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GSX Techedu Sets IPO Target, Price Range Ahead of IPO

Belinda Zhou 2019-06-01 08:00 AM

GSX Techedu, scheduled for an initial public offering on June 6, raised its target to $227.7 million and announced a price range for its shares.

The Beijing-based provider of online live large-class education seeks to sell 19.8 million American depositary shares at between $9.50 and $11.50, offering 19.8 million ADSs. 

The five-year-old company has been fast-growing and reached profitability in 2018. For the year through December, it reported $2.9 million in income in contrast to net loss of $13 million in 2017. Revenue tripled year-over-year to $59.2 million last year. Gross billings for the full year reached $97.6 million, up 438 percent, according to the preliminary prospectus.

For the first quarter of 2019, GSX reported income of $5.1 million and revenue of $40.1 million, an increase of 474 percent from the same period a year ago.

Offering tutoring in K-12 courses, as well as foreign language, professional, and interest courses, the company had 767,000 student enrollments last year, a surge from 80,000 from 2017, according to today's filing with the U.S. Securities and Exchange Commission. In the first three months of this year, GSX said student enrollments tripled year-over-year to 211,000.

The chief executive officer of GSX, Xiangdong Chen, previously served as the executive president of China's leading education provider, New Oriental Education & Technology Group Inc. (NYSE: EDU).

Underwriting the IPO are Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays Capital Inc., and CLSA Ltd. If they exercise the over-allotment option in full, GSX will raise up to $262 million in its IPO.

The company has applied to become publicly traded under the symbol “GSX” on the New York Stock Exchange.