RISE EDUCATION CAYMAN LTD IPO Filings,Withdrawn,Pricings, Calendar, Market Details-2017

Company Description
We operate in China’s junior English Language Training, or ELT, market, which
refers to after-school English teaching and tutoring services provided by
training institutions to students aged three to 18. We are a leader in China’s
junior ELT market according to Frost & Sullivan, and we ranked second in 2016
with a market share of 10.7% in terms of gross billings in the premium segment.
Furthermore, in 2016, we ranked first in the junior ELT market in Beijing with a
market share of 11.4% and ranked second in the junior ELT market in tier-one
cities with a market share of 5.9%, both in terms of gross billings according to
Frost & Sullivan.
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Our principal executive offices are located at Room 101, Jia He Guo Xin Mansion,
No.15 Baiqiao Street, Guangqumennei, Dongcheng District, Beijing 100062,
People’s Republic of China. Our telephone number at this address is +86 10-8559
9000. Our registered office in the Cayman Islands is at the offices of Maples
Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104,
Cayman Islands. Our agent for service of process in the United States is Cogency
Global Inc., located at 10 East 40th Street, 10th Floor, New York, N.Y. 10016.
Our website is en.risecenter.com.

Proposed Symbols: REDU

Market: NASDAQ Global Select

CIK: 0001712178

Address: ROOM 101, JIA HE GUO XIN MANSION

City, State, Zip: BEIJING 100062

Telephone: 861085599000

CEO: Yiding Sun

Employee Count: 2370

Fiscal Year:

URL: en.risecenter.com
 Deal Data
Status: Filed

Share Price: 12.00-14.00

Shares Offered: 11,000,000

Offer Amount:

Total Expenses: $4,451,254.00

Shares Over Alloted: 1,650,000

Shareholder Shares Offered: 6,000,000

Shares Outstanding: 11,000,000

Lockup Period / Expiration:

Quiet Period Expiration:
Financials
Revenue: $64,476,000.00

Net Income: $8,530,000.00

Total Assets: $257,116,000.00

Total Liabilities: $190,360,000.00

Stockholders’ Equity: $68,384,000.00
 Advisors

Lead Underwriter(s): 
Credit Suisse Securities (USA) LLC
Morgan Stanley & Co. International plc

Underwriter(s) :
HSBC Securities (USA) Inc.
UBS Investment Bank

Company Counsel :
Kirkland & Ellis International LLP
Underwriter Counsel :
Davis Polk & Wardwell LLP
Auditor :
Ernst & Young Hua Ming LLP
Transfer Agent :
Not Specified

Description of Business
We operate in China’s junior English Language Training, or ELT, market, which
refers to after-school English teaching and tutoring services provided by
training institutions to students aged three to 18. We are a leader in China’s
junior ELT market according to Frost & Sullivan, and we ranked second in 2016
with a market share of 10.7% in terms of gross billings in the premium segment.
Furthermore, in 2016, we ranked first in the junior ELT market in Beijing with a
market share of 11.4% and ranked second in the junior ELT market in tier-one
cities with a market share of 5.9%, both in terms of gross billings according to
Frost & Sullivan.
We pioneered the “subject-based learning” teaching philosophy in China, whereby
various subject matters, such as language arts, math, natural science and social
science are used to teach English. Our course offerings use interactive
courseware to create an immersive English learning environment that helps
students learn to speak and think like a native speaker. In addition, our
curricula are designed to foster leadership and critical thinking skills in
students while developing their self-confidence and sense of independence. This
innovative and holistic approach to teaching English is increasingly attractive
to Chinese parents who are looking for alternatives to traditional ELT programs
in China, which are more test-oriented.
In 2016 and for the six months ended June 30, 2017, we had 36,173 and 26,600
student enrollments, respectively, in self-owned learning centers. We currently
offer three flagship courses, namely Rise Start, Rise On and Rise Up, that are
designed for students aged three to six, seven to twelve and 13 to 18,
respectively. The curricula of Rise Start and Rise On use courseware that we
have licensed from Houghton Mifflin Harcourt Publishing Company, or HMH, a
leading American educational publisher, along with other self-developed content,
while the curriculum of Rise Up is primarily based on our self-developed
content. We also offer a number of complementary products to further enhance our
students’ learning experience, including Can-Talk, Rise Library Online, Rise
Camp, Rise Workshop and Rise Overseas Study Tour.
We devote significant resources to curriculum development to ensure that our
course offerings are up-to-date, engaging and effective. We also focus on
teacher training through a set of rigorous and systematic processes and programs
so that teachers in both self-owned learning centers and franchised learning
centers are able to deliver our curricula at a level consistent with our
standards. As of June 30, 2017, we had 1,315 teachers in self-owned learning
centers. Collectively, the quality of our course offerings and our unique
teaching philosophy has helped us develop a strong and powerful brand that is
attractive to parents.
Our business model is highly scalable. We have a network of both self-owned
learning centers as well as franchised learning centers. As of June 30, 2017, we
had a network of 246 learning centers across 80 cities in China, among which 56
were self-owned centers primarily located in tier-one cities and 190 centers
were franchised learning centers primarily located in non-tier-one cities. RISE
Education Cayman Ltd is a holding company without substantive operations and we
conduct our operations through PRC entities, including our variable interest
entity, or VIE, and its subsidiaries and schools. We have enjoyed significant
growth over the past few years. As our network of learning centers has expanded,
our brand has also strengthened. This has allowed us to maintain our position as
a market leader, command premium pricing, improve profitability and enjoy a 
highly loyal customer base. In 2016, we had a 67% student retention rate, 63% 
higher than the industry average of 41%, according to Frost & Sullivan and our 
student retention rate improved further to 70% in the six months ended June 30, 
2017.
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Our principal executive offices are located at Room 101, Jia He Guo Xin Mansion,
No.15 Baiqiao Street, Guangqumennei, Dongcheng District, Beijing 100062,
People’s Republic of China. Our telephone number at this address is +86 10-8559
9000. Our registered office in the Cayman Islands is at the offices of Maples
Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104,
Cayman Islands. Our agent for service of process in the United States is Cogency
Global Inc., located at 10 East 40th Street, 10th Floor, New York, N.Y. 10016.
Our website is en.risecenter.com.
Use of Proceeds
We estimate that we will receive net proceeds from this offering of
approximately US$50.5 million, after deducting underwriting discounts and
commissions and estimated offering expenses payable by us, including all of the
underwriting discounts and commissions of the selling shareholders. These
estimates are based upon an assumed initial offering price of US$13.00 per ADS,
the mid-point of the estimated range of the initial public offering price shown
on the front cover page of this prospectus. A US$1.00 change in the assumed
initial public offering price of US$13.00 per ADS would, in the case of an
increase, increase and, in the case of a decrease, decrease the net proceeds of
this offering by US$4.2 million, under these assumptions. We will not receive
any of the proceeds from the sale of ADSs by the selling shareholders
The primary purposes of this offering are to create a public market for our
shares in the form of ADSs for the benefit of all shareholders, retain talented
employees by providing them with equity incentives and obtain additional
capital. We plan to use the net proceeds of this offering as follows:
• US$30.0 million for repayment in full of a short-term facility;
• approximately US$8.0 million for business development, including business 
expansion through potential acquisitions;                                 
• approximately US$8.0 million for investment in product development; and
• the remainder for working capital and other general corporate purposes.
The terms of our US$30 million short-term facility require us to repay it in
full within ten business days of the completion of this offering. The proceeds
of this short-term facility were used to pay a portion of a US$87.0 million
dividend to our shareholders in September 2017. No portion of the proceeds will 
be used to make payments to our affiliates. The amounts and timing of any 
expenditures will vary depending on the amount of cash generated by our 
operations, and the rate of growth, if any, of our business, and our plans and 
business conditions. The foregoing represents our current intentions based upon 
our present plans and business conditions to use and allocate the net proceeds 
of this offering. Our management will have significant flexibility in applying 
and discretion to apply the net proceeds of the offering. If an unforeseen event
occurs or business conditions change, we may use the proceeds of this offering 
differently than as described in this prospectus.
As an offshore holding company, we are permitted under PRC laws and regulations
to provide funding to our PRC subsidiaries through loans or capital
contributions, subject to applicable regulatory approvals. We currently cannot
make loans or capital contributions to our PRC subsidiary, Rise Tianjin, without
first obtaining regulatory approvals, and if we decide to use the proceeds from
this offering within the PRC, we cannot assure you that we will be able to
obtain these regulatory approvals on a timely basis, if at all. However, we do 
not plan to use the proceeds from this offering to provide funding to Rise
Tianjin or to our VIE, its subsidiaries or schools and the uses specified above
can generally be accomplished without transferring funds into the PRC. Moreover,
we believe the current cash reserves held by Rise Tianjin, our VIE and its
subsidiaries and schools, combined with the cash generated from their operating
activities, will be sufficient for our operating and expansion needs within the
PRC over the foreseeable future.
Competition / Competitors
The junior ELT market in China is rapidly evolving, highly fragmented and
competitive. We are currently a leader in China’s junior ELT market and in our
core market, our major competitors include EF Kids and Disney English.
We believe the principal competitive factors in our industry include the
following:
• brand recognition;
• scope and quality of course offerings;
• capability of product development and teacher training;
• standardized management and scalable business model;
• customer satisfaction; and
• ability to effectively market course offerings to a broad base of prospective 
customers.
Given these factors, we believe we are in a favorable position as a provider of
junior ELT in China.

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