HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<p>EdTech in Asia has been booming with increase in investor interests over the last two years. While China has seen a faster adoption and development in this space, other countries in Asia are also advancing very rapidly on the back of the pandemic-driven demand. Fueled further by significant investments, particularly from venture capital, the Asia (ex-China) EdTech market has been rapidly expanding. We think there are a lot of positive drivers, including demographic, socio-economic, political, cultural and governmental factors, behind the high growth rate of Asian EdTech and support its encouraging prospects. However, there are also many challenges need to be overcome by the EdTech enterprises so that they can thrive in the long-term.</p><p>Outside of China, there are already two unicorns in Asia and both are from India - <a href="https://www.smartkarma.com/entities/think-learn-pvt-ltd-byju-s" target="_blank" data-smartkarma-citation="entities:32203:1" rel="noopener">BYJU'S (1391510D IN)</a> and <a href="https://www.smartkarma.com/entities/sorting-hat-technologies-pvt-ltd" target="_blank" data-smartkarma-citation="entities:34354:1" rel="noopener">Unacademy (1434617D IN)</a> and there are some potential newcomers from Southeast Asia striving to make themselves into the list. We believe with further growth in EdTech adoption and the influx of EdTech investments in Asia, there are numerous opportunities for the sector to advance. Besides the two Indian names, we also look into interesting names including <a href="https://www.smartkarma.com/entities/zenius-education-pt" target="_blank" data-smartkarma-citation="entities:34355:1" rel="noopener">Zenius Education (1783734D IJ)</a>, <a href="https://www.smartkarma.com/entities/xseed-education-pte-ltd" target="_blank" data-smartkarma-citation="entities:34356:1" rel="noopener">XSEED Education (1256190D SP)</a>, <a href="https://www.smartkarma.com/entities/cialfo" target="_blank" data-smartkarma-citation="entities:34359:1" rel="noopener">Cialfo (1432512D SP)</a>, <a href="https://www.smartkarma.com/entities/topica-edtech-group" target="_blank" data-smartkarma-citation="entities:34357:1" rel="noopener">Topica Edtech Group (1679740D VN)</a> and <a href="https://www.smartkarma.com/entities/pt-ruang-raya-indonesia" target="_blank" data-smartkarma-citation="entities:34358:1" rel="noopener">Ruangguru (1522782D IJ)</a>. We think many of them are poised to become more meaningful players going forward, and serve as important role models for future development of EdTech in the region.</p><h2>What's Original?</h2><p>This Smartkarma Original addresses the latest developments of EdTech industry in Asia (ex-China) and will take experience from China as reference. In particular, its focus will be mostly on South and Southeast Asian countries. We highlight comprehensively the positive trends and driving factors behind the rapid growth of EdTech in Asia and discuss the key challenges. With EdTech development still in a comparatively early stage in the region, the company section of this Original focuses primarily on unlisted names. We look at their background, business model, management team, moats and challenges, financing arrangements and latest developments. We will finish up by looking at the emerging trends which will shape the industry in the medium-term. It is our intention that this Original will be an important reference Insight for the sector with unique coverage of key unlisted EdTech plays in Asia (ex-China).</p>

EdTech in Asia has been booming with increase in investor interests over the last two years. While China has seen a faster adoption and development in this space, other countries in Asia are also advancing very rapidly on the back of the pandemic-driven demand. Fueled further by significant investments, particularly from venture capital, the Asia (ex-China) EdTech market has been rapidly expanding. We think there are a lot of positive drivers, including demographic, socio-economic, political, cultural and governmental factors, behind the high growth rate of Asian EdTech and support its encouraging prospects. However, there are also many challenges need to be overcome by the EdTech enterprises so that they can thrive in the long-term.Outside of China, there are already two unicorns in Asia and both are from India - BYJU'S (1391510D IN) and Unacademy (1434617D IN) and there are some potential newcomers from Southeast Asia striving to make themselves into the list. We believe with further growth in EdTech adoption and the influx of EdTech investments in Asia, there are numerous opportunities for the sector to advance. Besides the two Indian names, we also look into interesting names including Zenius Education (1783734D IJ), XSEED Education (1256190D SP), Cialfo (1432512D SP), Topica Edtech Group (1679740D VN) and Ruangguru (1522782D IJ). We think many of them are poised to become more meaningful players going forward, and serve as important role models for future development of EdTech in the region.What's Original?This Smartkarma Original addresses the latest developments of EdTech industry in Asia (ex-China) and will take experience from China as reference. In particular, its focus will be mostly on South and Southeast Asian countries. We highlight comprehensively the positive trends and driving factors behind the rapid growth of EdTech in Asia and discuss the key challenges. With EdTech development still in a comparatively early stage in the region, the company section of this Original focuses primarily on unlisted names. We look at their background, business model, management team, moats and challenges, financing arrangements and latest developments. We will finish up by looking at the emerging trends which will shape the industry in the medium-term. It is our intention that this Original will be an important reference Insight for the sector with unique coverage of key unlisted EdTech plays in Asia (ex-China).

Asia (Ex-China) EdTech: A Deep-Dive into the Bonanza

Vietnam

Topica Edtech Group operates as an online education provider. The Company offers online degree programs, english speech tutoring courses, video learning content, and other education services. Topica Edtech Group serves customers worldwide.

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Asia (Ex-China) EdTech: A Deep-Dive into the Bonanza

The Asia (ex-China) EdTech industry is still in early stage of boom and there are positive factors driving its outlook. In this Original, we look...

Osbert Tang, CFA