China's Largest Online Learning Company Should School U.S. Investors

I should learn Chinese. Not a week goes by that I don’t regret not being able to read Chinese (and by that I mean Mandarin Chinese — the country’s official dialect), if not speak the language.

It’s a symptom of our international economic age: At least a tenth of the information on companies, industries and investments that I’d like to access only appears in Chinese. That’s a lot of data I can’t find because of a lack of language.

But thankfully, China Distance Education Holdings Limited [CDEL] is here to help.

CDEL is the largest online educator in China. The company gives prep classes for standardized education tests (the Chinese equivalent to SAT prep courses) and industry exams (like the ones to become a healthcare worker, lawyer or civil servant), and it provides the same higher education services that you see advertised on daytime television (you know, the “Do you want to make more money?… ” ads). In fact, you can think of CDEL as an online ITT Tech and the University of Phoenix all rolled into one… and in Chinese. But that’s about to change.

CDEL (DL) just listed in the U.S. on Wednesday, and it’s beginning to look overseas for new customers. The company started offering online Chinese classes to English-language speakers. It’s a tiny program at this point, but it has the potential to grow.

The Chinese government recently informed foreign companies that upper-level management can’t get away with using translators to do business inside its borders anymore. Those who work there have to speak the language if they want to wheel and deal in the country. Managers must now pass a Mandarin-proficiency test, and many of them are scrambling to learn the language before they get kicked out of the country.

Add to that the fact that the U.S. is currently suffering from a shortage of Chinese-language teachers, and you get a whole bunch of people wanting to learn Chinese who don’t have the time to attend or sometimes even the access to classes in the subject.

If you’re adventurous and believe China will continue to grow in economic and political importance, like many parents seem to believe, an investment in DL may be a good idea. It’s already the largest online learning company in China, and it could build its customer base outside of China. But since the company just IPOd this week, I’d give it some time to shake out all of the bugs (and over-excited IPO junkies) before you put money into the stock.

Disclosure: None

Comments

[bsharvy:]

How do you know it's the biggest? EDU and CAST are also in this field, although it looks like they have slightly different niches. Good article on an interesting area.

2008 Aug 03 08:57 PM

[johnthebear:]

What a concept!

"The Chinese government recently informed foreign companies that upper-level management can’t get away with using translators to do business inside its borders anymore. Those who work there have to speak the language if they want to wheel and deal in the country."

Do you think that basic thought will ever sink into our pandering politicians?

How dumb we are in so many ways. So sad that we have ruined the best economic system in the world with stupid liberal politics.

2008 Aug 04 10:18 PM

[chinmaionline:]

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2008 Aug 04 11:32 PM

[chinmaionline:]

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2008 Aug 11 11:16 PM