Report
EUR 93.41
For Business Accounts Only
17 Education has a unique business model whereby it provides a free in-school solution to teachers, students and parents and upsells after-school paid tuition. On one hand it has a large pool of verified students to upsell its paid after-school tuition. On the other hand its conversion and market share is low, relative to its addressable market.
While a majority of the paid-enrollment came from the in-school pools of students, it still needs to spend the majority of its gross profit as the promotional course expenses. We think it is so far a hard business. Our preliminary assessment suggests that it could take the company until the end of 2022 to reach breakeven.
The company had negative newsflow of administrative warning for its collection of personal data as well as unauthorized in-app purchases for homework related online games.
17 Edu & Tech (一起教育) Pre-IPO - Far from profitability
17 Education is a leading online tuition provider in China. The company was founded by former regional head of New Oriental Education and is looking to raise up to USD 300m via a listing in the US.17 Education has a unique business model whereby it provides a free in-school solution to teachers, students and parents and upsells after-school paid tuition. On one hand it has a large pool of verified students to upsell its paid after-school tuition. On the other hand its conversion and market share is low, relative to its addressable market.
While a majority of the paid-enrollment came from the in-school pools of students, it still needs to spend the majority of its gross profit as the promotional course expenses. We think it is so far a hard business. Our preliminary assessment suggests that it could take the company until the end of 2022 to reach breakeven.
The company had negative newsflow of administrative warning for its collection of personal data as well as unauthorized in-app purchases for homework related online games.
Underlying
17 Education & Technology Group
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Ke Yan
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