Spring Education Group Inc.

Overview Key strengths Key risks Good revenue visibility due to steady re-enrollment rates. Revenue concentration in early childhood programs that are exposed to intense competition. Diversified portfolio of schools and participating markets. Financial sponsor ownership may cause sustained high leverage due to aggressive growth strategy. It reported strong revenue growth for the first three quarters of 2023, supported by higher capacity utilization that reached pre-pandemic levels, higher tuition rates, and growth in enrollments as students shift back to brick-and-mortar environments. We expect enrollments to increase mid- to high-single-digit percent in 2023 and 2024, and we believe capacity utilization will be about 65%-70% in 2023 and exceed 70% in 2024. Furthermore, we expect the company will increase tuition rates 4%- 7%

...We expect Spring Education Group Inc. will generate strong revenue and EBITDA, supported by high enrollments and tuition increase. It reported strong revenue growth for the first three quarters of 2023, supported by higher capacity utilization that reached pre-pandemic levels, higher tuition rates, and growth in enrollments as students shift back to brick-and-mortar environments. We expect enrollments to increase mid- to high-single-digit percent in 2023 and 2024, and we believe capacity utilization will be about 65%-70% in 2023 and exceed 70% in 2024. Furthermore, we expect the company will increase tuition rates 4%- 7% in 2023 to offset inflationary pressures....

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