06-03-2019

The State Council previously issued the Implementation Plan of Reform on Vocational Education and the Modernization of China Education 2035, which showed the government’s positive attitude towards private vocational education. Investors’ concern on future expansion business model and profit distribution of higher education institutions are eased significantly. Moreover, according to the government work report delivered by the Chinese Premier, China targets to have an incremental recruitment of one million students for higher vocational schools. A vocational skills training initiative will be implemented with 100 billion yuan from the surplus in unemployment insurance funds allocated to provide training for the 15 million targeted attendees, helping jobseekers to upgrade skills or switch jobs or industries. Considering that the total student recruitment of higher vocational schools in 2018 was 3.69 million, an addition of one million students would be equivalent to a nearly 30% increase. Preferential tax and land policies are anticipated to be published which will provide catalyst for further sector rerating. As a result, medium/long term investment opportunities may arise for investors.

Reference:
Bloomberg, The State Council

General Disclosure and Disclaimer
Frontier Capital Management Limited (“FCM”) is a subsidiary of Frontier Financial Group (“the Group”). It is regulated and licensed by Hong Kong Securities and Futures Commission, also is an Exchange Participant of The Stock Exchange of Hong Kong Limited, and a Direct Clearing Participant of Hong Kong Securities Clearing Company Limited.
The information contained in this website is for informational purposes, and does not intend to recommend, invite, offer, or confirm of any terms. Based on the sources that are believed to be reliable, FCM attempts to provide accurate, complete, and up-to-date information and analysis. However, FCM cannot represent or guarantee its accuracy, completeness, or timeliness of such source and information. Before making any decision on your investment, you should weigh the provided information carefully and bear any responsibility and risk incurred. And you should seek for advice of a professional financial advisor.
The Group, its subsidiaries and connected persons may have held some of the equity securities mentioned in this article, but the Group and FCM will place your financial interests ahead of their own.