Full Product Education, the fifth largest independent textbook planning and publisher in China, submitted a prospectus on the Hong Kong Stock Exchange on April 22, 2024, to be listed in Hong Kong. On May 8, the China Securities Regulatory Commission accepted its listing filing application. This week, the China Securities Regulatory Commission's International Department issued supplementary material requirements for all products of education:
Full product education
Please ask your company to further explain the following matters, and ask a lawyer to check and issue a clear legal opinion:
1. Regarding equity structure construction and compliance with return mergers and acquisitions, please explain:
(1) Wang Yingdong obtained about 1% of Beijing Quanpin Culture and Education Technology Co., Ltd. (hereinafter referred to as “Beijing Quanpin”) through a capital increase. Please explain the actual payment of the capital increase. Quanpin Culture and Education (Beijing) Technology Co., Ltd. (hereinafter referred to as “Beijing Quanpin Technology”) acquired 100% of Beijing Quanpin's shares, please explain the transaction price, pricing basis and rationality, payment period, and tax payment details. Whether the above capital increase and acquisition process complies with the “Regulations on mergers and acquisitions of domestic enterprises by foreign investors”;
(2) Whether Beijing Quanpin Technology has fulfilled its foreign investment information reporting obligations, and whether Beijing Quanpin Technology and Beijing Quanpin have completed foreign exchange registration procedures for domestic direct investment;
(3) Beijing Leheng Culture & Technology Partnership (Limited Partnership) (hereinafter referred to as “Leheng Culture”), Beijing Shuren Culture & Technology Partnership (Limited Partnership), Beijing Aoxiu Education Consulting Partnership (hereinafter referred to as “Aoxiu Education”) cut all capital from Beijing. Please explain the reasons for the capital reduction and the details of tax payment;
(4) Concluding opinions on legal compliance with regulatory procedures such as foreign exchange registration, overseas investment, foreign investment, and tax payment involving the establishment of offshore structures and return investments abroad.
2. Regarding the situation of major shareholders, Choice Investment Co., Ltd., shareholders holding 5% or more of the shares , LTD, Leheng Investment Co. , There are domestic natural persons after LTD penetration. Please explain the basic situation of the relevant entities in accordance with the “Guidelines for the Application of Regulatory Rules, Overseas Issuance and Listing Category No. 2: Guidelines on the Contents and Format of Filing Materials”.
3. Regarding the situation of domestic operating entities, please explain:
(1) Whether the domestic operating entity is actually engaged in the “Internet data service” included in the scope of business, and whether the planning and distribution of teaching aids that your company is mainly engaged in falls under the “Foreign Investment Access Special Administrative Measures (Negative List)” (2021 edition) (hereinafter referred to as the “Negative Foreign Investment Access List”) “Prohibited Investment in the Editing, Publishing, and Production of Books, Newspapers, Periodical Products, and Electronic Publications” as stipulated in the “Negative Foreign Investment Access List”? Whether the issuer's field research, surveys, interviews, and data analysis activities carried out before preparing textbooks fall under the “Negative Foreign Investment Access List” regulations market research or social research business;
(2) From 2022 to 2023, the consideration for shares acquired by Li Hongmian, Liu Yan, Shao Xiaopeng, and Aoxiu Education was significantly lower than the transaction price during the same period. Please explain the pricing basis and rationality. External investors have successively withdrawn through capital cuts. Please explain the reason, price, pricing basis and rationality of the capital reduction;
(3) Beijing Quanpin and Wuhan Quanpin have provided free short videos explaining knowledge points on their websites and apps. They have primary and secondary school package course learning systems, teaching and research course preparation management systems, live internet teaching platforms, etc. Please explain whether there were any illegal acts of carrying out subject-related off-campus training during the reporting period, engaging in Internet cultural activities in violation of regulations, and carrying out value-added telecommunication services in violation of regulations, taking into account the business activities and copyright of relevant entities;
(4) The operating entity in your company has a Guoxue gamification learning system and an animation math gamification learning system. Please indicate whether they are engaged in game operation business and whether they must obtain the necessary game version number;
(5) Please explain the specific types of value-added telecom services involved in the ICP filing of Beijing Quanpin and Wuhan Quanpin;
(6) Please explain the circumstances of unsettled lawsuits and arbitration cases involving domestic operating entities, including the parties, basic facts, progress, etc.;
(7) Concluding opinion on the legal compliance of the establishment of major domestic operating entities and successive equity changes.
4. Regarding data compliance, please explain the status of products such as websites, apps, and applets developed and operated, the operating entities of these products, the scale of collecting and storing user information, data collection and use, whether there are situations where information is provided to third parties, and arrangements or measures for personal information protection and data security before and after listing.
Links to the full literature and education prospectus:
