Decent exit, the "optimal solution" of Hai Liang Education

Recently, Hailiang Education announced the completion of the privatization retreat.

The institution once became famous because the market value surpassed Apple's "oolong". Until the delisting, its performance has remained rising for many years, and the stock price has remained rising.

Why does this company choose to delist without fading?

"Myth" in China stocks, retreating rapidly

Since June 2015, in overseas markets, the shares of shares in education are shrouded in education.

Within a month, Noahzhou actively delisted; Shuangwei Education was delisted by Nasdaq after being suspected of getting the group's 500 million assets because of the executives who were suspected of getting the group; Anbo Education also retreated from the New York Stock Exchange for a year, and then retired from the New York Stock Exchange. To the market outside the market; Global IELTS and China Education Group have not escaped the fate of mergers and acquisitions.

In a cloud of clouds, after half a year, Hai Liang Education sounded the bell in Nasdaq as scheduled.

On July 7, 2015, Hailiang Education was officially listed on the Nasdaq market. The stock code "HLG" was set to $ 7/ADS, with a total of 2.858 million ADS, with a total financing of 20 million US dollars. On the day of listing, Hailiang Education closed at $ 9.05 and closed up 20.67%.

Land in Nasdaq on the wind, Hailiang Education became a bright color in the Chinese education stocks at that time. What is more unexpected is that after two years of listing, Hailiang Education has attracted attention again because of the oolong incident.

On August 10, 2017, shortly after the opening of Hailiang Education, the stock price suddenly rose crazy, soaring to $ 19999.99 per share, an increase of 2020101.92%. According to statistics, according to the stock price at that time, the market value of Hai Liang Education has soared to $ 5.14 trillion. At that time, it was equivalent to the market value of 6 Apple companies added together, and it was the first company in history to make a $ trillions of dollars in history. The founder Feng Hailiang's value also surpassed Bill Gates to become the richest man in the world.

When the stock price fluctuated abnormal, Hai Liang Education announced the temporary suspension of trading. When the transaction was restored, the stock price fell to the normal range, closed at 10.35 US dollars, up 4.51%.

Later, although the stock price of Hailiang Education continued to fluctuate, it also maintained a relatively ideal increase. Until July 2021, Haeliang Education's stock price began to fall. The stock price bottoms out.

At the end of December 2021, Hai Liang Education announced that the board of directors received a preliminary non -binding proposal issued by the company's founder Feng Haili, which intended to be privatized for the privatization of $ 14.31/ADS.

On May 9 this year, Hai Liang Education reached the final agreement of privatization. The announcement shows that Hailiang Education has signed a final merger agreement with Haeliang Education (parent company) and He Merger Sub Limited. Haeliang Education's equity is worth about $ 369 million, and Feng Hailiang agrees to acquire the company at a price of $ 14.31/ADS. After the transaction is completed, Hai Liang Education will merge Hai Liang Education International Co., Ltd. controlled by Feng Hailiang.

Recently, Hai Liang Education issued an announcement that the merger was completed. It stated that according to the previously signed consolidated agreement and plan, it has been with a limited liability exemption company under the Liang Education Cayman Islands law, and it is also a wholly -owned subsidiary of Haeliang Education International Co., Ltd. to complete the merger.

According to the agreement between the two parties, the parent company was actually held by the company's founder Feng Hailiang. Due to the merger, the company has become a private holding company, and its US deposit stocks will no longer be traded on Nasdaq.

As of September 15th, Hailiang Education Newspaper was $ 14.3, an increase of 104.29%from the issuance price.

Maintaining performance?

On July 13, Hai Liang Education stated that he received a notice from Nasdaq a few days ago. Nasdaq pointed out that Hailiang Education failed to submit to the SEC in a timely manner for financial information for the first half of December 31, 2021. The annual shareholders' meeting within 12 months after the end of the fiscal year did not comply with the regulations that the Nasdaq market continued to go public.

In this regard, Hailiang Education stated that the company had previously concentrated resources on privatization transactions and expected to be delisted in the third quarter of 2022.

Although as of now, Hai Liang Education has not announced its performance in the first half of fiscal year in 2022. However, according to its previous performance, as of FY2021, its performance has remained stable for many years.

According to the financial report data, in fiscal 2017-2021, Hai Liang's education revenue was 296 million yuan, 604 million yuan, 1.023 billion yuan, 1.027 billion yuan, and 1.376 billion yuan, with a compound annual growth rate of 36%.

In the past five years, Hailiang's gross profit was 74.733 million yuan, 264 million yuan, 409 million yuan, 447 million yuan, and 647 million yuan, with a compound annual growth rate of 53.99%.

In terms of net profit, Hai Liang Education completed 168 million yuan, 231 million yuan, 313 million yuan, 370 million yuan, and 239 million yuan in fiscal 2017-2021. In the past five years, the compound annual growth rate was 7.32%.

As of the delisting, Hai Liang Education has maintained a growth trend in all the annual reports of the fiscal year that has been disclosed. Perhaps this is mainly due to the financial report cycle of Hailiang Education from July 1st to June 30 of the following year, and as of June 30, 2021, in fiscal year in fiscal year. Before landing. And in the first half of fiscal year in fiscal 2022, the days of Hai Liang Education may not be better. This can be seen from the operating conditions after Haeliang Education's "double reduction".

The Civil Affairs Law stipulates that any social organization or individual may control the implementation of private schools for compulsory education through mergers and acquisitions, agreement control. Hai Liang Education is undoubtedly within the scope of control.

Since September 1, 2021, massive education has lost control over 11 under compulsory education schools, accounting for 64.7%of the number of all schools. The loss of 243 million yuan in the impairment of the compulsory education stage also affected its profits.

More importantly, the "Civil Affairs Law" also stipulates that private schools that implement compulsory education shall not be traded with related parties with interests. Some analysts pointed out that this means that the operation and management transaction of Hailiang Education's private compulsory education schools under Hailiang Group will also be banned. Hai Liang Education also said that starting from fiscal 2022, it will stop providing operations and management services to Hubei Province Xiantao No.1 Middle School and Xinchang Nanrui Experimental School in Zhejiang Province, hosted by the company under the Hailiang Group.

The growth path is almost blocked, which may also be the reason why Hailiang Education chooses the rapid retreat.

Where do you go after delisting?

Without the secondary market, where will Hai Liang Education go from? Will it return to the domestic market?

First of all, returning to China does not seem to be good for Hai Liang education.

Although some people in the industry believe that "choosing to go public in overseas markets or returning to A shares is also a way. Returning to the A -share market, valuation will be greatly increased. It requires enough funds to promote it. Hailiang Education's equity relationship is relatively simple, and large shareholders have the status of absolute control. In addition to the cost of payment, the implementation of privatization can provide more space for capital operations. "

However, some people have questioned and analyzed that in the context of the national comprehensive standardization of off -campus training and strictly prohibiting the capitalization operation of educational institutions, the SFC's listing of education companies will inevitably be approved strictly. In addition, whether the financial status, equity structure and corporate governance of Hailiang Education can meet the A -share listing standards, there are also great uncertainty. Therefore, it is difficult for Hai Liang Education to return to A shares smoothly in the short term.

But does the delisting affect the financing of Hailiang Education?

In fact, as the popularity of stocks in education declined, the U.S. Securities Regulatory Commission frequently issued a delisting risk warning, the stock price of education companies listed in the United States fell, and the financing path of Hailiang Education in the secondary market has narrowed.

However, some media have quoted Zhang Lei, a postdoctoral researcher at Peking University: Privatization is a double -edged sword. If the privatization is successful, it will help Hailiang Education's strategic transformation, reduce the maintenance cost of listing, and improve strategic flexibility. At the same time, you can get rid of the huge pressure of performance from the open market.

As of the end of the fiscal year in 2021, Hailiang Education's total liabilities were 1.054 billion yuan, the asset -liability ratio was 32.22%, and the balance of cash and cash equivalent was 279 million yuan. In the short term, it seems that there is no particularly large debt pressure.

For Hai Liang education, the delisting is more lost. In 33 years of entrepreneurship, the 26 billion "Shaoxing richest man" and the founder of Hai Liang Group Feng Hailiang once said, "It is difficult for a century -old enterprise, but there are thousands of years in the world. Hai Liang's education will be an end to my life."

Today, the stock price and performance have lost their way to increase. The title of "U.S. listed company" is like a chicken rib, tasteless, and unfortunately abandoned ... Keeping decent and privatized, it may have become the "optimal solution to Hai Liang education. "".

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