(CapitalWatch, Aug. 24, New York) Jianzhi Education Technology, a Chinese professional training company, is set to celebrate its initial public offering this week on the Nasdaq and raise up to $35 million.
The Beijing-based company initiated the pursuit of a U.S. listing more than a year ago, and it has kept its SEC filings updated throughout the freeze on U.S.-China listings. Now, the wait has paid off – Jianzhi is scheduled to lift off on the Nasdaq Global Select Market under the symbol "JZ" on Friday, Aug. 26.
Jianzhi is offering 5 million of its American depositary shares in the price range of $5 to $7 a share. At the top of the range, the company would leave with $35 million in IPO proceeds. Plus, the underwriters, AMTD and Univest Securities, may purchase an additional 750,000 ADSs to cover over-allotments.
That's a downsizing of the $50 million in IPO proceeds that Jianzhi targeted last year. The strains on the markets and the ongoing U.S.-China uncertainties over audits have weighed on investor sentiment.
Despite the macro difficulties, Jianzhi has seen its business grow. Net revenue in 2021 rose 17% from 2020 to $74.3 million, according to the prospectus. Net income declined 39% year-over-year to $8.3 million.
After China's massive crackdown on K-12 tutoring that pretty much killed the formerly wildly growing market in 2021, professional education providers like Jianzhi saw increased investor interest. This took place especially after President Xi called to increase the nation's quality workforce and talent training.
In addition, Jianzhi cited the Covid-19 outbreak as a tailwind – as a "provider of digital educational content in China," it saw its business grow as people were confined to their homes on isolation measures.
Jianzhi cited market research by Frost & Sullivan saying it was the seventh-largest in China with 1.1% market share in terms of revenue for digital content provided to higher education schools – and the largest online career training services provider for higher education schools with a market share of 66.4% in 2021.
The proceeds from the IPO will fund the development and acquisition of new educational content, R&D on technology capabilities, sales and marketing, and customer service improvement.