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Puxin "NEW" Education Debuts on NYSE; Stock Soars 25%

The stock of the fast-growing Chinese education company soared 25 percent to $21.24 per ADS on the morning of its initial public offering Friday.

CapitalWatch Staff
    Jun 15, 2018 8:31 AM  PT
Puxin "NEW" Education Debuts on NYSE; Stock Soars 25%

(Updated to reflect early trading stock price)

Puxin Ltd., a provider of after-school education in China, swung open its doors to U.S. stockholders today under the ticker symbol "NEW," and within two hours was trading up nearly 25 percent at $21.24 per American depositary share on the New York Stock Exchange.

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Puxin was trading at $21.24 per share, up nearly 25 percent, within two hours of its initial public offering on the NYSE

(Source: Thomson Reuters Eikon)

The company priced its shares at the lower end of its estimated range, at $17 per ADS. With this offering of 7.2 million ADSs, Puxin has raised $122.4 million. Underwriters have an option to purchase an additional 1.08 million shares. Each ADS represents two ordinary shares.

Lead underwriters on the deal are Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.

Founded just four years ago, the company, based in Beijing, is already the third-largest education service in China by student enrollments, according to a report by Frost & Sullivan.

The founder, Yunlong Sha, Puxin's chairman and chief executive officer, previously served as senior vice president at New Oriental Education & Technology Group (NYSE: EDU) and has 20 years of experience in the industry. Sha holds 47 percent of Puxin's share pre-IPO. 

Puxin's chief financial officer, Peng Wang, also comes from New Oriental, where he served as a school principal.

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(Source: Puxin Ltd., from amended prospectus dated June 1)

The Puxin network comprised 48 schools and 397 learning centers in 35 Chinese cities as of March 31. In 2017, nearly 1.3 million students enrolled in the school's programs, representing a 180 percent increase from 2016. This was the fastest growth among major after-school education service providers in China, according to the Frost & Sullivan report. In the first three months of this year, student enrollments rose 41 percent year-over-year to 261,000.

The company said the proceeds from the IPO would mainly finance strategic acquisitions of new units and the expansion of its network. In addition, 15 percent would be applied to technology and online learning, 10 percent to marketing, and 5 percent for working capital and other purposes.

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