【英文】HSBC报告：中国私立学校专题报告（168页）

In the “Policy, policy, policy” section of our spotlight report, we discuss the negative share price  reaction of private early-education service provider RYB toward policy changes on kindergartens.  However, we note that favourable policy changes have also led to substantial and positive share  price reactions: on 24 January 2019, the State Council announced reforms to vocational education  by outlining certain goals and emphasising the role of private education in reforms; following that, the  share price of the three higher educational players (excluding Kepei which has just listed) rallied – led  by CEG and Hope Education, which have a greater participation in vocational schools.

We believe M&A is generally being seen by many investors as a positive event for the stocks of  school operators, as it helps to better use financial resources and achieve greater scale and  returns. Nevertheless, our analysis suggests that share price reactions can be very different in  reality, depending on the details. Two interesting cases stand out: On one hand, following Yuhua’s announcement to acquire Hunan International Economic  University on 28 December 2017, the share price rose 6% the following trading day (while the  Hang Seng Index was flat) and continued to move up in the following month. While positive  market sentiment could have played a role, we believe the market also took a positive view  about its expansion in the higher education area.

positive for school operators as they help to create additional returns by better using existing  financial resources or balance sheet strength. Nevertheless, share prices can move in different  directions in reality, depending on the details. We again illustrate this with two examples. On one hand, following Wisdom’s plan to establish a new, higher education school in Dongguan  on 15 July 2020, its share price fell 3% the following day (the Hang Seng Index was down 2%),  but quickly reversed afterwards; it was then further fuelled by the announcement of tuition fee  raises (see the later section for more discussions).