{"id":3167,"date":"2017-10-13T13:07:09","date_gmt":"2017-10-13T17:07:09","guid":{"rendered":"http:\/\/www.ipoboutique.com\/blog\/?p=3167"},"modified":"2017-10-13T13:07:19","modified_gmt":"2017-10-13T17:07:19","slug":"rise-education-cayman-ltd-redu-ipo-preview","status":"publish","type":"post","link":"https:\/\/www.ipoboutique.com\/blog\/rise-education-cayman-ltd-redu-ipo-preview\/","title":{"rendered":"RISE Education Cayman Ltd. ($REDU) #IPO Preview"},"content":{"rendered":"

\"RISEEducation\"<\/a><\/p>\n

Company: RISE Education Cayman Ltd.<\/strong>
\nSymbol: REDU
\nDescription: They operate in Chinas junior English Language Training, or ELT, market, which refers to after-school English teaching and tutoring services provided by training institutions to students aged three to 18.
\nShares: 11 million ADSs
\nPrice Range: $12.00-$14.00
\nTrade Date: 10\/20
\nUnderwriter(s): Morgan Stanley, Credit Suisse, UBS
\nCo-Manager(s): HSBC
\nTerms Added: 10-6-17<\/p>\n

Link to S-1\/A Prospectus<\/a><\/strong><\/p>\n

Link to Retail Roadshow<\/a><\/strong><\/p>\n

Business<\/strong>: They pioneered the \u201csubject-based learning\u201d teaching philosophy in China, whereby various subject matters, such as language arts, math, natural science and social science are used to teach English. Their\u00a0course offerings use interactive courseware to create an immersive English learning environment that helps students learn to speak and think like a native speaker.\u00a0In 2016 and for the six months ended June 30, 2017, they had 36,173 and 26,600 student enrollments, respectively, in self-owned learning centers.<\/p>\n

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Market Opportunity:\u00a0<\/strong>Their\u00a0business model is highly scalable. They have a network of both self-owned learning centers as well as franchised learning centers. As of June 30, 2017, they had a network of 246 learning centers across 80 cities in China, among which 56 were self-owned centers primarily located in tier-one cities and 190 centers were\u00a0ranchised learning centers primarily located in non-tier-one cities.\u00a0China\u2019s junior ELT market is rapidly growing, driven by favorable government policies, supportive economic conditions, and increasing cultural and societal emphasis on English education. According to Frost\u00a0& Sullivan, China\u2019s junior ELT market, is expected to grow to RMB239.8\u00a0billion in 2021 from RMB85.2 billion in 2016, representing a CAGR of 23.0%.<\/p>\n

 <\/p>\n

Financials:\u00a0<\/strong>Their revenues increased from RMB529.5 million in 2015 to RMB711.0 million (US$104.9 million) in 2016, and increased from RMB315.0 million for the six months ended June 30, 2016 to RMB437.1 million (US$64.5 million) for the six months ended June 30, 2017, largely as a result of the growth of self-owned learning centers. As their network of learning centers has expanded, their brand has also strengthened. This has allowed them to maintain their\u00a0position as a market leader, command premium pricing, improve profitability and enjoy a highly loyal customer base. In 2016, they had a 67% student retention rate, 63% higher than the industry average of 41%, according to Frost & Sullivan and their student retention rate improved further to 70% in the six months ended June 30, 2017.<\/p>\n

\"RISEEducationFinancials\"<\/a><\/p>\n

Competition and Sector Performance: \u00a0<\/strong><\/p>\n