China Education:Access China Conference highlights

Education spending vs. market size - Education industry annual spending is c.

    USD 4.6trn (vs. market cap USD 0.1trn). The market size of China educationin 2017 is c. RMB 9trn. Breaking this down: Government fiscal spending (RMB4.23trn), Urban spending (RMB 2.25trn), Rural spending RMB 1.26trn and Fixedinvestment (RMB 0.78trn).

    K-12 market size - The K-12 tutoring market size is c. RMB800bn, while the top5 player accounts for a total of less than 5% market share (c. RMB30-40bn). K-12tutoring market in China remains highly fragmented with plenty of headroom forboth industry growth and market share consolidation. As for K-12 quality brandssuch as EDU/TAL, there will be a large opportunity for lower tier cities penetration.

    EDU vs. TAL - The expert believes TAL is more reliant on the teaching system andframework, while EDU is more reliant on its experienced teachers.

    Students number - The expert expect there will be c. 326 m students in China by2020. Breaking this down: there will be 40mn (12%) pre-school students, 212mn(65%) K-12 students and 74mn (23%) higher/vocational education students.

    AI technology - AI will become a powerful learning auxiliary for teachers/studentsand fundamentally shift the landscape of the education industry in China.

    Big data analysis - Through big data, teachers will be able to preciselyidentify why certain students struggle with certain subjects, and address themaccordingly - teachers almost become doctors-like in this sense. Data showthat students using this system have displayed significant improvement in theiracademic performances.