Jianzhi Education tests regulatory waters with first US IPO bid by Chinese online firm after Didi crackdown
- Online education firm Jianzhi is the first Chinese firm to file for an offshore listing since Beijing slapped new rules after the Didi Chuxing debacle
- Proposed cybersecurity review by Beijing is listed as a ‘risk factor’ in Jianzhi’s US exchange filing
Jianzhi Education Technology Group has become the first Chinese company to apply for a US flotation since Beijing proposed new rules to tighten scrutiny on offshore listings after the Didi Chuxing debacle. This is the company’s fifth attempt at an offshore stock offering, after four previous tries in Hong Kong failed.
The Beijing-based provider of online vocational education has proposed to raise up to US$50 million through the sale of American depositary shares, according to its filing to the US securities regulator. The firm did not specify which exchange it seeks to list its shares.
Following the latest regulatory development in China, Jianzhi Education has included cybersecurity reviews as part of its “risk factors” in the US filing.
Jianzhi also added that companies like them “face uncertainties as to whether such clearance can be timely obtained, or at all”.
The CAC’s proposed draft rules mandate tech platforms possessing the personal data of at least 1 million users to a review.
Despite the latest regulatory uncertainty, a US listing might be among the few options the 10-year company has to raise funds. The group previously made four attempts to list in Hong Kong between 2018 and 2020, with the latest application having “lapsed” last September, according to Hong Kong stock exchange data. It was not immediately clear why the company failed to list in the city.
For the three months ended March this year, Jianzhi Education recorded a net profit of 12.3 million yuan (US$1.9 million), a 30-fold increase from 400,000 yuan from a year ago. It plans to use the IPO proceeds to develop new education content, technology development, sales and marketing, according to its filing.
AMTD and Loop Capital Markets are underwriters for the deal.