New Oriental Stock Soars 16% in Hong Kong Debut

The private education giant's offering was oversubscribed 1.55 times by local investors and roughly 6.4 times by global investors.
Anthony RussoNov 09,2020,17:56

Shares of New Oriental Education & Technology Group (HKEX: 09901; NYSE: EDU) surged as much as 16% Monday in its Hong Kong debut.

After opening at HK$1,381 per share, the Chinese private education giant became the first stock that has exceeded more than 1,000 Hong Kong dollars, according to Big News Network. At the close of trading, it finished nearly 15% higher at HK$1,365 per share. Its Hong Kong offering was oversubscribed 1.55 times by local investors and roughly 6.4 times by global investors.

Through the sale of 8.51 million shares priced at HK$1,190 each, New Oriental raised HK$10.13 billion ($1.3 billion) in its secondary listing. If the underwriters exercise their 30-day over-allotment option, New Oriental could raise as much as HK$11.65 billion. Credit Suisse, BofA Securities, and UBS are the joint sponsors and joint global coordinators on the deal.

As a result of the tensions between Beijing and Washington, some Chinese U.S.-listed firms have moved their shares to Hong Kong. One of the latest to do so was the data firm GDS Holdings (Nasdaq: GDS; HKEX: 09698), which made its debut earlier this month after raising $1.67 billion in its Hong Kong offering.

EDU plans on using the proceeds from the offering to invest in technology to improve the learning experience for students, expand its business, make acquisitions and investments, as well as for general corporate purposes and working capital needs.

Founded in 1993, New Oriental has been listed on the New York Stock Exchange since 2006 when it raised $112.5 million. As of August, New Oriental operated 1,472 schools and learning centers.

In the first fiscal quarter ending Aug.31, New Oriental posted revenues of $986.37 million, down 8% year-over-year on GAAP earnings per share of $1.09, which both handily beat analysts estimates.

Intraday in New York, the stock in New Oriental was trading 30 cents lower at $178.90 per American depositary share. Shares of New Oriental have risen 44% year-to-date.

Topics:New Oriental, GDS Holdings.