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Apr. 16 (NBD) -- Last month saw three Chinese education institutions successfuly listed in Hong Kong and the U.S. within 6 days. But the A-share marke is still seeking for solutions to problems arising from the listing of education providers.

China's education market embraced a boom in listing in March this year. While Sunlands Online Education Group ("Sunlands") and OneSmart International Education Group Ltd ("OneSmart") rang the bell in the Nasdaq Stock Market, China Xinhua Education Group Ltd. went listed in Hong Kong.

It is noticed that the securitization of the educational assets has been accelerated long ago. According to data from the website of Shanghai government, as of November 2017, the number of domestic education institutions exceeded 17. 

NBD noticed that at least 10 institutions are listed in Hong Kong or the U.S., or submitted applications at the same period.

The group of listed education institutions has covered academic education, English education, K12 (kindergarten through twelfth grade) after class training institutions, private kindergartens, adult education and online education. 

Besides, the renowned education providers including New Oriental Education and Technology Group ("New Oriental ") and TAL Education Group tend to speed up deployment in the quality education field.

China's education industry is believed to see increasing number of IPOs in 2018, which is led by the accelerated industry consolidation. 

Ou Peng, founder of Sunlands, noted that in China's self-taught higher education examination industry, no dominant giant has emerged yet in the market.

This year, the industry will enter the consolidation stage, and integration will become the main theme of the industry's development, Ou added.

The market size of China's education market is predicted to surge to 2.9 trillion yuan (461 billion U.S. dollars) in 2020 from 1.6 trillion yuan (254 billion U.S. dollars) in 2015, according to the report released by Deloitte China.

Yu Minhong, founder and chairman of New Oriental, announced on Friday that the company will jointly operate the New Oriental Education Fund with Noah Private Wealth Management, attempting to make increasing investments in the education field.

The company is likely to invest in those institutions leveraging the internet and high technologies, Yu said.

A number of education providers have been successfully listed in Hong Kong and the U.S., while the A-share market should be more open for educational institutions. 

In 2016, Chinese regulators specified new policies to promote private education. Despite the new policies are expected to enhance the development of the industry, difficulties in independent listing still exist and merger rules are also strict.

In 2016, OneSmart planned to be listed in the A-share market in the way of recapitalization, but it failed to reach the goal in the end. 

Yu said that it will take some time for the country to improve IPO policies for education institutions.

The implementation of policies brings optimistic prospect of listing in A-share market for quality education institutions, Yu Minhong commented.

However, the risks that education institutions are facing will become obstacles for their IPOs in the domestic market. For example, in late November last year, the early education provider RYB Education was investigated for alleged child abuse at the RYB Education New World kindergarten at Beijing's Chaoyang District.

In addition, the financial positions of those new educational brands are worth noting as well.

 

Email: zhanglingxiao@nbd.com.cn