Asia’s richest woman plans to list Chinese school operator Bright Scholar in New York

Bright Scholar Education, a company partly owned by Asia’s richest woman, is seeking to raise US$200 million through an initial public offering in New York in May.

The company, which operates K-12 international and bilingual schools under the “Country Garden” brand in China, has filed an application to the New York Stock Exchange. It was targeting a listing in mid-May, a source familiar with the matter said.

Founded in 1994, Bright Scholar is backed by Chinese property tycoon Yeung Kwok-keung’s family. Yeung is the founder and chairman of Country Garden Holdings, China’s third-largest property developer.

Yeung’s sister, Yang Meirong, and his daughter, 35-year-old Yang Huiyan, together own a 92.59 per cent stake in Bright Scholar. Yang Huiyan is also the largest shareholder of Country Garden and the richest woman in Asia with a net worth of US$12.6 billion, according to Forbes.

Since establishing its first Country Garden School in Foshan city of Guangdong province, Bright Scholar has expanded its network to 51 schools across seven provinces in China, covering kindergartens, elementary and secondary learning institutions. Most of the schools are close to Country Garden’s residential developments.

Bright Scholar had 29,230 students enrolled at its schools midway into the 2017 school year, a gain of 54.6 per cent from the 18,913 enrolled for the 2014 school year, the company’s filing with the NYSE showed.

China’s education industry is entering a “golden age”, thanks to rising household incomes and an inclination among Chinese families to spend on children’s education, particularly for international classes in preparation for overseas study.

“We are bullish on the education sector,” said Armand Yeung, managing director of Hong Kong-based Central Asset Investments. “It’s part of the concept of China’s consumption upgrade and is relatively difficult to be affected by the external environment.”

The company is likely targeting a listing in New York instead of Hong Kong owing to the tendency for the US markets to assign a higher valuation. Bright Scholar would also fall short of a main-board listing in Hong Kong because of the requirement that companies need to post a minium profit of HK$20 million (US$2.57 million) in the most recent year before listing.

Bright Scholar made a net profit of 2.9 million yuan (US$421,000) in 2016, reversing from losses in the previous two years.

To help raise funds for expansion, the mainland’s private school operators Wisdom Education International Holdings, China YuHua Education Corp and Minsheng Education Group listed in Hong Kong in the first quarter of this year.

Meanwhile in New York, China’s TAL Education Group saw its shares nearly double in the past 12 months.

Annual revenue for the K-12 education market in China rose to 217.3 billion yuan in 2016 and is expected to reach 370.3 billion yuan in 2021, according to consulting firm Frost & Sullivan. The group also forecast the number of students enrolled in Chinese K-12 private schools would rise to 775,900 by 2021 from 544,500 in 2016.