Shangde Qizhi Education Group Ltd., a Shanghai-based K-12 private education provider, has filed for initial public offering on Hong Kong Stock Exchange, according to is IPO prospectus.
Founded in 2003, Shangde Qizhi offers educational programs and services to students from kindergarten to high school covering the entire K-12 curriculum. It operates five K-12 schools in Shanghai.
The company has enrolled 9,458 students and 825 teachers. For the 2017/2018 school year, it had the largest single K-12 private school campus in Shanghai in terms of enrollment, according to Frost & Sullivan.
Its revenue increased 30% from RMB276 million (US$40 million) in 2015 to RMB360 million (US$52 million) in 2016, and up 37% further to RMB492 million (US$72 million)in 2017. Its adjusted net profit grew 21% from RMB56 million in 2015 to RMB67.6 million in 2016, and another 13% to RMB76.5 million in 2017.
This year has seen Chines private education providers are rushing for IPO. In March, Beijing Huatu Hongyang Education & Culture Corp., Ltd. filed for a Hong Kong IPO. In June, China Beststudy Education Group followed suit. Last month, Hujiang Education & Technology Corp joined the club.
“Currently, the average PE ratio for education firms in mainland’s A-share market is only about 20 times, while the PE ratio is about 30 times in Hong Kong, with some renowned companies reached as high as 40 times," Wang Shasha, an education analyst at Huatai Securities to Chinese media. "In the current market environment, educational firms prefer to be listed in Hong Kong."