Company: Sunlands Online Education Group
Symbol: STG
Description: They are the leader in China’s online post-secondary and professional education in terms of gross billings in 2017, according to iResearch.
Trade Date: 3/23
Shares: 13 million
Price Range: $11.50-$13.50
Underwriter(s): Goldman Sachs (Asia), J.P. Morgan, Credit Suisse
Co-Manager(s): CLSA
Terms Added: 3-15-18
Business: Founded in 2003 as a traditional education company, they transitioned to an online education model in 2014. Their online education model enables their students to access their course and educational content offerings anywhere and anytime. They have been successful in addressing the unmet demand of a large, growing market and served approximately 790,000 students across China since they transitioned to an online education model in 2014. The number of their students was 205,806, 382,805 and 660,182, respectively, in 2015, 2016 and 2017. For the same periods, their new student enrollments were 179,172, 188,733 and 387,878, respectively.
They offer post-secondary and professional education through extensive courses and educational content offerings. As of December 31, 2017, they offered Self-taught Higher Education Examination, or STE, programs covering 18 majors, MBA-related programs, and professional certification and skills programs.
Financials: Their gross billings increased to RMB741.0 million in 2016 from RMB446.1 million in 2015, representing an increase of 66.1%, and further increased to RMB2,381.8 million (US$366.1 million) in 2017, representing a significant increase of 221.4%. Their net revenues increased by 163.4% from RMB159.0 million in 2015 to RMB418.9 million in 2016 and further increased by 131.6% to RMB970.2 million (US$149.1 million) in 2017. Their net loss in 2015, 2016 and 2017 was RMB318.3 million, RMB253.6 million and RMB918.7 million (US$141.2 million), respectively. Their deferred revenue was RMB414.1 million, RMB727.6 million and RMB2,110.4 million (US$324.4 million), respectively, as of December 31, 2015, 2016 and 2017. Their net cash provided by operating activities was RMB0.4 million, RMB89.3 million and RMB819.5 million (US$126.0 million), respectively, for the years ended December 31, 2015, 2016 and 2017.
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