EY-Parthenon quoted in EducationInvestor

In “China’s IPO Frenzy,” EducationInvestor overviews how Chinese education companies are on the lookout for capital to fund expansion plans in a growing market.

The article highlights that a spur in IPO activity in China came in response to the clarification of laws governing the profit status of school providers in September 2017.

EY-Parthenon Vice President Varun Jain weighed in: “In 2017, IPOs skyrocketed, with 11 companies from all sub sectors looking to raise capital internationally, in contrast to just one English language training float in 2016.”

With this increase in activity, it is anticipated that Hong Kong is destined to become the most important location for Chinese education companies to IPO in the future. Because issuers are required to show a history of profits in China, they will need to join the queue of other companies awaiting approval to list on the home exchanges.

The EY-Parthenon education team discussed further: “We’re in a transition period in the education sector,” Claudia Wang, vice president at EY-Parthenon, explains. “The new laws need to be implemented at a local government level, which is likely to delay any listings in China. It’s faster and easier – once you have the right structure, to list in Hong Kong and the US.”

Read the full article.