The competition in the domestic adult guidance education service industry is becoming increasingly fierce, but in recent years, there is still an influx of many new enterprises. Now, there is another adult education counseling organization ready to go public in the United States.

Sichuan Curriculum Standard Technology Co., Ltd. (hereinafter referred to as "Curriculum Standard Technology") plans to list on NASDAQ under the symbol JDZG on May 15, with an expected offering price of 2.2 million shares at an issue price of between $4 and $5 per share.

Gronghui learned that Curriculum Standard Science and Technology was established in April 2020, with a registered capital of 2 million yuan. Li Yuan is the legal person of the company. The company is headquartered in Chengdu, Sichuan. It is a company that provides technical support and product services for adult education institutions.

In terms of ownership structure, before this offering, Li Yuan held 37 shares through JD LIYUAN LIMITED.Singaporeseagamessoccer.85%, with a total stake of 52.09%. As the founder of Curriculum Standard Technology, Li Yuan, 33, has more than 10 years of business management experience. Since the company was founded in April 2020, Li Yuan has been the CEO of the company, responsible for managing day-to-day operations and high-level strategy and business planning.

According to the prospectus, the fund-raising is mainly used to develop existing businesses, such as the expansion of sales and operations teams, diversification of service products and marketing activities, the acquisition of government-authorized vocational education and training institutions, and the addition of 8 to 10 examination centers. it is used to invest in technology research and development, aimed at developing and upgrading software, working capital and other regular corporate expenses.

The growth rate of revenue and net profit slows down, and cash flow fluctuates greatly.

Since the "double reduction" policy banned for-profit extracurricular tutoring in 2021, on the one hand, it has reduced the burden on Chinese children and parents; on the other hand, K12 private tutoring companies must become non-profit entities, and many institutions have become adult education institutions.

With the economic development and industrial upgrading, the demand for skilled talents has increased. In this context, more and more people receive adult education to improve their academic qualifications, which promotes the development of adult education industry. In recent years,SingaporeseagamessoccerThe market scale of China's adult education industry continues to expand, and the adult education support service industry is also developing rapidly.

In terms of sales revenue, the market size of China's adult education support service industry has increased from 147.8 billion yuan in 2017 to 271.2 billion yuan in 2022, with a compound annual growth rate of 12.9 percent. It is expected to grow to 425.3 billion yuan by 2027, with a compound annual growth rate of 9.4 percent from 2022 to 2027, which is lower than before.

With the development of the industry, the business of curriculum standard science and technology is also developing rapidly.

Curriculum standard technology provides all-round education support for adult education institutions, including software platforms and various solutions to adapt to industry changes. Its core service is "KB platform", which can simplify teaching management, improve efficiency and reduce mistakes. In addition, curriculum standard science and technology also provides auxiliary services for teaching and examination management from enrollment to graduation, covering school selection, training, tutoring and other links.

The company's customers are mainly concentrated in the national unified entrance examination for adult colleges and universities, the Open University of China and the self-study examination of higher education. As of 2023, Curriculum Standard Technology has cumulatively provided technical support services to more than 17 adult education institutions, providing support services to about 57000 students.

In terms of performance, according to the prospectus, the revenue of Curriculum Standard Technology in 2021, 2022 and 2023 was about 5.026 million yuan, 10.239 million yuan and 15.571 million yuan respectively, while the company's net profit in the same period was about 395000 yuan, 5.36 million yuan and 9.562 million yuan respectively.

In terms of growth, revenue in 2022 and 2023 grew by about 103 per cent and 52 per cent respectively, while net profit in 2022 and 2023 grew by 1257 per cent and 78.4 per cent respectively. Thus it can be seen that although the revenue and net profit of curriculum standard science and technology show an increasing trend, the growth rate slows down significantly.

In addition, the cash position of curriculum technology also shows great volatility. According to the prospectus, by the end of 2021, 2022 and 2023, the cash of curriculum standard science and technology was 6000 yuan, 2.604 million yuan and 7.082 million yuan respectively, and the net cash generated by business activities was about 1.199 million yuan, 495000 yuan and 10.377 million yuan respectively.

In its prospectus, the company said it had limited working capital and urgently needed a lot of additional financing, including bank loans and shareholder advances. However, there is no guarantee that the required financing can be obtained in a timely manner or on acceptable terms. If additional financing is not available, the company may need to significantly limit or terminate its main business, or may have to delay, scale back or cancel some of its planned business.

Rely more on a small number of big customers

At the same time, the curriculum standard science and technology still has the problem of relying on a small number of big customers and a single province.

According to the prospectus, the top three customers accounted for 59%, 19% and 11% of the company's total revenue in 2021, 50%, 19% and 8% of the company's total revenue in 2022, and 40%, 29% and 18% of the company's total revenue in 2023.

From this point of view, from 2021 to 2023, the top three customers accounted for more than 70% of the curriculum standard science and technology revenue, while the largest customers accounted for 59%, 50% and 40% of the revenue. If the cooperative relationship between the company and the major customers changes, it may affect the company's operating performance.

In addition, the curriculum standard technology is also more dependent on the Sichuan market. From 2021 to 2023, the proportion of revenue of curriculum standard science and technology from Sichuan Province increased year by year, reaching 80.2%, 91.7% and 100% respectively, of which Chengdu accounted for more than 70%.

As a populous province, Sichuan Province has a relatively low level of education, so there is a strong demand for adult education. However, although the annual compound growth rate of the adult education market in Sichuan Province reached 14.7% from 2017 to 2022, according to the forecast, the annual compound growth rate of the adult education market in Sichuan Province is expected to drop to 10% by 2027. It can be seen that the growth rate of the adult education market in the region is slowing down.

It is worth noting that according to the information disclosed in the prospectus, the market share of curriculum standard science and technology in the adult education supporting service market in Sichuan Province in 2022 is only 0.286%, which further indicates that its market position still needs to be improved.

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The Chinese adult education support service industry where Curriculum Standard Science and Technology is located is highly competitive, with many new companies, but not many leading companies, and the company is facing competitive pressure from existing competitors and potential companies to enter the market.

In addition, the prospectus also disclosed that the company may be punished for failing to pay adequate social insurance and housing provident fund for all employees as required by Chinese regulations. By 2023, the company estimates that the amount of unpaid social insurance premiums and housing provident funds is about 437000 yuan, and the amount of late fees and possible fines is between 354000 yuan and 958000 yuan.

The end.

China's adult education industry where Curriculum Standard Technology is located is expected to slow down in the future compared with the past. At the same time, with the increasingly fierce competition in the industry, Curriculum Standard Technology will face many challenges if it wants to stand out in the chaotic competitive landscape. At present, the business of Curriculum Standard Technology is mainly limited to Sichuan Province, and its market share in the province is relatively low. In addition, the growth rate of the company's net operating profit has slowed down and it relies more on a few large customers. How to solve these problems is a test for the company's management.