Skillful Craftsman, a Chinese Online Vocational Training Company, Seeks U.S. IPO
China's Skillful Craftsman Education Technology Ltd. has filed to sell 3 million of its ordinary shares worth up to $16.5 million in a New York public offering.
Based in Wuxi, Jiangsu province, provides online vocational training and virtual simulation experimental training, which allows college students to recreate experiments virtually. In addition, Skillful Craftsman provides tech services like software development and cloud services for private companies, academic institutions, and government agencies in China, according to its preliminary prospectus filed Thursday.
The seven-year-old company said it offers 407 vocational training courses in subjects including mechanics, electrical, auto repair, and construction through three online education platforms. As of Sept. 2019, Skillful Craftsman served 2.6 million fee-paying students.
For the six months through September, Skillful Craftsman reported $13.4 million in revenue and $5.1 million in profit compared with $11.1 million in revenue and $4.5 million in profit for the same period of 2018.
For the year ended March 31, Skillful Craftsman gave an unaudited revenue estimate of $28.7 million, up 16.2% year-over-year. Of those revenues, the company said, it generated 99.3% from its online education services. Estimated net income for the year reached $10.1 million, a 16.3% rise from a year ago.
Skillful Craftsman commented on the Covid-19 outbreak impact in its filing: "Unlike other enterprises in other industries, we believe that the COVID-19 epidemic may generate business opportunities for us, such as:
(1) Universities, colleges and schools in China postponed the start of spring semester till approximately May 2020. In the meantime, students have been required to study their curriculums online in order to comply with certain COVID-19 related requirements promulgated by the Ministry of Education.
(2) As a result of the aforementioned policies and the general "stay-at-home" environment generated by the epidemic, we believe that the remote learning and online education have become more widely accepted."
The company added that it offered one month of free learning for students during February.
Citing a 2019 China Online Vocational Education Market Report issued by Tencent Research Institution and Ipsos Group S.A. in its prospectus, Skillful Craftsman said the online vocational education market in China is expected to reach $16.9 billion this year. However, the research did not account for the impact of the Covid-19 outbreak and the stay-at-home policy that had pushed more people to switch to online services.
Skillful Craftsman said it intends to use the proceeds of its public offering to add more online courses and improve its mobile application.
Underwriters on the IPO are The Benchmark Company LLC and Axiom Capital Management Inc.
Skillful Craftsman has applied to become publicly traded on the Nasdaq Capital Market under the ticker symbol "NGJY." It expects to price its ordinary shares at between $4.50 and $5.50 apiece.
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