BRIEF: Scholar Education to raise $31 million in share placement at 13% discount

After-school education services provider Scholar Education Group (1769.HK) announced on Wednesday that it plans to place 110 million new shares with more than six independent third party investors, representing about 16.3% of its enlarged share capital, to raise HK$242 million ($31.13 million). The placement price of HK$2.20 per share represents a 13.04% discount to the stock’s latest closing price.

The company said proceeds will be used to enhance its teaching quality and learning experience, including curriculum development and facility upgrades, as well as to fund AI-related projects tied to its core business, and for working capital and general corporate purposes.

Scholar Education provides private education services in South China, offering art, sports, painting, performance and general education courses, as well as after-school care services. It recorded revenue of 439 million yuan in the first half of this year, up 10.1% year-on-year; its net profit of 62.93 million yuan for the period was down 23.9%, and its gross profit margin of 34.3% was down about 10 percentage points from a year earlier.

The company’s stock opened higher on Thursday and closed at HK$3.01 by the midday break, up 18.97%. The stock is down about 40% over the past six months.

By Lee Shih Ta

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