China's largest pre-school education provider goes public on NYSE

RYB Education Institution, a Chinese firm providing early childhood education, went public on the New York Stock Exchange on Wednesday, with its share price surging by more than 40 percent from an opening price of 18.50 US dollars two hours into trading.

"Being listed on the NYSE is a milestone for RYB. With the support of international capital market, RYB can provide more diversified and quality preschool education services. A company like us growing to this scale also needs more standard management and supervisory scheme," RYB Co-founder & CEO Shi Yanlai said after the IPO.

In a statement, RYB Education Institution described itself as China’s first independently-listed preschool education firm targeting children between 0 and 6 years old.

Cao Chimin, the other founder and chairman of RYB, said the company's development has benefited from China's economic growth, further urbanization, consumption upgrade, education reforms and favorable new policies for privately-run schools.

More and more Chinese families are willing to spend more their kids’ education.

According to the National Bureau of Statistics, education expenditures account for 65.5 percent of urban households' total annual consumption, and 56.5 percent of Chinese parents think investing in their children’s education is the most important investment.

China has a huge demand and great market potentials for pre-school education, Cao told reported after the IPO.

“With the Non-state Education Promotion Law of the People's Republic of China (2016 Revision) officially coming into effect, we have seen much encouragement from the government’s favorable tax policies and capital support, especially with the universal two-child policy being passed at the end of 2015. This provides very high growth potentials for children education,” Cao said.

“In the future, we will further expand our market share in China’s first- and second-tier cities, and in the meantime step up providing services to third- and fourth-tier cities.” Cao added.

Amid the fast development of and increasing competition in the early childhood education industry in China, there will be accelerated acquisitions and reshuffles in the upcoming years, promoting more large-scale brands, Shi noted.

RYB, established in 1998, is the largest early childhood education service provider in China, as measured by annual total revenues in 2016, according to Frost & Sullivan Report.

As of June 30, 2017, RYB directly operated 80 kindergartens and franchised additional 175 kindergartens, covering 130 cities and towns in China, according to the company.

Net profits in the first half of this year rose by 19.5 percent from a year earlier to 4.9 million dollars, mainly through increased kindergarten enrollment.

(CGTN)