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Hujiang studies how to list in Hong Kong
Posted on Wednesday, 04 July 2018 08:45
Hujiang Education & Technology has submitted paperwork to list in Hong Kong via an initial public offering (IPO) the South China Morning Post said could fetch between USD 250.00 million and USD 300.00 million.
The Shanghai-headquartered company is billed as one of the largest players in the country’s education technology (Edtech) space, with 170.00 million users accessing almost 2,000 proprietary courses, as of 31st December 2017.
In all, the online digital learning platform has carried out nine rounds of funding and its investor slate includes Baidu’s co-founder Li Yanhong, who, via 99.5 per cent-owned Baidu Netcom, took part in a series C financing in 2014.
Hujiang’s top line has been steadily growing over the last several years, with revenue reaching CNY 555.16 million (USD 88.32 million) in the 12 months ended 31st December 2017 (FY 2016: CNY 339.74 million; FY 2015: CNY 184.94 million).
However, the business is yet to turn a profit as its bottom line has continued to bleed red ink over the same timeframe.
Losses have widened annually to CNY 537.31 million by FY 2017 (FY 2016: CNY 421.87 million loss; FY 2015: CNY 280.27 million loss).
According to the prospectus, the Edtech market can be mainly categorised by teaching content, namely, language training, after-school tutoring, professional education, and hobby tuition.
This space was worth CNY 199.30 billion in China in 2017, based on transaction value, and is expected to reach CNY 579.20 billion in 2022, according to estimates from Frost & Sullivan cited in the paperwork.
Companies in the field compete across consumer base, course quality and coverage, brand recognition, and study behaviour information analysis capacity.
While Hujiang was the fifth-largest by transaction value in 2017, it was first by monthly active users (MAUs) in December 2017, and the third-biggest Internet education platform operated by an Edtech firm by MAUs in December.
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