Beijing Quantum Song Technology Co., Ltd. (referred to as 'Quantum Song') successfully went public on January 25, 2023, issuing 3,250,000 American Depositary Receipts (ADRs) globally. Each ADS represents three Class A ordinary shares, with an issue price of $12.50, raising approximately $40.63 million.
During the process of listing in the US, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the writing of relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication between the issuer and NASDAQ and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing various feedbacks from NASDAQ regarding industry issues.
Investment highlights
The company is China's largest platform providing personalized adult learning with strong growth potential;
The company has innovative teaching methods that achieve high user engagement;
The company has an extensible business model that allows for the rapid launch of new courses and new business opportunities;
The company has a strong technical foundation and business intelligence capabilities;
The company has a visionary and experienced management team, as well as an entrepreneurial corporate culture.
According to the Frost & Sullivan report, in terms of revenue for 2021, the company:
Ranked first in the personal adult interest learning market;
Ranked first in the financial literacy education market within the personal adult interest learning sector.
Overview of the Adult Learning Market in China
Adult learning refers to courses provided for adults who wish to acquire knowledge and skills or those who need professional training at the workplace. Adult learning does not include courses offered for degrees or diplomas awarded by the Ministry of Education or other Chinese educational institutions. According to a Frost & Sullivan report, in terms of revenue, the market size for adult learning in China increased from 383.3 billion yuan in 2017 to 566.4 billion yuan in 2021, with a compound annual growth rate of 10.3% from 2017 to 2021 and is expected to reach 994.7 billion yuan by 2026, with a compound annual growth rate of 11.9% from 2021 to 2026.
Compared to the offline adult learning market, the online adult learning market has experienced a faster growth rate in the past period. Thanks to user awareness shifts and the accessibility, affordability, and efficiency brought about by technological advancements for online learning, more and more users are viewing online learning as a helpful way for personal development. It is expected that online adult learning will continue to maintain a growth rate higher than that of the offline market in the future.
According to a Frost & Sullivan report, the online adult learning market in China grew from 441 billion yuan in 2017 to 1264 billion yuan in 2021, with an annual compound growth rate of 30.1% from 2017 to 2021. It is expected to reach 2881 billion yuan by 2026, with an annual compound growth rate of 17.9% from 2021 to 2026. The market share of online adult learning, measured by revenue, increased from 11.5% in 2017 to 22.3% in 2021 and is expected to reach 29% by 2026.
Data source: Analysis by Frost & Sullivan
The consumer group in China's adult learning market mainly includes individuals and enterprises. Among them, individual learners focus on acquiring knowledge and skills, while the enterprise consumer group mainly focuses on providing professional training services for their employees.
Overview of the Personal Adult Learning Market in China
According to the types of courses provided, the Chinese personal adult learning market can be subdivided into interest-based learning, professional training, language training, and entrance examination training for higher education institutions. In terms of revenue, the market size of personal adult learning in China reached 428.4 billion yuan in 2021, an increase from 276.3 billion yuan in 2017 with a compound growth rate of 11.6% this year. It is expected to reach 763.5 billion yuan by 2026, with a compound annual growth rate of 12.2% between 2021 and 2026.
Data source: Analysis by Frost & Sullivan
Among them, the personal adult interest learning market is an important component of the overall personal adult learning market. Its courses are mainly designed to meet adults' needs for personal improvement and learning during their spare time, as well as their pursuit of learning in different fields of life, including financial knowledge, health, art, and music. In terms of revenue, the scale of China's personal adult interest learning market grew from 956 billion yuan in 2017 to 1399 billion yuan in 2021, with an annual compound growth rate of 10% between 2017 and 2021. It is expected to grow to 3042 billion yuan by 2026, with an annual compound growth rate of 16.8% between 2021 and 2026.
Data source: Analysis by Frost & Sullivan
Compared to offline learning, the online personal adult interest learning market has experienced faster growth in the past period and is expected to continue this trend from 2021 to 2026. In terms of revenue, the online personal adult interest learning market reached 227 billion yuan in 2021, an increase from 114 billion yuan in 2017 with a compound annual growth rate of 18.8%. It is estimated that the market size will reach 621 billion yuan by 2026, with a compound annual growth rate of 22.3% from 2021 to 2026.
The personal adult interest learning market can be divided into financial literacy education courses and other personal adult interest learning courses based on the types of courses offered. Financial literacy education courses mainly provide adults with knowledge and skills to acquire investment and wealth management capabilities, covering different investment products as well as insurance products, designed for groups with different financial goals. In terms of revenue, the financial literacy education market in the personal adult interest learning market reached 7.9 billion yuan in 2021, is expected to reach 18.8 billion yuan by 2026, and is projected to have a compound annual growth rate of 18.9% between 2021 and 2026.
Data source: Analysis by Frost & Sullivan
The financial literacy education market in the personal adult interest learning market offers courses that can be categorized based on the type of financial assets: stocks, funds, real estate, bonds, financial derivatives, and other alternative investment assets. These courses are designed to meet people's needs for achieving different financial goals.
Data source: Analysis by Frost & Sullivan
The financial literacy education market in the personal adult interest learning market can be further divided into online and offline learning. In terms of revenue, the online financial literacy education market in the personal adult interest learning market grew from 500 million yuan in 2017 to 6.5 billion yuan in 2021, with a compound annual growth rate of 6.8% from 2017 to 2021, and is expected to grow to 17.1 billion yuan by 2026.
Data source: Analysis by Frost & Sullivan
competitive landscape
The adult learning market in China is relatively fragmented, with a large number of market participants. In terms of revenue in 2021, the combined market share of the top five participants accounted for only 3.3% of the overall market, while the company's market share was 0.4%. Unlike other participants, the company mainly provides services focused on individual adult interest learning courses. The individual adult interest learning market is also relatively fragmented, with the combined market share of the top four participants accounting for only 3.5% of the overall market in 2021. The company is also the largest provider of individual adult interest learning services, with a market share of 1.7%. In terms of revenue in 2021, the company is the largest provider of online financial literacy education services in the individual adult interest learning market, with a market share of 36.9%.
Overview of the Professional Training Market in Chinese Enterprises
The main consumer groups for adult learning services in China include individuals and enterprises. The trend of enterprises being willing to pay for systematic and carefully designed corporate professional training courses is becoming increasingly evident, driving the development of the Chinese corporate professional training market. In terms of revenue, the market size of the Chinese corporate professional training market increased from 107 billion yuan in 2017 to 1379 billion yuan in 2021, with a compound annual growth rate of 6.5% from 2017 to 2021, and is expected to grow to 2312 billion yuan by 2026, with a compound annual growth rate of 10.9% between 2021 and 2026. Among them, online learning has also experienced faster growth, reaching 29 billion yuan in 2021, with a compound annual growth rate of 28.3% from 2017 to 2021, and is expected to reach 717 billion yuan by 2026, with a compound annual growth rate of 19.8% over the next five years.
Frost & Sullivan has extensive research experience in the education industry, assisting well-known enterprises in successfully accessing capital markets. Successful listings include: Pink Book (2469.HK), Jianzhi Education (NASDAQ:JZ), Dulong Lang (2385.HK), Golden Sun Education (NASDAQ:GSUN), Tongcai Education (2175.HK), South China Vocational Education (6913.HK), Yiqi Education (NASDAQ:YQ), New Oriental (9901.HK), Hong'en Education (IH.NYSE), Lixiang Education (NASDAQ:LXEH), Neusoft Education (9616.HK), Lide Education (1449.HK), Huaxia Audio-Visual (1981.HK), Dashan Education (9986.HK), Huaxia Boya (NASDAQ:CLEU), Meilian English (NASDAQ:METX), Jianqiao Education (1525.HK), Chenlin Education (1593.HK), Huali University Group (1756.HK), Youdao (DAO.NYSE), Xiang International Education (1871.HK), Zhonghui Group (0382.HK), Think Learning Education (1769.HK), Jiahong Education (1935.HK), China Oriental Education (0667.HK), Genshuo Online (GSX.NYSE), New Oriental Online (1797.HK), Kepai Education (1890.HK), Ginkgo Education (1851.HK), Excellence Education (3978.HK), Chunlai Education (1969.HK), Hope Education (1765.HK), Bojun Education (1758.HK), Tianli Education (1773.HK), Puxin Education (NEW.NYSE), 21st Century Education (1598.HK), Huanggang Education (8105.HK), Jingrui Education (ONE.NYSE), Xinhua Education (2779.HK), China Education Holdings (0839.HK), Siji Education (FEDU.NYSE), Red English (NASDAQ:REDU), Bole Education (BEDU.NYSE), New Higher Education Group (2001.HK), Minsheng Education (1569.HK), Yuhua Education (6169.HK), Ruijian Education (6068.HK), 51Talk (COE.NYSE), Chengshi Foreign Language Education (1565.HK), Maple Leaf Education (1317.HK), etc.
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