GSX Techedu Lifts off on NYSE, Raises $208 Million

Shares in the Chinese education provider jumped 5 percent within the first hour of trading on the New York Stock Exchange.

Author: Belinda Zhou   

GSX Techedu Inc. (NYSE: GSX) debuted on Wall Street Thursday, raising $207.9 million in its initial public offering and was trading up 5 percent, at 11 per share, within the first hour.

The Beijing-based education provider sold 19.8 million American depositary shares at $10.5 apiece, the midpoint of its pricing range of between $9.50 to $11.50.

Underwriters on the deal, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays Capital Inc., and CLSA Ltd. may purchase up to an additional 3 million ADSs for over-allotment.

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GSX, which provides K-12 large-class tutoring services, was founded five years ago and reached profitability last year. For the year through December, it reported $2.9 million in income in contrast to net loss of $13 million in 2017. Revenue tripled year-over-year to $59.2 million last year. Gross billings for the full year reached $97.6 million, up 438 percent, according to the prospectus.

For the first quarter of 2019, GSX reported income of $5.1 million and revenue of $40.1 million, an increase of 474 percent from the same period a year ago.

GSX's business covers tutoring in K-12 courses, as well as foreign language, professional, and interest courses, with 767,000 student enrollments last year and a surge from 80,000 from 2017. In the first three months of this year, GSX said student enrollments tripled year-over-year to 211,000.

The company enjoyed high interest from investors in its pre-IPO period, when the deal was oversubscribed 2.5 times before going public, according to an external representative of GSX.



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