IFC-backed Minsheng Education gains after Hong Kong IPO

The company sold one billion shares – excluding the overallotment option – for HK$1.38 apiece, the mid-point of the indicative range. The offering was more than two times oversubscribed. Minsheng Education’s stock opened at HK$1.44 and peaked at HK$1.69 before closing at HK$1.52. At the end of morning trading on March 23, it was at HK$1.53.

IFC, the investment arm of the World Bank, contributed $25 million as one of two cornerstone investors that between them covered approximately 27% of the offering, according to a prospectus. It owns 139.2 million shares, or a 13.92% stake. Minsheng Education is controlled by its chairman, Xuechun Li, who holds a 75% interest.

The company operates four schools in China, three in Chongqing and one in Inner Mongolia, offering formal higher education at undergraduate and junior college level. As of October 2016, it had 32,685 enrolled students and 1,090 teachers. Minsheng Education claims to be the 10^th largest privately owned provider of higher education in China, citing a Frost & Sullivan report.

Courses are designed based on market research and collaboration with partners in high-growth sectors such as healthcare and information technology. The initial graduate employment rate over the past few years has been around 90%, compared to a national average of 78%.

The bulk of the IPO proceeds will be used to acquire additional schools in China and overseas. IFC said its investment was driven by an objective to increase access to affordable higher education in China’s inland regions; its capital will go towards enhancing China Minsheng’s existing facilities and offering competitive programs in other parts of the country.

“Investments in education help to bring more people into the workforce with in-demand skills,” said Patrick Leahy, IFC’s regional head of industry for manufacturing and agribusiness services. “Our partnership with Mingsheng Education will help improve access to quality higher education in China and create opportunities for young people from all backgrounds.”

The company generated RMB426.3 million ($61.9 million) in revenue in 2015, up from RMB402.5 million the previous year. Net profit rose to RMB213.5 million from RMB196.9 million over the same period.

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• Topics
• Greater China
• Consumer
• IPO
• Expansion
• China
• Growth capital
• Education
• IFC
• Exit