Visionary VEDU IPO: What You Need to Know

By Kirsteen Mackay

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Emerging growth company Visionary Education Technology Holdings Group plans to list on the NASDAQ Capital Market under the symbol VEDU, via IPO.

Visionary Education Technology Holdings Group intends to list upon the NASDAQ stock exchange under the symbol VEDU. The full details of the upcoming IPO are not yet available. So, we do not know how many shares the company will release or the assumed offering price per share.

Joseph Stone Capital is the lead, yet only underwriter and sole book-runner on the offering. There is not yet a set a date for the upcoming VEDU IPO.

As the company is small and registered as an ‘emerging growth company,’ it has elected to comply with reduced public company reporting requirements when filing its prospectus. This means it doesn’t have to disclose as much as a bigger company may opt to. VEDU also confirmed it might continue to report in such a reduced capacity in its future filings. The qualifier for this advantage is a company with less than $1.07bn in revenue during its last completed fiscal year.

What is Visionary Education Technology Holdings Group?

Visionary Education Technology Holdings Group is a small Canadian company providing education. It serves domestic and international students an array of educational content via online and in-person tutorials and events.

VEDU is a for-profit education provider selling schooling opportunities. Headquartered in the Toronto Metropolitan Area, VEDU expects to grow substantially over the next 20 years.

How does VEDU make money?

Visionary Education Technology makes money through its tuition fees, real estate rental revenue, construction revenue, and revenue from the sales of vacant lands.

Why is VEDU stock going public?

VEDU will go public in a bid to raise funds to further its expansion plans and growth initiatives.

When will Visionary Education Technology go public?

There is not yet an IPO date for VEDU stock, and it has to receive approval to be listed on the NASDAQ stock exchange before the offering date is confirmed.

What is VEDU’s Vision?

Visionary Education is building a fully integrated, multi-institutional provider of educational programs in Canada for local and international students. The education sector in Canada is steadily growing, but to achieve its vision, VEDU will have to overcome some challenges.

VEDU’s end goal is to provide private access to quality education that can be readily customized to meet evolving needs and markets. To meet this goal, VEDU intends to join forces with multiple educational institutions that share its objectives and will participate in its financial results.

As a first step in attaining this goal, VEDU has assembled a team of skilled and experienced educators to help with this initiative. The company aims to offer a full range of academic and vocational programs at every level—from secondary schools through master’s programs—in partnership with well-established public and private institutions. 

The high-caliber team heading up VEDU has an impressive financial and educational track record. Meanwhile, the company has acquired a range of private education providers and real estate facilities to push on with its educational offerings in recent years. 

The company plans to build out both real and virtual teaching facilities and labs. It is also developing an innovative education management platform based on artificial intelligence (AI) and Virtual Reality (VR).

VEDU Stock Financials

Revenues increased by $1.2m, or 60.1%, to approximately $3.2m for the six months ended September 30, 2021, from approximately $2m for the same period in 2020. The increase in revenue was mainly due to increased rent revenue, tuition revenue, and the revenue from the sales of vacant lands. It didn't make much from construction because the pandemic impeded that part of the business.

VEDU’s gross profit increased by $0.7m, or 60.6%, to $1.8m for the six months ended September 30, 2021.

For the full fiscal year 2021, revenues increased by $6.8m, or 728.3%, to approximately $7.7m from approximately $0.9m in fiscal 2020. The increase in revenue was due to the $6.6m from the sales of vacant lands in fiscal 2021.

The company has been increasing its revenue but to the detriment of its margins, operating profit, and cash flow. This will have to be improved upon if the company is to have a chance at long-term growth and success.

Visionary Education’s Corporate History

  • Visionary Education Technology Holdings Group Inc. was founded in 2013 by Ms. Fan Zhou, a vocational educator in Canada. 

  • Since 2015 the business has operated its international education program.

  • In subsequent years the company has made several company acquisitions and developed a real estate portfolio to expand its educational facilities. 

  • Visionary Education Technology has developed online teaching dossiers for more than 60 Ontario Secondary School Diploma (OSSD) courses comprising both core and elective courses.

  • VEDU also established collaboration with educational organizations like the Mississauga District School Board and Trent University.

Key People

Ms. Fan Zhou, Founder

Ms. Fan Zhou is the company founder and majority shareholder. She has provided financing through equity contributions, loans, and guarantees to permit VEDU to acquire land and improved commercial real estate in Ontario, which has either been sold to finance acquisitions or to house educational facilities. After closing the VEDU IPO, Ms. Zhou will continue to own a significant stake in Visionary Education Technology. 

Dr. Tom Traves, CM, Ph.D., Chairman of the Board

Dr. Tom Traves has spent much of his career in academic leadership positions at several universities. This time included nineteen years as President of two Canadian universities and service on the board of directors of many academic, government agencies, and national and international business corporations.

In a letter in the company prospectus, Chairman of the Board, Dr. Tom Traves, commented:

The senior team behind Visionary Education represent many years of experience in education in both the public and private sectors. When they invited me to join as Chair and to share their vision to build a fully integrated, multi-institutional provider of educational programs in Canada for local and international students, I quickly appreciated its potential.

In my opinion, Visionary Education provides academic quality, innovative leadership and a great opportunity to succeed financially by offering an exciting and innovative way forward in the realm of for-profit education. 

COVID-19 pandemic

Unfortunately, the COVID-19 pandemic caused Visionary Educations’ tuition fees and other revenue to plummet.

To survive while still creating opportunities to grow, the company streamlined and altered its vision. This included selling land while acquiring seven educational organizations and two institutional buildings.

Risks to investing in VEDU shares:

  • There are many risks to investing in this stock. Investing in the common shares of Visionary Education Technology Holdings is highly speculative and involves a significant degree of risk, as is the case with any emerging growth stock.

  • The sole underwriter, Joseph Stone Capital, is relatively inexperienced. A previous IPO led by the firm last year, E-Home Household Service Holdings Ltd (NASDAQ: EJH), has seen its share price plummet over 98% since its IPO in May 2021.

  • Furthermore, VEDU was brutally challenged by the COVID-19 pandemic, and current economic and geopolitical forces continue to pose a risk.

Growth Potential:

The company has shown revenue growth despite COVID-19 headwinds, but to continue this growth will require attracting students to enroll in its courses.

A significant portion of its revenues last year came from selling vacant land. This is not part of the core business vision.

Should you invest in Visionary Education Technology?

Canada’s education system has long-established a good reputation. Therefore, VEDU feels confident in its ability to attract students to its programs.

It seems the VEDU IPO will help the company raise funds to pay off debt, make additional acquisitions and continue with its development plan and growth initiatives.

Economic challenges pose a problem, as does the prospect of international education slowing.

Therefore, investing in VEDU securities involves a high degree of risk.

If you enjoyed reading this IPO overview, why not read our in-depth reports on ESG investing and Healthcare investing. Or check out our 12 investing themes for 2022.

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In this article:

Topics:
Educational Technology
Education Services
Online Education
IPO
Industries:
Consumer Discretionary
Information Technology

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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