Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Equity Bottom-Up

China Distance Education Holdings Ltd (ADR) / Equity Bottom-Up

China Distance Education Holdings Ltd (ADR)

After relying mainly on forced consolidation for many years (with minimal worker redundancies), it appears state-owned enterprise (SOE) reform in China is finally turning towards more aggressive remedies in 2016. Authorities are bolstering the legal framework required to handle bankruptcies in a formal and relatively transparent manner; top officials have identified the sectors suffering the most from excess and / or outdated capacity; and bureaucrats have established detailed targets for capacity reductions and related job losses in those sectors. In addition, the central government has set timetables for achieving these targets, and, importantly, it has earmarked at least 100 bn RMB in funds (US$15 bn) to assist local governments in retraining and redeploying the millions of workers who will be displaced by SOE reforms. In this note we attempt to provide answers to the following questions:<ol><li>Is the apparent acceleration of SOE reforms and planned spending on job re-training and worker redeployment an attractive opportunity for private education providers in China?</li><li>If so, which companies are best positioned to take advantage of this trend?</li></ol>

After relying mainly on forced consolidation for many years (with minimal worker redundancies), it appears state-owned enterprise (SOE) reform in China is finally turning towards more aggressive remedies in 2016. Authorities are bolstering the legal framework required to handle bankruptcies in a formal and relatively transparent manner; top officials have identified the sectors suffering the most from excess and / or outdated capacity; and bureaucrats have established detailed targets for capacity reductions and related job losses in those sectors. In addition, the central government has set timetables for achieving these targets, and, importantly, it has earmarked at least 100 bn RMB in funds (US$15 bn) to assist local governments in retraining and redeploying the millions of workers who will be displaced by SOE reforms. In this note we attempt to provide answers to the following questions:Is the apparent acceleration of SOE reforms and planned spending on job re-training and worker redeployment an attractive opportunity for private education providers in China?If so, which companies are best positioned to take advantage of this trend?

Can Job Retraining Initiatives Linked to China's SOE Reform Boost Growth of Private Education Firms?

China

China Distance Education Holdings Ltd. offers a range of online and test preparation courses and other related services and products.  The Company's courses are designed to help professionals and participants obtain and maintain skills, licenses, certifications necessary to pursue careers in China in the areas of accounting, law, healthcare, construction engineering, IT, and others.

China Distance Education Holdings Ltd (ADR) (DL US)

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Can Job Retraining Initiatives Linked to China's SOE Reform Boost Growth of Private Education Firms?

After relying mainly on forced consolidation for many years (with minimal worker redundancies), it appears state-owned enterprise (SOE) reform in...

Daniel Hellberg