JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Investment Advisors

RYB IPO Preview: An Early Childhood Educator Riding on China's Demand for Premium Education

RYB Education IPO Review - Ride the Education Momentum

Investment Advisors, JL Warren Capital

Junheng Li

Equity Bottom-Up

Perhaps the fundamental question for investors is whether it is possible (if at all) to run a for profit educational institute that is also publicly listed.  Note, education institutes are different from tutoring service providers such as TAL Education (NYSE TAL) and New Oriental (NYSE EDU).  Tutoring services aim to improve students’ improved test scores, so the quality and output of the product is measurable.  Conversely, educational institutes (including pre-K, K12, colleges and universities) are providers of “public goods” i.e. upstanding citizens to the society.  “Public goods” is rather intangible and thus difficult to measure in the short run.  Since the quality of service is unquantifiable, the management of a publically listed, for-profit educational institute may have the incentive to maximize profit at the expense of quality in convenient circumstances.    This is likely to be the root cause of all the now famous scandals involving RYB.

Perhaps the fundamental question for investors is whether it is possible (if at all) to run a for profit educational institute that is also publicly listed.  Note, education institutes are different from tutoring service providers such as TAL Education (NYSE TAL) and New Oriental (NYSE EDU).  Tutoring services aim to improve students’ improved test scores, so the quality and output of the product is measurable.  Conversely, educational institutes (including pre-K, K12, colleges and universities) are providers of “public goods” i.e. upstanding citizens to the society.  “Public goods” is rather intangible and thus difficult to measure in the short run.  Since the quality of service is unquantifiable, the management of a publically listed, for-profit educational institute may have the incentive to maximize profit at the expense of quality in convenient circumstances.    This is likely to be the root cause of all the now famous scandals involving RYB. 

China Maple Leaf Educational Systems (1317 HK)

RYB Education: A Flawed Business Model in Pre K Education

Ryb Education

RYB Education: A Flawed Business Model in Pre K Education