China Internet IPO: ChinaEdu Corp.

ChinaEdu Corporation (CEDU) is an online provider of educational services in China. The company primarily provides online degree programs of leading Chinese universities.

All quotations are from the company's most recent S-1 filing with links provided.

CHINAEDU CORP. (CEDU)
Business Overview (from prospectus)

We are a leading educational services provider in China. Our primary business is to provide comprehensive services to the online degree programs of leading Chinese universities. Our services for online degree programs include academic program development, technology services, enrollment marketing, student support services and finance operations. We also operate private primary and secondary schools, market and support international post-secondary and English language curriculum programs to established learning institutions, and offer online interactive tutoring services to primary and secondary school students. We believe we are the largest service provider to online degree programs in China in terms of the number of higher education institutions that we serve and the number of student enrollments that we support. In 2007, the largest online degree program that we service, Renmin University of China, was named the largest online degree program in China in terms of student enrollment numbers by Xuexigang.com and Chinaonlineedu.com, two online education and distance learning websites.

Offering: 6.8 million shares at $10.00 - $12.00 per share. Net proceeds of approximately $52.4 million will be used to expand our existing lines of business, to develop the company's initial network of learning centers, to complete the construction of the new campuses at the Jingzhou School (Southern Campus) and Anqing School, and for working capital and general corporate purposes.

Lead Underwriters: Bear Stearns, Piper Jaffray

Financial Highlights:

Our net revenue increased 69.0% from RMB126.4 million for the year ended December 31, 2005 to RMB213.5 million ($28.1 million) for the year ended December 31, 2006...Our total cost of revenue increased 51.2% from RMB53.1 million for the year ended December 31, 2005 to RMB80.3 million ($10.6 million) for the year ended December 31, 2006...Our operating expenses consist of general and administrative expenses, selling and marketing expenses and research and development expenses. Our operating expenses increased 22.6% from RMB62.0 million for the year ended December 31, 2005 to RMB76 million ($10 million) for the year ended December 31, 2006.

Competition:

There are two main components of competition within the online degree program market: competition among service providers to attract and retain additional university partners; and competition among online degree programs seeking to enroll students. We currently serve nine out of the 67 universities that have been approved to offer online degree programs in China and we have contracted with two additional universities that are awaiting regulatory approval to start their programs. There are 58 other universities currently offering online degree programs that either independently run their programs or outsource services for their programs to other service providers. While we are trying to establish relationships with additional universities with respect to their online programs, several companies offer services that compete with our service offerings either on a comprehensive basis or, more commonly, on a service-by-service basis. We compete with these companies primarily on the scope and quality of our service offerings to university partners, and to a lesser extent, price.

Additional Resources:

• Company website
• Online road show
• ChinaEdu registers for IPO
• SmallCapInvestor.com: IPO Watch: ChinaEdu
• The Motely Fool.com: A Chinese IPO for Thinkers

Comments

[firboy4]

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