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Tutoring company dazzles in US IPO

By Zhang Yuwei (China Daily)
Updated: 2010-11-04 12:26

NEW YORK -Xueda Education Group, the Beijing-based provider of after-school private tutoring services in China, had a dramatic rise on Monday after it raised about $128 million to beat expectations of its initial public offering (IPO).

The company sold 13.43 million American depositary receipts for $9.50 each, after offering them at $7.25 to $9.25.

The personalized one-onone, after-school tutoring company is the latest addition to the family of Chinese private educational companies listed on United States stock exchanges this year.

Other companies include TAL Education Group, which rose 50 percent in its debut in October and Global Education & Technology Group, which gained 16 percent on its first day last month.

“After-school tutoring in China has a long history. It started as jiajiao (private tutoring by individuals) offered by college students to primary or secondary school students. In recent years, this kind of service has developed into business models,” said Jin Xin, cofounder and vice-chairman of Xueda.

According to Bloomberg, Chinese companies (excluding closed-end funds and investment companies) have accounted for 13 percent of the $18.3 billion raised by IPOs in the US this year.

The data also indicate that five of the 10 largest gains among companies listing in New York this year have come from China.

According to the International Data Corp, private spending on education in China totaled 560.8 billion yuan ($84.3 billion) in 2008. About 82.3 billion yuan of that total was spent on afterschool tutoring alone.

In 2001, Xueda was set up by a group of three college graduates who saw potential in private tutoring in the Chinese market.

“We started from scratch as a website,” Jin said. In 2004, with its business and demand in private tutoring growing in China, Xueda began to spread learning across the country. Today, it has about 12,000 employees and operates 158 learning centers in 50 cities in China.