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First High-School Education Group Co., Ltd.
Lillian Liu
Director, IR & Financing
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Company Profile

Our Mission

Our mission is to become a leader and innovator of private high school education in China.

Our Business

We are the largest operator of private high schools in Western China and the third largest operator in all of China in terms of student enrollment as of December 31, 2019, according to the CIC report. We experienced the fastest growth rate with a CAGR of 77.3% in terms of high school student enrollment and with a CAGR of 41.4% in terms of the number of high schools from December 31, 2015 to December 31, 2019, among top 20 operators of private high schools in China.

We believe we are well-positioned to seize the enormous and sustainable demand for high-quality high schools in China. The total revenues generated by the private high school education industry in China is expected to increase from RMB43.4 billion in 2018 to RMB106.1 billion in 2023, and the penetration rate of private high schools in China in terms of student enrollment is expected to increase from 13.8% in 2018 to 19.5% in 2023,All of our schools are strategically located in Western China, which has seen growing demand for high-quality educational resources.Western China has a massive population representing approximately a quarter of the national total, but the local students have limited access to quality educational resources, and as a result, often struggle to do well in Gaokao, the university entrance examinations administered in China, evidenced by the relatively low acceptance rate of first-tier universities as compared to other regions. Parents in Western China are able and willing to increase their spending on quality secondary education, driven by the higher disposable income growth rate compared to the national average.

We trace our history back to August 2012 when we established our first school to provide after-school tutoring services. We have since developed a network of 13 schools, offering nine high school programs, seven middle school programs and three tutorial school programs for Gaokao repeaters, as of December 31, 2019. We have also collaborated with local governments and other third parties in China and expect to launch four new schools offering high school programs in September 2020. In addition, we have also established Chinese-English bilingual programs for students interested in pursuing higher education overseas. As of December 31, 2019, we had 21,236 students across our school network with 13,660 high school students (including Gaokao repeaters) and 7,576 middle school students. We are dedicated to recruiting teachers who hold sufficient academic credentials, are devoted and active professionals in their field, and are committed to improving their students’ academic performance. As of December 31, 2019, we had a total of 1,525 teachers in our schools, among whom approximately 99.0% had a bachelor’s degree. As of the same date, we had a total of 33 principals and deputy principals across our school network, who are responsible for the strategic development and operation of our schools.

We are committed to investing in our teachers and principals and offer them opportunities to grow with us. We have designed systematic training courses and established a comprehensive internal training system to assist our teachers and principals in their professional development, including regular training sessions to discuss educational theories, methodologies and techniques.

We have extensive experience in providing high-quality education services, as evidenced by the academic achievements of our students. In 2019, approximately 80.5% of our high school graduates who participated in Gaokao in Western China were admitted into universities in China, and approximately 39.8% of such graduates were admitted into first-tier universities in China. In comparison, approximately 39.3% of the high school graduates who participated in Gaokao in Western China were admitted to universities in China, and approximately 12.6% of such graduates were admitted into first-tier universities in China during the same period, Our middle school students also achieved outstanding results in Zhongkao, the high school entrance examinations administered in China.

We have a highly scalable, asset-light business model premised on collaboration with third parties, including local governments and real estate developers. Our partners typically contribute the land and school facilities. Our government partners also provide other forms of support, such as subsidies and preferential tax treatment. In return, we provide educational resources, teachers and staff, and school management expertise. Our services raise local education standards for the under-developed areas and often invigorate the local economy by attracting more talents to live and work in the area. We currently operate nine schools pursuant to cooperative arrangements with local governments.the industry average cost saving that the government can achieve in establishing new schools by collaborating with private schools is approximately 65%.Operating private secondary schools under the current regulatory regime requires stringent approvals from the relevant governments in China. As such, we believe that, with our proven track record, our ability to maintain cooperative relationship with local governments to obtain not only the approval but also the support to operate our schools has created strong entry barriers and underpins our long-term growth. We have also cooperated with local governments to provide management services for two public schools in Inner Mongolia Autonomous Region for annual management service fees. In addition to collaborating with local governments, we currently operate four schools by leasing lands from third parties and expect to launch a school in Shaanxi province in September 2021 in collaboration with a real estate developer. Our synergistic relationship with third parties allows us to launch new schools with relatively lower upfront capital expenditures.

We have also developed a standardized and centralized school management system. We have devised a series of standardized measures and protocols for each stage in a school’s development and for a wide variety of scenarios in school management and operation, which we require all of our schools to consistently adhere to. Our standardized and centralized management model allows us to secure control over key resources, including teaching methods, education contents and school management experience, making our business success highly replicable and scalable.