Skillful Craftsman Soars 15% Early in Nasdaq Debut

The Chinese vocational training platform seeks to expand its virtual simulation programs with the new capital.
Capitalwatch StaffJul 23,2020,14:30

Shares in Skillful Craftsman Education Technology Ltd. (Nasdaq: EDTK) soared 15% as the Chinese company lifted off in trading Thursday in an initial public offering worth $15 million.

The Chinese vocational training provider sold 3 million ordinary shares on the Nasdaq Capital Market at $5 each. Earlier, Skillful Craftsman anticipated to price its shares at $5.50 to $7 apiece and raise up to $16.8 million.

Underwriters on the deal, The Benchmark Company LLC and Axiom Capital Management Inc., may acquire an additional 450,000 shares upon IPO, according to the prospectus filed Thursday.

EDTK provides 407 vocational training courses online, as well as technology services including software development and cloud services. Its online education courses feature virtual simulation experimental training, which lets students train in a virtual environment. It operates three platforms: Lifelong Education Public Service Platform, Vocational Training Platform, and Virtual Simulation Experimental Training Platform.

The company commented on the Covid-19 outbreak in its filings, saying the outbreak “may have long-term impact.” Specifically, EDTK said it offered a free month of training in February 2020, which will likely lead the company to miss its targeted revenue for the fiscal year ended March 31, 2020.

For the six months through September, Skillful Craftsman reported $13.4 million in revenue and $5.1 million in profit compared with $11.1 million in revenue and $4.5 million in profit for the same period of 2018.

For the year ended March 31, 2019, the company reported $24.7 million in revenues, up 66% year-over-year. Net profit was $8.7 million, up from $6 million in the preceding twelve months, it said.

Citing a 2019 China Online Vocational Education Market Report issued by Tencent Research Institution and Ipsos Group S.A. in its prospectus, Skillful Craftsman said the online vocational education market in China is expected to reach $16.9 billion this year. However, the research did not account for the impact of the Covid-19 outbreak and the stay-at-home policy that had pushed more people to switch to online services.

Skillful Craftsman said it intends to use the proceeds from its public offering to add more online courses, develop additional virtual simulation experimental programs, and to improve its mobile application for vocational services. EDTK also hopes to boost the development of its vocational education interaction platform and career advice services platform.

(Update) The stock as of 11 a.m. EST had fallen to around $4.70 per share.