上市捷报丨沙利文助力粉笔有限公司成功赴港上市(2469.HK)

Pink Pencil Co., Ltd. (Stock Code: 2469.HK) successfully listed on the Hong Kong Capital Market Main Board on January 9, 2023. The company is a provider of non-degree vocational education and training services in China, dedicated to offering high-quality non-degree vocational education and training services through technology. The company mainly provides a full range of recruitment and qualification examination training courses for adult learners seeking development in public positions and institutions, as well as in several other specialties and industries. Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') provides exclusive industry advisory services for Pink Pencil Co., Ltd.'s listing and hereby warmly congratulates them on their successful listing.

Pink Pencil Co., Ltd. (hereinafter referred to as 'Pink Pencil') successfully went public on January 9, 2023. The company plans to issue a total of 20 million shares globally, including 2 million shares in Hong Kong, China and 18 million shares internationally. The offer price per share is HK$9.90, with a net proceeds of approximately HK$119.9 million.

During the process of listing in Hong Kong, 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 relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the issuer communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

Investment highlights

The company is a leading non-degree vocational education and training service provider in China, with strong innovation capabilities and brand awareness;

The company has the largest online platform for vocational exam training, with a massive user base;

The company has an extensible collaborative business model, characterized by high innovation and OMO integration;

The company's creation of an effective learning experience stems from a high-quality teaching staff and strong content development capabilities;

The company boasts strong operational capabilities supported by technological innovation and data analysis;

The company has a visionary and experienced management team.

According to the Frost & Sullivan report, Pinker:

In 2021, the total market share of the top five market participants in China's non-degree vocational education and training industry based on revenue was 8.0%. In 2021, the company ranked third with a market share of 1.4%;

In 2021, the total market share of the top five market participants in China's vocational examination and training industry by revenue was 22.1%. In 2021, the company ranked second with a market share of 4.3%.

Overview of China's Vocational Education and Training Industry

China's vocational education and training (VET) system can be divided into academic and non-academic vocational education and training. Graduates of academic VET can obtain diplomas recognized by the Chinese government. In contrast, students of non-academic VET can acquire the knowledge and skills necessary for future employment but do not receive formal degrees or diplomas.

Data source: Analysis by Frost & Sullivan

According to a Frost & Sullivan report, the market size of China's vocational education and training industry increased from RMB 516.7 billion in 2016 to RMB 781.1 billion in 2021, with a compound annual growth rate of 8.6%. It is expected that by 2026, the market will reach RMB 1,097.9 billion, with a compound annual growth rate of 7.0% from 2021 to 2026.

Note: The total revenue of China's non-degree vocational education and training industry includes tuition fees paid by individual students or tuition income collected from individual students, after deducting (i) public expenditures made by the central and local governments for non-degree vocational education and training; and (ii) income earned from corporate training.

Source: Ministry of Education, Ministry of Human Resources and Social Security, analysis by Frost & Sullivan

China's non-degree vocational education and training industry

China's non-degree vocational education and training includes: (1) Vocational examination training, aimed at students who intend to enter public positions or institutions through recruitment exams, or those seeking professional certificates through qualification exams; and (2) Vocational technical training, aimed at individuals who wish to acquire a specialized skill within a specific field.

Data source: Analysis by Frost & Sullivan

Market scale of non-degree vocational education and training industry in China

As the number of students enrolled in higher education institutions continues to grow and the demand for professionals with necessary certifications and qualifications in China's job market rises, more and more graduating college students and young professionals are seeking to enhance their competitiveness and employment opportunities through vocational examination training services. As a result, the vocational examination training industry has grown faster than the entire non-degree vocational education and training industry. According to a Frost & Sullivan report, the market size of China's non-degree vocational education and training industry increased from 120.5 billion yuan in 2016 to 221.5 billion yuan in 2021, with a compound annual growth rate of 12.9%. It is expected to reach 331.7 billion yuan by 2026, with a compound annual growth rate of 8.4% from 2021 to 2026.

Source: Ministry of Education, Ministry of Human Resources and Social Security, analysis by Frost & Sullivan

According to a Frost & Sullivan report, the number of independent learners in China's non-degree vocational education and training industry increased from 2.54 million in 2016 to 3.68 million in 2021, with a compound annual growth rate of 7.7%. It is expected that by 2026, the number will reach 4.67 million, with a compound annual growth rate of 4.9% from 2021 to 2026.

Source: Ministry of Education, Ministry of Human Resources and Social Security, analysis by Frost & Sullivan

Overview of China's Vocational Examination and Training Industry

Career examination training generally targets adult learners, mainly including undergraduate graduates or students currently studying higher education, as well as employed individuals with a bachelor's degree (including associate degrees) or above. It provides recruitment examination training and qualification examination training for them, aiming to help them secure public positions and work in public institutions or certain professions and industries. Career examination training services typically prepare students for written tests and interviews, providing services through online and offline channels, including classroom learning and after-class exercises. Academic vocational education training, on the other hand, mainly assists undergraduate graduates and high school students in mastering specific professional skills through training courses and internships.

Recruitment and qualification exams are usually outcome-oriented. After passing the relevant exams, students can obtain job opportunities or qualification certificates, which motivates them to prepare for professional exams and increases their chances of passing. Some students (especially full-time adult students) tend to prefer flexible course study at times and locations that suit their preferences, while others are more willing to prepare for exams in a planned, focused, and dedicated manner. Therefore, there is still a continuous demand for online and offline professional exam training services. When choosing a suitable service provider, students usually make decisions based on whether the provider can meet their learning needs through appropriate teaching models and curriculum design.

Data source: Analysis by Frost & Sullivan

Market scale of China's vocational examination and training industry

According to a Frost & Sullivan report, the market size of China's vocational examination and training industry has increased from RMB 325 billion in 2016 to RMB 691 billion in 2021, with a compound annual growth rate of 16.3%. It is expected that by 2026, it will reach RMB 1102 billion, with a compound annual growth rate of 9.8% from 2021 to 2026. With continuous technological progress and the popularization of mobile devices, China's vocational examination and training services have shifted from a single offline classroom model to a combination of online and offline formats. In addition, during the COVID-19 pandemic, more and more vocational examination and training service providers have been exploring using online courses as an alternative to traditional offline teaching models, further promoting the integration of online and offline channels.

Source: Education Bureau, Ministry of Human Resources and Social Security, National Civil Service Bureau, Frost & Sullivan analysis

Competitive landscape of non-degree vocational education and training industry in China

The non-degree vocational education and training industry in China is relatively fragmented, with the total market share of the top five market participants by revenue in 2021 accounting for 8.0%. In 2021, PinkBook ranked third with a market share of 1.4%.

Data source: Analysis by Frost & Sullivan

Competitive landscape of China's vocational examination and training industry

The vocational examination and training industry in China is relatively fragmented, with the top five market participants by revenue accounting for a total market share of 22.1% in 2021. In 2021, we ranked second with a market share of 4.3%. In 2021, the market size of the vocational examination and training industry in China was RMB 691 billion, accounting for 31.2% of the non-degree vocational education and training industry market size in China.

Data source: Analysis by Frost & Sullivan

Frost & Sullivan has extensive research experience in the education industry and has assisted well-known enterprises in successfully listing on capital markets. Successful listings include: Jianzhi Education (NASDAQ:JZ), Reading Lang (2385.HK), Jintaiyang 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 China (1871.HK), Zhonghui Group (0382.HK), Thinking Le Education (1769.HK), Jiahong Education (1935.HK), China Oriental Education (0667.HK), Genshuixue (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), Boxun 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), Redu English (NASDAQ:REDU), 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 Education (1565.HK), Maple Leaf Education (1317.HK), and others.

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