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Sunday, December 4, 2022

Canada-based Visionary Education Technology Debuts on Nasdaq with A $17 Million IPO

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With its low crime rates but high-quality education at an affordable cost, Canada is a natural destination for thousands of international students. Focusing on offering high-quality education resources to students around the globe, a Canada-based private education provider, Visionary Education Technology Holdings Group Inc., today made its debut on  Nasdaq under the ticker symbol “VEDU.”

The company issued 4,250,000 common shares at a public offering price of US$4.00 per common share, receiving aggregate gross proceeds of US$17 million from the offering. In addition, the company has granted the underwriters a 45-day option to purchase up to an additional 637,500 common shares at the public offering price, less underwriting discounts, and commissions.

Headquartered in Markham, Canada, Visionary Education Technology aims to provide access to secondary, college, undergraduate and graduate and vocational education to students in Canada through technological innovation so that more people can learn, grow and succeed to their full potential. As a fully integrated provider of educational programs and services in Canada, the company has been serving and will continue to serve both Canadian and international students.

The number of international students in Canadian colleges and universities has grown rapidly over the past decade. According to Statistics Canada, there were 142,170 international post-secondary student enrolments in fall 2010; there were 388,782 in fall 2019. Even though foreign student enrollment in Canada fell drastically over the past two years, the demand for international study has surged and still remains strong, fueled by the easing of pandemic travel restrictions and some new policies.

Last month, Canada just announced a new temporary policy that will give recent international graduates with expiring temporary status an opportunity to extend their stay in Canada, so they can continue to gain work experience and have a better chance at qualifying for permanent residency. “We believe that there is huge demand from international students to come to Canada,” said Dr. Thomas Traves, Chairman and Chief Executive Officer of Visionary Education Technology.

According to Visionary Education Technology’s SEC filing, revenue from rent increased by $0.9 million, or 330.4%, to $1.2 million for the six months ended September 30, 2021, from $0.3 million for the same period last year. The increase in revenue was mainly due to the additional rent revenue. Meanwhile,  Sales of vacant land generated revenue of approximately $1.7 million, 56.2 % of total revenue. “Our company initially commenced business with a strong real estate focus but made a strategic shift into private education recently,” said Thomas, “Our real estate properties will continue to generate rental income that can facilitate more educational initiatives and in some cases, we can use these properties to house our schools as our educational business expands.”

There are pros and cons when reviewing its different types of revenue. It enables the company to strengthen its revenue-generating ability by diversifying its business model and mitigating operating risks, but it might also make some investors stay away from the company because its Tuition revenue is still a relatively low proportion. However, Thomas clarified this by stating,  “Over time, the proportion of real estate income will shrink as our education grow rapidly.”

It is said that proceeds from the offering will be used for Public Private Partnership (“PPP”) projects, course development of Max the Mutt College of Animation, Art and Design (“MTM”) and program partnerships with other universities, vocational education, development of the global market and distribution channels, staff development and general corporate purposes, including working capital and operating expenses.

The IPO is a milestone for Visionary Education Technology, and is it a good investment for investors? As Benjamin Franklin said, “An investment in knowledge pays the best interest.” 

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