China East Education Dives 11.8% in Hong Kong IPO
Zhang Yushuo
DATE:  Jun 13 2019
/ SOURCE:  yicai
China East Education Dives 11.8% in Hong Kong IPO China East Education Dives 11.8% in Hong Kong IPO

(Yicai Global) June 13 -- China's biggest vocational training provider China East Education Holdings flopped in its initial public offering in Hong Kong yesterday as shares tumbled 11.8 percent.

The Anhui province-headquartered firm's stock price [HKG:0667] closed at HKD9.92 (USD1.27) -- a far cry from its HKD11.3 IPO price -- but had rebounded 2.2 percent to HKD10.14 as of 10.42 a.m. this morning.

The company raised around HKD4.8 billion (USD608 million) through the listing, which it plans to spend on expansion in Beijing, Shanghai, Guangzhou, Chengdu and Xi'an -- where it plans to buy property, set up new schools and devise new courses, according to its prospectus.

Founded in 1988, China East offers cooking, car repair and information technology courses, among others. It was operating 145 schools across 30 Chinese regions in 2018, when it pocketed CNY510 million (USD73.7 million) in net profit. The firm has spent over CNY200 million on advertising each year since 2015, making up more than half of its cost of sales.

Despite the IPO woes, China East's market cap is still nearly 10 times the sector's average of HKD2.4 billion (USD307 million), according to figures from Choice Data.

Editor: James Boynton

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Keywords:   China East Education Holdings,IPO,Hong Kong