In this briefing:
1. China Kepei Edu (科培教育) IPO – Regulation Poses Significant Near-Term Risks
China Kepei Education (1890 HK) is looking to raise up to US$122m in its upcoming IPO.
Overall, the company has continued to show that its undergraduate program is the driver behind its growth. It grew its 8M 2018 revenue and gross profit both by about 24% YoY. However, there are significant near-term risks if the MOJ Draft for Comments gets implemented. It may result in Kepei registering its schools as for-profit private schools which would shrink its net profit margin.
In this insight, we will provide updates on the company’s 8M 2018 financials and operating performance, the potential impact of policy change and compare its valuation to other listed education peers. We will also run the deal through our framework.
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