21st Century Education is a leading education service provider in the Beijing-Tianjin-Hebei region. It has diversified businesses, including Shijiazhuang Polytechnic Vocational College, extracurricular training for grades 1-12, and preschool education.
The company's three major business segments are developing steadily. With the integrated development and industrial upgrading of the Beijing-Tianjin-Hebei region, we expect the market demand for private education to increase. Furthermore, the company has established a standardized operating and management model that can be quickly replicated to expand the business.
Focusing on the theme of “content+technology”, the company actively undertakes strategic transformation and actively invests in mergers and acquisitions of online, quality and innovative technology targets. Driven by the new technology business, we think future growth can be expected.
A leading education service provider with diversified businesses: 21st Century Education is a well-known private education service provider in the Beijing-Tianjin-Hebei region. As of SY18/19, the group has operated 15 schools in Shijiazhuang, Hebei Province, including 1 private university (Shijiazhuang Polytechnic Vocational College), 6 New Sky Training Centers and 8 New Sky Kindergartens. In terms of the number of students enrolled in SY17/18, Shijiazhuang Polytechnic Vocational College ranked second among private colleges in the Beijing-Tianjin-Hebei integrated region, and Xintianji Kindergarten ranked second and eleventh respectively among private preschool institutions in Shijiazhuang and Hebei Province. At SY18/19, the Group's various business segments achieved steady development. The total number of students in Shijiazhuang Polytechnic Vocational College and 8 kindergartens reached 30,119, an increase of about 59.2% over the previous year.
Benefiting from the integrated development of the Beijing-Tianjin-Hebei region: With the integrated development of the Beijing-Tianjin-Hebei region and the acceleration of industrial transformation and upgrading in Hebei Province, the market demand for students with highly qualified skills and training will increase, which will provide more development opportunities for educational institutions. In the future, the Group will also be deeply involved in the Beijing-Tianjin-Hebei region and will prioritize business expansion in this region.
Actively laying out the Internet education business: In December 2018, the company announced a 100% acquisition of Beijing Xintiandi Line Information Technology Co., Ltd., at a total cost of RMB 20 million. Established in March 2015, Xintiandi is a high-tech enterprise dedicated to driving the development of education through scientific and technological innovation. Its sub-brands include parents searching and reading aloud together. Users cover children and parents aged 3-12. We believe that Xintiandi has a clear integration effect with the company's existing business, mainly reflected in 1) online brands can expand the customer base of offline businesses and reduce marketing acquisition costs; 2) Xintiandi has a rich parent education and parent-child reading content system that complements the company's K12 business; and 3) Xintiandi's technology business and talent advantages will support the company's technology+content strategy transformation and lay the foundation for future technology sector development.
Future growth prospects are optimistic: 21st century education has diversified and stable businesses. Under the “Certain Opinions of the CPC Central Committee and the State Council on Deepening the Reform and Standardization of Preschool Education”, the company will carry out business transformation around “content+technology” or set up an industrial fund to actively acquire good technology platforms to supplement existing business. We believe that with a good business layout, the future growth prospects of the company are optimistic.