Hong Kong-listed schools group Wisdom Education eyes further expansion
Company focusing on ‘Greater Bay Area’, and is on the look out for opportunities in Beijing and Shanghai
Hong Kong-listed Wisdom Education International Holdings, the largest private education group in southern China, said it had been approached by several local governments across the country to build schools amid mounting demand for better education.
Li Jiuchang, the group’s chief operating officer, told the South China Morning Post the availability of land and quality teaching staff play an important role when it comes to the company deciding on opening schools.
“It is not easy to find a large piece of land in a city’s downtown area to build a big school,” he said. “We will also assess the reserve of teaching staff in the cities before making plans for new schools.”
Wisdom Education, which was founded in 2003 in Dongguan, Guangdong province, is currently focusing on the “Greater Bay Area”, the Guangdong-Hong Kong-Macau region, where the Chinese authorities have stepped-up efforts to coordinate economic and infrastructure development.
But Li said the company was also eyeing expansion in Beijing and Shanghai, the mainland’s most developed cities. “We are paying close attention to growth opportunities in Beijing and Shanghai,” he said. “When opportunities arise, we will integrate our resources to set up new schools as quickly as possible.”
Wisdom Education runs seven campuses that offer education to 41,200 pupils, from primary school to high school. Of these, five are based in Guangdong while the other two are in Weifang in Shandong province and Panjin in Liaoning province.
The number of elite schools is increasingly being viewed as a yardstick of a city’s overall competitiveness, which has prompted local authorities to attract established education companies to build schools in their areas.
In January 2017, Wisdom Education received HK$796 million (US$101.7 million) in an initial public offering in Hong Kong, setting the stage for other mainland private education providers such as China New Higher Education Group to raise funds on the city’s stock exchange.
In China, education has emerged as a lucrative industry buoyed by people’s willingness to spend on schooling for their children.
In Shanghai, parents have to spend up to 10 million yuan (US$1.58 million) to own a flat that could confer the right for their children to attend an elite public school.
Private schools with better educational services are highly sought after among young parents, who are willing to pay annual tuition fees of as much as 100,000 yuan.
“Young parents are aware that good K-12 education for their children is the best investment in their lifetime,” said Yan Jinglan, a professor with the East China University of Science and Technology. “Rising household incomes are also supporting the growth of the education sector.”
K-12 refers to education from preschool through to high school.
Wisdom Education aims to have 15 schools in operation over the next three years. It has signed agreements with authorities in Guangzhou, Jiangmen and Zhaoqing to build schools.
For the financial year ending on August 31, Wisdom Education reported a net profit of 200.2 million yuan, up 29.7 per cent from a year ago.
Its shares closed at HK$6.16 on Friday, an increase of 362.4 per cent from its IPO offering price of HK$1.7.