New Oriental Education Aces Its Debut Exam
Stock in a Chinese company that provides English-language training and test-preparation classes soared 39% in its debut.
The initial public offering of New Oriental Education & Technology Group Inc. closed at $20.88 a share yesterday on the New York Stock Exchange, up $5.88 from its IPO price of $15 a share. The company, based in Beijing, sold 7.5 million shares at a price above its expected range of $11 to $13, which was set by underwriters Credit Suisse Group and Goldman Sachs Group Inc.
As the first company to hold an IPO in the U.S. since mid-August, New Oriental's first-day performance should be heartening for investors who struggled through several spotty debuts this summer.
It was the third-best debut in the market this year, according to Thomson Financial, behind restaurant Chipotle Mexican Grill Inc. and health-care monitoring specialist Visicu Inc.
New Oriental, which began operating in 1993, offers English classes for children and adults, and it also provides preparation for U.S. college-admissions tests such as the Test of English as a Foreign Language, or TOEFL. It has been expanding in China, where English-language skills are considered important. It operates 25 schools and 111 learning centers; five years ago, it had just three schools and 23 learning centers.
That growth has taken a toll on New Oriental's financial results lately, as expenses have outpaced revenue growth compared with the past fiscal year. The company's net revenue for the year ended May 31 rose 20% to $96 million, but operating income declined 42% to $8 million and net income fell 65% to $6.2 million.
All the company's operating expenses increased, from teacher pay to rent to marketing costs.
New Oriental executives said yesterday that they plan to open six to eight schools each year in China, but they feel the bulk of their increased spending is behind them. "We're beginning to see the leverage and investments we made in the business over the last few years pay off," said Louis Hsieh, New Oriental's chief financial officer. He said about 60% of the offering's shares were sold to U.S. investors.
New Oriental plans to use proceeds from its offering for working capital and general corporate purposes, which may include expansion or acquisition of more facilities.
新东方在美国首日上市取佳绩
提供英文培训和考试辅导的一家中国公司在上市首日股价飙升了39%。
北京新东方教育科技集团(New Oriental Education & Technology Group Inc.)在纽约证交所的首次公开募股周四收于20.88美元，较每股15美元的首次公开募股(IPO)价格高出了5.88美元。这家总部设在北京的公司发售了750万股股票，IPO价格高出了由承销商瑞士信贷集团(Credit Suisse Group)和高盛集团(Goldman Sachs Group Inc.)预期的11至13美元的价格区间。
新东方是自8月中旬以来首家在美国进行IPO的企业。对于艰难熬过今年夏天亮点不多的几次IPO的投资者来说，新东方的首日表现令人振奋。
据Thomson Financial统计，这是今年以来市场上表现仅次于连锁餐厅Chipotle Mexican Grill Inc.和医疗监控系统开发商Visicu Inc.的IPO。
新东方创立于1993年，该公司为儿童和成人开办英文培训，也提供托福(TOEFL)等美国大学入学考试的辅导。新东方在注重英语技能的中国不断发展壮大。该公司经营着25所学校和111个学习中心，而在五年前，它只拥有3所学校和23个学习中心。
如此迅速的增长影响了近期新东方的财务表现。在过去的财年中，该公司的支出超过了收入的增长。在截至5月31日的财年里，该公司的主营业务收入增长20%，达9,600万美元，不过运营利润下降42%，至800万美元，净利润也降至620万美元，降幅65%。
该公司包括教师工资、租金及营销成本的所有经营费用均全面增加。
新东方的管理人士周四表示，他们计划每年在中国开设6至8所学校，支出大幅增加的局面基本上已经过去了。新东方的首席财务长Louis Hsieh表示，“杠杆效应已经开始产生了，我们在过去几年的投资开始有所回报。”他表示，约有60%的IPO股份卖给了美国投资者。
新东方计划将把募得资金用于运营资本和公司的一般用途，如扩张或收购。
Lynn Cowan
