Company: Puxin Limited
Symbol: NEW
Description: They are a successful consolidator of the after-school education industry in China.
Trade Date: 6/15
Shares: 7.2 million
Price Range: $17.00-$20.00
Underwriter(s): Citigroup, Deutsche Bank, Barclays, Haitong International, CICC
Terms Added: 6-1-18
Business: They are a successful consolidator of the after-school education industry in China. They have strong acquisition and integration expertise to effectively improve education quality and operational performance of acquired schools. Through acquisitions and organic growth, they have grown rapidly and became the third largest after-school education service provider in China in 2017 in terms of student enrollments, according to the Frost & Sullivan report. Since their inception, they had acquired 48 schools and built a nationwide network of 397 learning centers across 35 cities in China as of March 31, 2018. Their total student enrollments increased 180.4% from 454,945 in 2016 to 1,275,723 in 2017, representing the fastest growth among major after-school education service providers in China, according to the Frost & Sullivan report. In the first quarter of 2017 and 2018, their total student enrollments were 185,446 and 260,973, respectively.
FINANCIALS: Their net revenues increased by 192.0% from RMB439.2 million in 2016 to RMB1,282.6 million (US$204.5 million) in 2017. For the three months ended March 31, 2018, their net revenues reached RMB495.7 million (US$79.0 million), an increase of 150.1% from RMB198.2 million for the same period in 2017. Their net loss was RMB127.6 million, RMB397.2 million (US$63.3 million) and RMB355.0 million (US$56.6 million) in 2016, 2017 and the first quarter of 2018, respectively. As of December 31, 2016 and 2017 and March 31, 2018, their deferred revenue was RMB318.3 million, RMB1,035.4 million (US$165.1 million) and RMB875.2 million (US$139.5 million), respectively. Their adjusted EBITDA was RMB(62.5) million and RMB(219.4) million (US$(35.0) million) in 2016 and 2017, respectively, and for the three months ended March 31, 2017 and 2018, their adjusted EBITDA was RMB(14.8) million and RMB(19.0) million (US$(3.0) million), respectively.
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