.
• Operating Margin: This is where the divergence is defintely clear. China Liberal Education Holdings Limited's -210.4% contrasts sharply with New Oriental Education & Technology Group Inc. (EDU), which reported a positive Operating Margin of 8.7% for its fiscal year 2025. Even loss-making Gaotu Techedu Inc. had a much smaller TTM operating loss margin of -12.97% as of June 30, 2025.
• Net Margin: China Liberal Education Holdings Limited's -417.4% loss is worlds apart from New Oriental Education & Technology Group Inc.'s Net Income of $371.7 million in FY2025.

The table below summarizes the core profitability metrics for a clearer comparison of operational efficiency:

The trend in profitability over time for China Liberal Education Holdings Limited is one of increasing loss, moving from a positive operating income of $1.44 million in 2020 to the current deep loss of $5.07 million TTM. This is a clear indicator of deteriorating operational efficiency and an inability to scale revenue to cover fixed and administrative costs. This is the single biggest risk factor you need to consider. You can read more in-depth analysis in Breaking Down China Liberal Education Holdings Limited (CLEU) Financial Health: Key Insights for Investors.

Next Step: Demand Finance to draft a 12-month SG&A expense breakdown to identify the primary drivers of the operating loss by next Friday.

Debt vs. Equity Structure

If you look at the balance sheet for China Liberal Education Holdings Limited (CLEU) in the 2025 fiscal year, the immediate takeaway is a heavy reliance on equity financing, not debt. This is a classic asset-light structure, but it's one that has been tested by recent market events. The company's financial health is characterized by a very low Debt-to-Equity (D/E) ratio, which means they use very little borrowed money to fund their operations and growth.

As of the latest reports, China Liberal Education Holdings Limited has a Debt-to-Equity ratio of only about 2.4% (or 0.024). This is exceptionally low when you compare it to the broader Education Services industry average, which often sits around 0.41. Honestly, a ratio this low suggests almost no financial leverage risk from debt, but it also means the company isn't using cheap debt to amplify returns.

Here's the quick math on their debt profile:

• Total Debt: Approximately $2.1 million.
• Total Equity: Approximately $88.0 million.
• Long-Term Liabilities: The company reports having no long-term liabilities.

That $2.1 million is essentially all short-term debt, which is easily covered by their cash and equivalents. To be fair, the company has a substantial net cash position of roughly $81.98 million. This strong liquidity position, with a current ratio over 16, is defintely a positive for short-term stability.

The balancing act between debt and equity financing for China Liberal Education Holdings Limited has been heavily skewed toward equity, especially in the near term. Since they have virtually no long-term debt, there are no recent debt issuances, credit ratings, or refinancing activities to analyze. Instead, the focus has been on managing their equity structure, which has seen significant activity.

The most notable event was a substantial ordinary-share issuance in December 2024 at a deep discount, which raised public interest concerns about shareholder dilution and contributed to the company's delisting from Nasdaq in June 2025. This move signaled a preference for raising capital through equity, even at the cost of significant dilution and regulatory scrutiny, rather than taking on meaningful debt.

This table summarizes the core of their financial structure:

What this estimate hides is the true cost of equity. While avoiding debt interest payments is great, the dilution from the substantial share issuance in late 2024 shows that raising equity capital can be expensive for existing shareholders, especially when the company is facing profitability challenges and regulatory issues. The lack of debt is a strength, but the circumstances surrounding the recent equity raise and subsequent delisting are a major risk factor you need to weigh.

For a deeper dive into who is holding this equity and what their motivations might be, you should read Exploring China Liberal Education Holdings Limited (CLEU) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if China Liberal Education Holdings Limited (CLEU) has the cash to cover its short-term bills, and the answer is a stark contrast between its balance sheet and its operations. The company shows extraordinary balance sheet liquidity, but this strength is fundamentally undercut by its cash flow from core business activities.

The company's liquidity positions are exceptionally high. For instance, the Current Ratio, which measures current assets against current liabilities (short-term debts), was reported at a robust 16.25 in early 2025. This means China Liberal Education Holdings Limited (CLEU) holds over 16 times the assets needed to cover its immediate obligations. A ratio above 2.0 is generally considered healthy, so 16.25 is an outlier. The Quick Ratio (acid-test ratio), which excludes less-liquid assets like inventory, is not explicitly available, but given the massive cash balance of approximately $32.68 million as of August 2025, it is defintely also extremely high.

• Current Ratio: 16.25 (Strongest indicator of short-term financial health).
• Quick Ratio: Not explicitly reported, but inferred to be very high.
• Cash Position: Approximately $32.68 million in cash.

The analysis of working capital trends reveals a historical challenge. The change in working capital was a negative -$1.4 million USD as of December 31, 2023, indicating that the use of working capital exceeded its sources during that period. While the high current ratio suggests a large stock of working capital, this negative change points to a concerning flow trend in the past, a dynamic that needs to be reversed for sustainable health.

When we look at the Cash Flow Statements, the picture gets complicated fast. The company's cash flow from operations (CFO) was a negative ($3.78 million) as of August 2025. This is the most critical near-term risk: the core business is currently burning cash, not generating it. The company's negative EBITDA of $5 million over the last twelve months reinforces this lack of operational profitability. [cite: 3 (from previous search)]

Here is a quick overview of the cash flow trends based on the latest available data:

The positive cash flow from financing activities of $3.36 million suggests the company is relying on external funding, like issuing shares or debt, to offset the operational cash burn. This is a classic sign of a company whose strong liquidity is more a function of past or recent financing maneuvers than of a self-sustaining business model. The strength is in the vault, not the engine.

The potential liquidity concerns are not about immediate solvency-the company has ample cash and minimal debt of about $1.72 million-but about the sustainability of its operations. The true strength of China Liberal Education Holdings Limited (CLEU) lies in its low debt-to-equity ratio and large cash cushion, which buys it time to fix its core business. However, the operational cash burn, combined with the Nasdaq delisting notice in May 2025 for a delayed annual report, presents a significant non-financial risk that you must factor into your valuation. [cite: 3 (from previous search), 12 (from previous search)] You can read more about the company's long-term goals here: Mission Statement, Vision, & Core Values of China Liberal Education Holdings Limited (CLEU).

Valuation Analysis

You're looking at China Liberal Education Holdings Limited (CLEU) and wondering if the price is right. My short answer is this: the valuation metrics point to a company in significant financial distress, trading at extremely low multiples due to massive recent stock price erosion and unprofitability. You are not buying a growth story; you are buying a deep-value, high-risk turnaround play.

The core issue is profitability. Since China Liberal Education Holdings Limited is currently unprofitable, key valuation metrics like the Price-to-Earnings (P/E) ratio are not applicable (n/a) or meaningful. The trailing twelve months (TTM) non-GAAP Earnings per Share (EPS) stands at a negative -$2447.69, with a Net Income of approximately -$10.05 million. This immediately shifts our focus to other ratios that gauge asset value and revenue.

• Price-to-Book (P/B): The P/B ratio is near 0.00 as of November 2025. This is a red flag, suggesting the market values the company at almost nothing relative to its book value (assets minus liabilities).
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric is also n/a, but the Enterprise Value (EV) itself is negative, reported at approximately -$81.93 million. A negative EV typically means the company holds more cash than its total debt and market capitalization combined, which, in this context, suggests a tiny market cap relative to its cash position, though the market is clearly discounting the value of its operations and future earnings.
• Price-to-Sales (P/S): Given the unprofitability, the P/S ratio is a better gauge, sitting at a very low 0.02x. Here's the quick math: a P/S of 0.02x means the market is valuing the company at just two cents for every dollar of sales, which is defintely a deeply discounted valuation.

Stock Price and Analyst Sentiment

The stock price trend over the last year tells a brutal story of value destruction. As of November 2025, the stock price has plummeted by an astonishing -99.97% over the last 12 months. This dramatic drop is partly contextualized by an 80-to-1 reverse stock split that took effect in March 2025, a common move for companies trying to maintain listing compliance on Nasdaq. Despite the split, the market capitalization is minuscule, sitting at only $58.90K as of mid-November 2025, a -99.92% decrease over the last year.

The current stock price is volatile, hovering around $1.03 per share. What this price hides is the extreme volatility, with the 52-week range spanning from a low of $0.66 to a high of $3840 (pre-split or highly volatile data point). The analyst consensus is not a formal 'Buy/Hold/Sell' from major institutions, but the technical sentiment is overwhelmingly Bearish, with one forecast suggesting the stock is a 'bad, high-risk 1-year investment option.' The general consensus is that the stock is trading 'Below Fair Value,' but the risk profile is exceptionally high.

The company does not pay a dividend, so the dividend yield and payout ratios are 0.00%.

If you want to understand the full picture, including the operational risks that drive this valuation, you should review the full analysis at Breaking Down China Liberal Education Holdings Limited (CLEU) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at China Liberal Education Holdings Limited (CLEU) and seeing a strong gross margin, but honestly, the near-term risk profile is dominated by a single, existential threat: regulatory compliance. The company's financial health is overshadowed by its status with Nasdaq, which suspended trading on June 3, 2025, due to multiple failures. This isn't just a technicality; it's a massive operational and financial red flag.

The core issue is a failure of corporate governance and financial reporting. China Liberal Education Holdings Limited failed to file its annual report on Form 20-F for fiscal year 2024, and they didn't even request an extended stay of suspension. Plus, Nasdaq cited public interest concerns regarding a substantial share issuance in December 2024, which resulted in significant dilution for existing shareholders.

Operational and Financial Risks: The Delisting Threat

The immediate financial risk is the loss of a major US listing, which drastically limits liquidity and investor access. This is the biggest headwind. Beyond that, the underlying business is struggling to grow, with revenue declining by a sharp 37.1% over the past year, as of May 2025. The company remains unprofitable over the last twelve months, even with a strong reported gross profit margin of 64%.

Here's the quick math on the dilution: the December 2024 share issuance was priced at an equivalent of $0.006 per share, which represented a 96% discount from the minimum price required by Nasdaq rules. This kind of capital raise, while bringing in cash, destroys shareholder value and signals deep financial distress. It's a massive wealth transfer from existing shareholders to new investors.

• Failure to file FY2024 Form 20-F.
• Trading suspension effective June 3, 2025.
• Revenue decline of 37.1% over the last year.
• Extreme stock price volatility, with weekly volatility increasing to 1817%.

External and Strategic Headwinds

The regulatory environment for Chinese education companies remains a major external risk, still reeling from past crackdowns, though China Liberal Education Holdings Limited focuses on smart campus solutions and job readiness training, which are less directly targeted. Still, challenging economic and market conditions in China are cited by management as a factor impacting performance.

A more insidious strategic risk is the market integrity issue. The FBI's Chicago Division was seeking victims in a 'ramp-and-dump' investment fraud scheme involving China Liberal Education Holdings Limited stock in January 2025. This kind of activity severely damages investor trust and makes any fundamental analysis nearly impossible. You're not just investing in a business; you're wading into a very volatile, and potentially manipulated, market. For a deeper dive into who is still buying, you can check out Exploring China Liberal Education Holdings Limited (CLEU) Investor Profile: Who's Buying and Why?

Mitigation Strategies and Caveats

To be fair, the company has shown some resilience in specific areas. They successfully navigated a previous minimum bid price deficiency by completing a significant 80-for-1 reverse stock split in March 2025. Operationally, management reported a strong gross margin of 84.8% in the first half of fiscal year 2024, a notable jump from 63.2% in the same period the prior year, attributing it to restructuring. They also substantially increased their total cash position to $84.15 million as of June 30, 2024, up from $20.34 million at the end of 2023.

What this estimate hides is that while the company has a strong liquidity position-a current ratio of 16.25 as of January 2025-that cash is not a shield against delisting. The board has appealed the delisting decision and states a commitment to compliance, but the failure to file the 20-F is a defintely concrete failure of execution. The operational improvements don't matter if the stock can't trade.

The next step for any investor is simple: wait for the outcome of the Nasdaq appeal and the filing of the delinquent Form 20-F. Until those two major compliance issues are resolved, the risks are too high to justify a position.

Growth Opportunities

You're looking at China Liberal Education Holdings Limited (CLEU) and seeing a company with a high-margin business model but significant near-term volatility. The growth story here is defintely a high-risk, high-reward bet, pivoting from traditional study abroad to education technology (EdTech) and career services.

The core growth driver is the shift to providing technological consulting services for smart campus solutions. This initiative aims to modernize Chinese universities' information and data management systems, creating a new, scalable revenue stream beyond their legacy international education services. Plus, their job readiness training programs for graduates tap into a massive, consistent need for career-focused skills in the Chinese market.

Product Innovation and Strategic Focus

China Liberal Education Holdings Limited is strategically positioning itself to capture the long-term growth of the broader Chinese international education market, which is projected to grow at a Compound Annual Growth Rate (CAGR) of 8.5% between 2023 and 2028. Their competitive edge lies in a specialized international education services portfolio and a robust network of global partnerships.

Here's the quick math on their core services, which still drive the majority of revenue:

• Study Abroad Programs: 3,245 students annually, capturing 12.7% of the Chinese international education market.
• Test Preparation Services: Serving 7,890 students in the standardized test preparation segment.
• Educational Partnerships: A network of 58 international universities, including 23 in North America and 15 in Europe.

This deep partnership network is a high barrier to entry (moat) for competitors. Honesty, maintaining a gross profit margin of 84.8% (as reported in the first six months of fiscal year 2024) shows they have pricing power and cost discipline in their service delivery.

Revenue Projections and Near-Term Risks

To be fair, getting a clear 2025 full-year revenue or earnings estimate is impossible right now; analysts are not providing consensus estimates due to the company's limited past data and recent corporate actions. What this estimate hides is the severe near-term financial instability. The company reported a net loss of $4.72 million for the first half of 2024, on revenue of only $0.89 million.

More critically, the company faced a Nasdaq delisting warning, executing a share consolidation in late 2024 and another on March 3, 2025, combining every 80 shares into one to regain compliance. This culminated in a suspension of trading on Nasdaq effective June 3, 2025, due to a failure to file its 2024 annual report. This is a massive red flag. A company can't execute a growth strategy if it can't maintain its public listing.

The future growth is entirely dependent on the successful execution of the EdTech pivot and a resolution of the Nasdaq situation. The strategic initiatives are clear, but the financial foundation is shaky.

The company's revenue stream diversification is currently weighted heavily toward traditional services, which is a risk given the regulatory environment in China. Here is a look at the segment breakdown:

The 'Additional Services' segment, which includes the high-growth smart campus solutions, needs to grow significantly to justify a bullish outlook. You can review the company's foundational principles here: Mission Statement, Vision, & Core Values of China Liberal Education Holdings Limited (CLEU).