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Fenbi, a Chinese educational platform for future teachers and civil servants, filed an application for listing on the Hong Kong Stock Exchange (HKEx) on Monday. New funds from a potential IPO would be implemented to enrich course content, expand student groups, strengthen R&D and for other purposes.
According to its prospectus, the Beijing-based company opened in 2013, mainly engaged in vocational education services for adults. From online live streaming and recorded online training courses, the company then launched offline training in May 2020.
Fenbi’s revenue in 2019, 2020 and the first nine months of 2021 was $1.16 billion ($184 million), $2.13 billion and $2.63 billion respectively. The company achieved adjusted net profit in 2019 totaling 175 million yuan. However, its net loss in 2020 was 363 million yuan, dropping to 782 million yuan in losses from January to September 2021.
Online training, offline training and educational materials represent Fenbi’s three main sources of revenue, although the proportion of revenue from online channels is decreasing year by year.
The company’s online training revenue in 2019, 2020 and the first nine months of 2021 was 657.4 million yuan, 986.2 million yuan and 993.3 million yuan respectively, accounting for 56.7% respectively. , 46.2% and 37.7% of total income. During the same period, offline education services revenue accounted for 30.5%, 41.6% and 49.8% respectively.
Fenbi noted in its prospectus that “significant costs have been spent to support offline courses, thus affecting short-term business performance.”
Fenbi’s online and offline businesses have developed a cooperative relationship. In 2021, about 67.5% of paid students in offline courses came from paid online services. As of December 31, 2021, the company’s online platform had accumulated 45.3 million paying users online and more than 1.7 million paying users offline.
Prior to the IPO, Fenbi CEO Zhang Xiaolong holds a total of 35.33% stake in the company. Tencent
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Vocational education and training in China can be divided into academic and non-academic sectors, while the latter includes vocational examination training and technical training. According to a report by Frost & Sullivan, the market size of China’s vocational education and training industry will reach 1.11 trillion yuan in 2026. the country’s vocational examination and training totaled 64.6 billion yuan in 2020, and is expected to reach 123 billion yuan in 2026.