ChinaEdu's IPO Gets Passing Marks
December 11, 2007
Shares of ChinaEdu priced at $10 per share at the low end of expectations. The company planned to sell 6.8M American Depositary Shares at $10 - $12 each. Each ADS represents three ordinary shares.
The firm runs online degree programs for Chinese universities, including academic program development, technology services, enrollment marketing, student support services and finance operations. It also operates private primary and secondary schools, offers online tutoring services. The company has won strategic relationships with eleven universities, nine of which are under long-term, exclusive contracts.
For the six months ended June 30, ChinaEdu reported earnings of $1.6M on revenue of about $15.8M. Previously, the firm's net revenue increased 69% from 2005 levels to $28.1M 2006.
It's not clear yet why the markets have not taken to the company with more interest. One knock is perhaps that its management isn't terribly experienced. And perhaps the markets are less secure about Chinese education than it is about Chinese portals, gaming and travel sites. |