HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

EdTech in Asia has been booming with increase in investor interests over the last two years. While China has seen a faster adoption and development in this space, other countries in Asia are also advancing very rapidly on the back of the pandemic-driven demand. Fueled further by significant investments, particularly from venture capital, the Asia (ex-China) EdTech market has been rapidly expanding. We think there are a lot of positive drivers, including demographic, socio-economic, political, cultural and governmental factors, behind the high growth rate of Asian EdTech and support its encouraging prospects. However, there are also many challenges need to be overcome by the EdTech enterprises so that they can thrive in the long-term.Outside of China, there are already two unicorns in Asia and both are from India - <a href="https://www.smartkarma.com/entities/think-learn-pvt-ltd-byju-s" target="_blank" data-smartkarma-citation="entities:32203:1" rel="noopener">BYJU'S (1391510D IN)</a> and <a href="https://www.smartkarma.com/entities/sorting-hat-technologies-pvt-ltd" target="_blank" data-smartkarma-citation="entities:34354:1" rel="noopener">Unacademy (1434617D IN)</a> and there are some potential newcomers from Southeast Asia striving to make themselves into the list. We believe with further growth in EdTech adoption and the influx of EdTech investments in Asia, there are numerous opportunities for the sector to advance. Besides the two Indian names, we also look into interesting names including <a href="https://www.smartkarma.com/entities/zenius-education-pt" target="_blank" data-smartkarma-citation="entities:34355:1" rel="noopener">Zenius Education (1783734D IJ)</a>, <a href="https://www.smartkarma.com/entities/xseed-education-pte-ltd" target="_blank" data-smartkarma-citation="entities:34356:1" rel="noopener">XSEED Education (1256190D SP)</a>, <a href="https://www.smartkarma.com/entities/cialfo" target="_blank" data-smartkarma-citation="entities:34359:1" rel="noopener">Cialfo (1432512D SP)</a>, <a href="https://www.smartkarma.com/entities/topica-edtech-group" target="_blank" data-smartkarma-citation="entities:34357:1" rel="noopener">Topica Edtech Group (1679740D VN)</a> and <a href="https://www.smartkarma.com/entities/pt-ruang-raya-indonesia" target="_blank" data-smartkarma-citation="entities:34358:1" rel="noopener">Ruangguru (1522782D IJ)</a>. We think many of them are poised to become more meaningful players going forward, and serve as important role models for future development of EdTech in the region.<h2>What's Original?</h2>This Smartkarma Original addresses the latest developments of EdTech industry in Asia (ex-China) and will take experience from China as reference. In particular, its focus will be mostly on South and Southeast Asian countries. We highlight comprehensively the positive trends and driving factors behind the rapid growth of EdTech in Asia and discuss the key challenges. With EdTech development still in a comparatively early stage in the region, the company section of this Original focuses primarily on unlisted names. We look at their background, business model, management team, moats and challenges, financing arrangements and latest developments. We will finish up by looking at the emerging trends which will shape the industry in the medium-term. It is our intention that this Original will be an important reference Insight for the sector with unique coverage of key unlisted EdTech plays in Asia (ex-China).

EdTech in Asia has been booming with increase in investor interests over the last two years. While China has seen a faster adoption and development in this space, other countries in Asia are also advancing very rapidly on the back of the pandemic-driven demand. Fueled further by significant investments, particularly from venture capital, the Asia (ex-China) EdTech market has been rapidly expanding. We think there are a lot of positive drivers, including demographic, socio-economic, political, cultural and governmental factors, behind the high growth rate of Asian EdTech and support its encouraging prospects. However, there are also many challenges need to be overcome by the EdTech enterprises so that they can thrive in the long-term.Outside of China, there are already two unicorns in Asia and both are from India - BYJU'S (1391510D IN) and Unacademy (1434617D IN) and there are some potential newcomers from Southeast Asia striving to make themselves into the list. We believe with further growth in EdTech adoption and the influx of EdTech investments in Asia, there are numerous opportunities for the sector to advance. Besides the two Indian names, we also look into interesting names including Zenius Education (1783734D IJ), XSEED Education (1256190D SP), Cialfo (1432512D SP), Topica Edtech Group (1679740D VN) and Ruangguru (1522782D IJ). We think many of them are poised to become more meaningful players going forward, and serve as important role models for future development of EdTech in the region.What's Original?This Smartkarma Original addresses the latest developments of EdTech industry in Asia (ex-China) and will take experience from China as reference. In particular, its focus will be mostly on South and Southeast Asian countries. We highlight comprehensively the positive trends and driving factors behind the rapid growth of EdTech in Asia and discuss the key challenges. With EdTech development still in a comparatively early stage in the region, the company section of this Original focuses primarily on unlisted names. We look at their background, business model, management team, moats and challenges, financing arrangements and latest developments. We will finish up by looking at the emerging trends which will shape the industry in the medium-term. It is our intention that this Original will be an important reference Insight for the sector with unique coverage of key unlisted EdTech plays in Asia (ex-China).

Asia (Ex-China) EdTech: A Deep-Dive into the Bonanza

<ul>
<li>Global EdTech venture funding surged 29% YoY to US$20.8bn in 2021. China saw c.75% YoY decline in EdTech venture funding but India recorded over 60% growth.</li>
<li>Into 2022, we expect EdTech spending and market will continue to grow, venture funding becoming more selective and Asia and workforce are the fastest growing markets.</li>
<li>China stays weak in 1H22 and India will thrive. India has 4 new unicorns in 2021 while none for China. We stick to higher education, not EdTech (tutoring) in China.</li>
</ul>


Global EdTech venture funding surged 29% YoY to US$20.8bn in 2021. China saw c.75% YoY decline in EdTech venture funding but India recorded over 60% growth.
Into 2022, we expect EdTech spending and market will continue to grow, venture funding becoming more selective and Asia and workforce are the fastest growing markets.
China stays weak in 1H22 and India will thrive. India has 4 new unicorns in 2021 while none for China. We stick to higher education, not EdTech (tutoring) in China.


Asia EdTech and China Education: An Update

Education Sector Analyst, Schoolhouse Solutions

Anik Siwach

Education Sector Analyst

Schoolhouse Solutions

Schoolhouse is a strategy and research provider for the Education sector. We publish differentiated reports and bespoke research on the sector, focused on private and public companies in Asia-Pacific. Our team has decades of experience working with Education companies ranging from K-12 to Tertiary and Edtech.

Strategy and Research Provider

<ul>
<li>EdTech Market Volatility: Docebo and Tribal Group report significant YTD gains of +27% and +32%, while Janison and LTG Group face steep declines of -59% and -45%.</li>
<li>AI Disruption and Adaptation: Chegg introduces a GPT-style assistant in response to AI challenges, while Duolingo excels with 83.1M monthly users, expanding beyond language tuition.</li>
<li>Shifts in Private Funding: Private EdTech funding declines in 2023, with strategic investors and family offices driving deals, amidst a broader reduction in venture capital investments.</li>
</ul>


EdTech Market Volatility: Docebo and Tribal Group report significant YTD gains of +27% and +32%, while Janison and LTG Group face steep declines of -59% and -45%.
AI Disruption and Adaptation: Chegg introduces a GPT-style assistant in response to AI challenges, while Duolingo excels with 83.1M monthly users, expanding beyond language tuition.
Shifts in Private Funding: Private EdTech funding declines in 2023, with strategic investors and family offices driving deals, amidst a broader reduction in venture capital investments.


Education Sector YTD: Volatility in Public Equities, PE Stalking with Take Private Offers

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.</li>
<li>
 Macro data points: China inflation, industrial production, retail sales, and RRR cut; India industrial and manufacturing output.</li>
<li>
 Companies mentioned:<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/think-learn-pvt-ltd-byju-s" target="_blank" data-smartkarma-citation="entities:32203:1" rel="noopener">BYJU'S (1391510D IN)</a>
</li>
</ul>


The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.

 Macro data points: China inflation, industrial production, retail sales, and RRR cut; India industrial and manufacturing output.

 Companies mentioned:Alibaba Group Holding (9988 HK), Tencent (700 HK), Baidu (9888 HK), BYJU'S (1391510D IN)



GEMWeekly (15 Sep 2023): China, India Macro Data; Alibaba, Tencent, Baidu, Byju’s

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>In this note, we will take a look at the Asia Pacific IPO pipeline for 2023, specifically for India, Asia-linked ADRs, Korea, Japan and ASEAN.</li>
<li>This list has been compiled on a best effort basis from tracking the company filings and through various other sources.</li>
<li>The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.</li>
</ul>


In this note, we will take a look at the Asia Pacific IPO pipeline for 2023, specifically for India, Asia-linked ADRs, Korea, Japan and ASEAN.
This list has been compiled on a best effort basis from tracking the company filings and through various other sources.
The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.


Aequitas 2023 Asia IPO Pipeline - India, ADRs, Korea, Japan and ASEAN

India

Think & Learn Pvt Ltd, doing business as BYJU, provides online educational services. The Company offers technology based education platform for primary and secondary school subjects, overseas and domestic test preparation courses, engineering, medicine, and more. BYJU operates in India.

BYJU'S (1391510D IN)

Asia (Ex-China) EdTech: A Deep-Dive into the Bonanza

The Asia (ex-China) EdTech industry is still in early stage of boom and there are positive factors driving its outlook. In this Original, we look...

Osbert Tang, CFA

Asia EdTech and China Education: An Update

China's EdTech venture funding lagged behind India's in 2021. We expect regulatory concerns to keep China underperforming in 1H22, with India...

Osbert Tang, CFA

Education Sector YTD: Volatility in Public Equities, PE Stalking with Take Private Offers

Explore 2023's EdTech trends in our report: Duolingo's rise, Chegg's AI pivot, market volatility, and funding shifts. Essential insights for...

Anik Siwach

GEMWeekly (15 Sep 2023): China, India Macro Data; Alibaba, Tencent, Baidu, Byju’s

The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of...

Wium Malan, CFA

Aequitas 2023 Asia IPO Pipeline - India, ADRs, Korea, Japan and ASEAN

In this note, we will take a look at the Asia Pacific IPO pipeline for 2023, specifically for India, Asia-linked ADRs, Korea, Japan and ASEAN.

Sumeet Singh