China's largest
English-test-preparation school, which has helped hundreds of thousands of
Chinese students get into U.S. universities, is seeking its own debut in the
United States by listing its stock on the Big Board.
Beijing-based New Oriental Education & Technology Group Inc. registered
August 22 with the Securities and Exchange Commission to raise as much as $112
million (euro87.45 million) through an initial public offering.
According to its Web site, the company expects to price its IPO on or about
September 6. It plans to offer 7.5 million American depository shares at an
estimated price of $11 to $13 per ADS.
The company said it has applied to list its American depositary shares on the
New York Stock Exchange under the symbol "EDU."
During the upcoming first quarter, New Oriental expects to generate revenue
of$50.5 million (euro39.43 million) to $53 million (euro41.38 million), compared
with$40.76 million (euro31.82 million) for the same period last year. It expects
to turn a profit of $17.5 million (euro13.66 million) to $20 million (euro15.62
million), up from $10.25 million (euro8 million) last year, according to the
prospectus.
The company's revenue grew 46 percent in fiscal 2005 and 20 percent in fiscal
2006 to $96 million (euro74.95 million), but its net income decreased to $6.2
million (euro4.84 million) in 2006 from 2005's $17.7 million (euro13.82
million), according to the prospectus.
The company was founded in 1993 by Michael Yu, a former college English
teacher. Yu has told his story of founding New Oriental in lectures to the
school's students (including the writer of this article). Earning $12 (euro9.37)
a month as a teacher, Yu said his wife called him a "loser."
Rejected for a visa to study in the United States, Yu started his own
test-prep classes to coach others to pass the Test of English as a Foreign
Language, known as TOEFL, and the Graduate Record Examinations, or GRE, the two
tests required for foreign students to gain admission to U.S. graduate schools.
From the first class of only about 30 students, New Oriental has grown into
China's largest private education service provider with a network of 25 schools
and 111 learning centers in 24 cities as well as an online network that has
attracted 2 million registered users.
New Oriental benefits from Chinese students' increasing desire to study
overseas, especially in English-speaking countries such as the United States.
According to the United Nations Educational, Scientific and Cultural
Organization, China sends more students abroad than any other nation and Chinese
students make up about 14 percent of the global number of students studying in a
foreign country.
Research by the U.S. Commercial Service, an arm of the Commerce Department's
International Trade Administration, indicates that the total number of Chinese
studying abroad quintupled from the 1999-2000 academic year to more than 125,000
in 2002-2003. Of that number, nearly 65,000 studied in the United States.
New Oriental had over 872,000 students enrolled for fiscal 2006, ended May
31. Since its inception, the company has had over 3 million cumulative student
enrollments, its SEC filing said.
