Wah Fu Education Group Limited · NASDAQ:WAFU
Wah Fu Education — IPO Roadshow (September 2018)
34 slides from Wah Fu Education's IPO roadshow presentation, Sep 24, 2018
Slide 1: Wah Fu Education Group Limited Investor Presentation
Wah Fu Education Group Limited Investor Presentation September 2018
Slide 2: Free Writing Prospectus Statement
Free Writing Prospectus Statement This presentation incorporates information from a prospectus filed with the SEC for the offering, to which this communication relates and i ncludes statements that are, or may be deemed, "forward - looking statements . " In some cases these forward - looking stateme
Slide 3: Over 18 Years of Operating History
3 Over 18 Years of Operating History 18 Online Education Service of Self - Taught Education B2B2C Business * No. 1 Institutional B2B2C Clients (Universities, Colleges) 100+ Online B2B2C Courses We Currently Offer 700+ Courses to students per year on average In the past two years 350,000+ * Source: t
Slide 4: Table of Content
4 Table of content 1 2 3 4 5 6 IPO Summary Company Introduction Business Overview Industry Analysis Financial Highlights Investment Highlights
Slide 5: IPO Summary
IPO Summary Issuer Wah Fu Education Group Limited Security Ordinary shares Ticker NasdaqCM : WAFU Pre - IPO Shares Outstanding 3 , 200 , 000 Number of Shares Offered 1 , 000 , 000 (Min) ~ 2 , 000 , 000 (Max) Post - IPO Shares Outstanding 4 , 200 , 000 (Min) ~ 5 , 200 , 000 (Max) Offering Price per S
Slide 6: IPO Service Providers
IPO Service Providers Issuer Counsel Investor Relations Transfer Agent Underwriter Auditor Underwriter Counsel 6 PRC Counsel FA
Slide 7: Table of Content
7 Table of content 1 2 3 4 5 6 IPO Summary Company Introduction Business Overview Industry Analysis Financial Highlights Investment Highlights
Slide 8: Our Mission and Company Overview
Our mission Our mission is to improve education in China. Recognizing the unmet demand for higher education and the potential social and commercial value of private education, we started our business by providing education services focusing on long - distance learning. Our vision is to utilize our t
Slide 9: Corporate Structure (prior to Consummation of the IPO)
Corporate Structure (prior to Consummation of the IPO) 9 Yu Yang Yang Xinghui Yu Yang Yang Xinghui Yang Xinghui HFGFR INC.(RMI) River Business Limited (BVI) Silver Thousand International (BVI) Wah Fu Education Group Ltd (BVI) Wah Fu Education Holding Limited (HK) Shanghai Xin Fu Network Technology C
Slide 10: Company History
Company History 1999 2000 2012 2013 2015 Dec : • Began operation through Beijing Distance Learning • Formed Beijing Huaxia Dadi Distance Learning Services Co., Ltd. Sep : • Formed Beijing HuaXiaDaDi Digital Information Technology Co., Ltd. Jul : • Formed Wah Fu Education Group Limited (BVI) as an of
Slide 11: Management
Management 11 ▪ Chairman and Executive Director of the Company since Nov. 2016 ▪ Executive Director of Shanghai Xia Shu Network Technology Co., Ltd. since Apr. 2016 ▪ Executive Director of Beijing Distance Learning since Jul. 2015 ▪ Executive Director of Shanghai Xin Fu Network Technology Co., Ltd.
Slide 12: Independent Directors
Independent Directors Defang Li Independent Director • Professor of Beijing Normal University since 1986; Held various leadership positions at the university: including Dean of the Continuing Education Department, Dean of Higher Vocational Education and Deputy Dean of Network Education School • Depu
Slide 13: Table of Content
13 Table of content 1 2 3 4 5 6 IPO Summary Company Introduction Business Overview Industry Analysis Financial Highlights Investment Highlights
Slide 14: Online Education Service
Online Education Service Online Training Service (“B2C”) • Since 2000; • P rovide online training and examination preparation services directly to students for a fee ; • Provide on average approximately 350,000 courses to students per year in the past two years; • 9.3% of revenues in FY18 Online Edu
Slide 15: Self-Study Examination Platform
Self - Study Examination Platform • A c loud based education system for universities, government examination officials and students • C ustomized homepage systems for each university client • Students can login to the platform and engage in recorded or live courses • G rant s government examination
Slide 16: B2B2C Service Process
B2B2C Service Process 16 Expand the Market Confirm cooperations with colleges & sign agreement Technology Survey Platform Set - up Resource Management Data Management Training Instruction Conclusion Check client technology infrastructure & confirm plan Initialize institutional platform information C
Slide 17: B2C Service Process
B2C Service Process 17 Provide one - on - one degree solution plan Degree Planning Register and set up student profile Set up Profile Customize courses Program Planning Answer Questions online Q&A & Tutoring Study guide: interact with other students; exam reminder; live interaction examination guide
Slide 18: Technology Research & Development Services
Technology Research & Development Services Key clients Shanghai World Publishing Co. ▪ Develops and updates platforms for its Electric Backpack program State Intellectual Property Bureau Training Center ▪ Training course recording, editing and posting ▪ Platform maintenance and updating Since
Slide 19: Technology
Technology • Proprietary online education platforms designed and updated based on customers' needs • Additional features to facilitate intellectual studies • Mature technologies • Customized platform • Cost saving • Reduce development period • Quickly respond to market demands Development Strategy •
Slide 20: Table of Content
20 Table of content 1 2 3 4 5 6 IPO Summary Company Introduction Business Overview Industry Analysis Financial Highlights Investment Highlights
Slide 21: Industry Overview: Key Industry Drivers
Industry Overview 21 Continuing Growth Momentum of Chinese Economy Increasing Broadband and Internet Penetration Increasing Awareness of the Importance of Education Need to Differentiate Oneself from Peers through Education Key Industry Drivers
Slide 22: Sector Trends
Sector Trends 22 10.51 12.6 14.97 18.38 23.4 7.85 9.91 13.68 15.24 17.8 52.5 130.5 272.7 393.9 543.3 815 0 100 200 300 400 500 600 700 800 900 0 5 10 15 20 25 2012 2013 2014 2015 2016 2017E Market Size Online Self-taught Higher Education (RMB Billion) Online continuing higher education (RMB Billion)
Slide 23: Major Competitors
Major Competitors 23 B2B2C service B2C service Manufacture T echnology service B2B2C service B2C service T echnology service
Slide 24: Table of Content
24 Table of content 1 2 3 4 5 6 IPO Summary Company Introduction Business Overview Industry Analysis Financial Highlights Investment Highlights
Slide 25: Peer Valuation
Peer Valuation 25 Price Mkt Cap EV BVPS P/B Company Name Ticker 9/18/18 ($M) 9/18/18 (MRQ) TTM FY18E FY19E TTM FY18E FY19E TTM FY18E FY19E TTM FY18E FY19E (MRQ) Wah Fu Education Group Limited (Max) WAFU $5.00 $21 $14 $2.89 $0.36 $0.36 NA 14.0x 14.0x NA $6 $6 NA 2.3x 2.3x NA 1.7x Wah Fu Education Gro
Slide 26: Financial Highlights
Financial Highlights 26 $6.0 Million ▪ Revenue increased by 15% YoY to $6.0 million in FY18 ▪ Gross margin increased by 5% to 63% in FY18 compared to FY17 FY18 Revenue $0.36 FY18 EPS EPS Revenue and Gross Margin $thousand Note: FY ends March 31 $0.36 FY16 FY17 FY18 US Dollars $7,043 $5,173 $5,968 64
Slide 27: Income Statement (FY ends 3/31)
Income Statement (FY ends 3/31) Income Statement (US$ thousands, except per share data) FY16 FY17 FY18 Revenue 7,043 5,173 5,968 Cost of revenue 2,551 2,151 2,229 Gross profit 4,492 3,021 3,738 Selling expenses 844 702 1,085 General and administrative expenses 1,025 1,660 1,581 Total operating expen
Slide 28: Balance Sheet
Balance Sheet Balance Sheet (US$ thousands) 3/31 2016 3/31 2017 3/31 2018 Cash 5,172 5,601 4,723 Accounts receivable, net 1,056 664 2,038 Inventories 8 9 8 Other receivables, net 24 77 31 Loan to third parties 16 232 1,072 Other current assets 67 28 337 Total current assets 6,342 6,611 8,209 Propert
Slide 29: Statement of Cash Flows
Statement of Cash Flows Statement of Cash Flows (US$ thousands) FY16 FY17 FY18 Net income 2,231 617 1,203 Depreciation 126 119 122 Loss from disposal of equipment - 5 1 Provision of doubtful accounts 20 27 143 Loss from investment in unconsolidated entities 66 36 (56) Interest income from loan to th
Slide 30: Table of Content
30 Table of content 1 2 3 4 5 6 IPO Summary Company Introduction Business Overview Industry Analysis Financial Highlights Investment Thesis
Slide 31: Competitive Strength
Competitive Strength 5 4 1 3 2 • L aunched our adult continuing education platform in late 2016 • 20 schools have service agreements with us • More than 60 schools are testing our services Promising Online Adult Education Services • D edicated considerable resources to our technology and product dev
Slide 32: Growth Strategy
Growth Strategy Plan to expand our client base for our B2B2C service, in response to the increased demand from over 3,000 universities in China Continue to improve the breadth and quality of online courses Intend to provide offline training and testing services to supplement the online services prov
Slide 33: Investment Highlights
4 Highly fragmented, quickly evolving and intensely competitive market calls for consolidation in the long run 5 Opportunity to become a consolidator with higher market share given strong brand name and the halo effect following Nasdaq IPO 33 Investment Highlights 1 Leading online education service
Slide 34: Thank You
Thank You Contact: Ashely Ai (86)135 8179 5971 ashely.ai@horwathcapital.com.cn Yintai Center, Bldg C, Room 2201 2 Jianguomenwai Avenue Beijing, China
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