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China Yuhua Education Seeks $245M Hong Kong IPO

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Chinese private education service operator China Yuhua Education Corporation Ltd. is near completion of a Hong Kong listing, as the company secured US$50 million anchor investment from an investment unit of Bank of Communications Ltd., according to disclosure filings.

The Henan province-based Yuhua Education plans to raise HK$1.9 billion (US$245 million) via the listing and is expected to complete the new share issuance in the coming months.

Yuhua currently operates one university and 24 schools in the K-12 education segment, with all of its schools located in nine cities in Henan province in central China.

It is the largest private school operator in terms of the number of students with 48,200 students enrolled for the 2015/2016 school year. Its market share of China's private education sector is around 0.11%, according to disclosure filings.

For fiscal year ended on August 31, 2016, Yuhua recorded RMB781 million in revenues and RMB322 million in net profit, up 12% and 31.4% year-on-year, respectively. Net profit margin was as high as 41%.

The company remains very much a family-run business, with founder Li Guangyu the only shareholder and his 29-year-old daughter serving as vice-chairman of the board and executive president.

Yuhua is following the footsteps of several Chinese private education companies to list in Hong Kong. In January, Wisdom Education International Holdings, operating in southern China, completed a listing in Hong Kong and raised net proceeds of HK$796 million (US$102 million).

Last year, Virscend Education Co., Ltd., with operations in southwest China, listed in Hong Kong to raise HK$1.7 billion (US$219 million). In 2014, international school operator Maple Leaf Education Systems was listed in Hong Kong as the first mainland education firm to IPO in the city.


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