RYB Education Inc ADR equity, debt and subsidiaries

Accuracy score :
97%

Summary (from the latest 2017 annual and quarterly report)

  • Total equity: 110 million USD
  • Market Cap is 194.5 million  USD ( the last price of the stock is 6.67 USD)
  • RYB Education Inc is an early childhood education services provider in China. The company offers early childhood education solutions to children by providing kindergarten services and play-and-learn center services, as well as at-home education products and services
  • The company has 143 million USD in cash on the account (from the latest quarterly report)
  •  In 2018 long-term debt was zero, short – term debt was also zero (In 2017 total debt was zero)
  • Company's revenue increased in 2017 to 141 million USD from 109 million in 2016
  • Net income in 2017 was 7 million USD, Net income in 2016 was 7 million USD

 

Opinion about the company

Fundamentally it is a good company and in the future, we can expect its growth (Total debt is zero, a big amount of cash on the company's account, ROE is around 6 %).

 

RYB Education Inc is an early childhood education services provider in China. The company offers early childhood education solutions to children by providing kindergarten services and play-and-learn center services, as well as at-home education products and services. The kindergartens sponsored by the company offer high-quality preschool education to 2-6-year-old children and operates under the brand name of RYB. In addition, the company provide educational content and related products to franchisees as well as develops various educational products and services, such as teaching aids, educational toys and at-home education products and services. RYB markets and sells self-developed and third-party products and services through franchisees.

Substantially all of its assets and operations are located in China. Accordingly, its business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally. While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2012. RYB opened its first play-and-learn center in 1998 in Beijing. Later in July 2001, the company incorporated Beijing RYB Children Potential Education Entertainment Co., Ltd. to expand the operation of play-and-learn centers and kindergartens. In May 2006, the company changed the name of Beijing RYB Children Potential Education Entertainment Co., Ltd. to Beijing RYB Children Education Technology Development Co. In January 2007, the company incorporated Top Margin Limited, an exempted company under the laws of the Cayman Islands, as its offshore holding company to facilitate financing and offshore listing. Shortly following its incorporation, this company issued ordinary shares to the holding vehicles of the then shareholders of Beijing RYB, in proportion to these shareholders’ then respective equity interest percentages in Beijing RYB. Later in 2007, the company also established a wholly owned subsidiary, Beijing RYB Technology Development Co., Ltd. In June 2017, the company changed the corporate name of our company from Top Margin Limited to RYB Education, Inc. RYB Education, Inc. is a holding company.  RYB raised from its initial public offering approximately US$90.1 million in net proceeds after deducting underwriting commissions and the offering expenses payable by RYB.

 

As of December 31, 2017, RYB had 85 directly operated and 210 franchise kindergartens in operation in 30 provinces and municipalities in China. Total student enrollment and total teaching staff at its directly operated kindergartens was 21,684 and 2,925 as of December 31, 2017, respectively. The locations of RYB kindergartens are carefully planned based on a number of specific factors, including the estimated population of 2-6-year-old children and the number of competitors, as well as the spending power of families in the neighborhood. RYB follows the guidelines of local education authorities in determining the size of each class and adjust each kindergarten’s number of classes according to the demand in the relevant local market. RYB leased office space and facilities for our directly operated teaching facilities in China with an aggregate gross floor area of approximately 304,433 square meters. These leases have terms of one to 20 years. Most of its kindergartens are operated under the “RYB (   GRAPHIC   )” brand. All of them teach its core curricula, with some variations in feature course offerings tailored to local needs, and most of them also teach Scholastic Early-age English. The tuition fees of its kindergartens vary across our network, mostly in accordance with the spending power of local communities.

RYB expects to benefit from the positive effect of China’s new population policies. In recent years, China has started to relax its “One-child Policy.” Starting in 2015, each family is allowed to have two children. RYB expects this change in policy to significantly increase the 0-6 age population in the future. Revenue growth is primarily driven by the expansion of its network in terms of the number of its directly operated facilities, student enrollment at those facilities and the number of franchise facilities. RYB derives a large portion of its revenues from tuition fees, which are primarily driven by student enrollment at its directly operated kindergartens. With respect to its franchise kindergartens and play-and-learn centers, its revenues from initial franchise fees are mainly affected by the number of new franchisees, while revenues from recurring franchise fees are primarily driven by the total number of franchisees. As RYB network and student enrollment grow in size, the company is also generally able to sell more education-related products through its network. In addition, RYB believes that its large scale strengthens its brand, which in turn boosts further growth.

  • RYB has achieved significant growth in recent years. Its directly operated kindergartens increased from 62 and 77 as of December 31, 2015, 2016, respectively to 85 as of December 31, 2017
  • RYB had 13,753, 17,900 and 21,684 students enrolled at our directly operated kindergartens as of December 31, 2015, 2016, and 2017, respectively
  • The number of its franchise kindergartens increased from 111 and 162 as of December 31, 2015, 2016, respectively, to 210 as of December 31, 2017
  • The total number of its directly operated and franchise play-and-learn centers increased from 611 and 783 as of December 31, 2015, 2016, respectively, to 953 as of December 31, 2017. RYB expects the size of its network and its student enrollment to continue to grow
  • RYB net revenues increased by 29.8% from US$108.5 million in 2016 to US$140.8 million in 2017. This increase was primarily attributable to a US$22.5 million increase in tuition fees from its directly operated kindergartens and play-and-learn centers
  • Tuition fees from kindergartens and play-and-learn centers represent 72% of total revenues
  • Franchise fees represent 10% of total revenues
  • Sale of educational merchandise represents 12% of total revenues
  • Training and other services represent 6% of total revenues
  • RYB does not have any present plan to pay any cash dividends on its ordinary shares in the foreseeable future

 

RYB standalone subsidiaries and acquisitions :

  • The company has invested around 30 million USD in the last several years to buy property, plant and equipment to support its expansion of directly operated kindergartens
  • In 2019, RYB has entered into a definitive agreement to acquire approximately 70% of a leading Singapore-based private childhood education group for approximately 18 million USD in cash

 

Total =  48 million USD

 

On June 22, 2017, the company granted options to purchase a total of 2,059,005 ordinary shares to directors and employees at an exercise price of US$11.66 per share. The vesting and expiration terms of those options are:

  • 25% of the share options will be vested and exercisable on June 22, 2018 and will expire on June 21, 2027;
  • 75% of the share options will be vested quarterly in twelve quarters with equal quarterly installments after June 22, 2018, and will expire on June 21, 2027

The Reports that you may like

Stock Title % of value Value per share 2019-04-26
(zyne) Zyne Pinnacle of Financial Management -344.33 -3.0000 2019-04-20
(YELP) Yelp Inc Class A YELP Technical Analysis 493.88 8.0000 2019-04-02
(SCHL) Scholastic Corp SCHL equity, debt and subsidiaries 255.36 15.7700 2019-04-02
(RYB) RYB Education Inc ADR RYB Education Inc ADR equity, debt and subsidiaries 195.39 4.1200 2019-04-02
(YELP) Yelp Inc Class A Yelp Inc equity, debt and subsidiaries 493.88 8.0000 2019-04-02